An assessment order makes a large addition you believe is wrong. Walk through the remedies and how you would choose between them.

What the interviewer wants to hear

• Reviews the order and computes the demand
• Considers rectification for mistakes apparent from the record
• First appeal before the Commissioner (Appeals) within the time limit
• Further appeal to the ITAT, then High Court on substantial questions of law
• Stay of demand and alternative routes such as settlement or dispute resolution schemes

Model answer

I first study the order: the reasons for the addition, the evidence relied on, any procedural lapses like denial of a hearing, and the demand including interest. If the error is a simple mistake apparent from the record, such as a wrong calculation or missed TDS credit, a rectification application may fix it quickly. For disputed additions, the first appeal lies before the Commissioner of Income Tax (Appeals), filed within the time limit with grounds of appeal and supporting documents. At the same time, I would seek a stay of demand, which often requires paying a portion of the disputed demand. If the CIT(A) rules against us, the next level is the Income Tax Appellate Tribunal, the final fact-finding authority, and after that the High Court and Supreme Court on substantial questions of law. I would weigh the amount, strength of facts and precedent, cost and time, and consider any dispute resolution or settlement schemes that are available.

More hard Tax Consultant questions

• An Indian company has significant transactions with its UAE parent. How would you approach transfer pricing compliance and documentation?
• A client receives a GST show cause notice proposing a large demand for wrongly claimed input tax credit. How do you handle it?
• An Indian entrepreneur wants to set up a company in Dubai to serve global clients while still managing the business from India. What tax issues would you raise?
• A client proposes routing Indian investments through a holding company in another country mainly to reduce capital gains tax. How do you advise?
• A client plans to acquire a mid-sized Indian company. How would you carry out tax due diligence?
• How does the global minimum tax (Pillar Two) affect multinational groups with entities in the UAE?
• A long-standing client asks you to show some personal expenses as business expenses and to leave out cash receipts. How do you respond?
• An Indian company sends an employee to work at its Dubai affiliate for two years. What tax issues do you review for the employee and the companies?
• A client wants to sell one division of its Indian company as a going concern. What tax considerations would you raise?