India has a multi
layered dispute resolution mechanism. Over
the years, tax appeals pending for disposal are ever
increasing. This in turn results in a delay of justice and
resolution of the tax matters, increased cost of litigation,
blocking tax revenues for the government and refunds for
taxpayers. The government aims to uplift India’s ranking on
Ease of Doing Business and various measures are taken on
this front in the past few years. However, more steps need to
be taken to reduce and manage the tax litigation as it directly
impacts the environment of doing business in India.

The India tax dispute resolution mechanism surrounds the
Commissioner of Income tax (Appeals) [CIT(A)]/Dispute
Resolution Panel ( DRP ), Income Tax Appellate Tribunal
ITAT ), High Court (HC), and Supreme Court (SC). At each of
these levels there are many cases that are piled up for
adjudication. There are no time limits prescribed for the
disposal of tax matters due to which disposal happens at its
own pace, which takes on an average 10 to 12 years,
especially when the matter is pending before the HC or SC .

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