There is no denying that as tax professionals in India, majority of our lives revolve around tax litigation. The moment a notice is received from the tax department, more often than not when we are already choked with other work, the team goes into a tizzy. The feeling only gets compounded, if the notice is that of an old case. Actually, the apprehensions are not so much about the legal issues surrounding the case, but rather availability of all information, documents, and history concerning the same. In addition, the increased reporting to internal and external stakeholders around tax litigation consumes significant amount of time. Any multi-entity group, with operations in several states, can have several thousand open tax cases.
The genesis of the Litigation Management Tool can be traced to several such developments. As tax professionals, one would rather focus on the legal aspects and value addition, as compared to management of the paraphernalia surrounding tax litigation.
Litigation Management Tool (LMT) is a digital application developed by EY that can manage almost all data points in relation to tax litigation, which includes the chronological history of a case, related orders, notices, submissions, other documentation, status of demand, stay, refund status, and power of attorney of consultants. LMT can also allow users to store and retrieve tax returns filed, with details relevant for assessments etc.
Additionally, it can cull out some useful reports such as issue-wise, year-wise list of litigation, risk categorization report, demand refund status. The list of functionalities of LMT is rather long. The application can be used to service clients by EY teams or the clients can independently install the application at their workplace.
Life post LMT
Imagine life post LMT — to begin with LMT has a calendar dashboard, which maps all hearings, due dates (i.e., for appeal filing, demand payment, stay expiry, refund follow-up and whatever one wants to put a date to). Not stopping at that, e-mail reminders are periodically sent to ensure that the users’ schedule can be well planned.
However, just in case an unexpected notice, such as for a hearing of an appeal is received, one just has to punch in the name of the entity and the financial year to which the notice relates in the LMT.I In seconds the entire case history detailing — when the return was filed, what transpired during assessment proceedings, what submissions were made, what was the demand raised, rectifications filed, re-assessments proceedings undertaken if any, is available. Details are available not only for that particular case, but also for any previous cases where a similar issue was litigated.
In no time, all the required information can be accessed — as compared to earlier when it would have taken days to retrieve files, painfully pull out the history and details of the case, compile all the documentation (with added apprehensions that the details may not be 100% comprehensive).
Additionally, stakeholders, including auditors, can view and download status of all cases of the company, i.e., reports for demands outstanding, the risk categorization analysis of the case, refunds outstanding, issues under litigation — ready reports with no efforts at all. On the other hand in the current scenario, finance/tax professionals spend days in preparing details for financial reporting.
It is extremely user friendly, where just in a few clicks, the relevant development and documents of a tax case is updated. It also allows users to store all data around attorneys/consultants hired for each matter, and amounts paid to them. One can also get analytical reports such as win-loss ratio, new proceedings initiated, proceedings closed, demand confirmed, refunds received and more. This is a big step toward building a better working world of managing tax litigation.
It’s time to go digital!