I. Introduction
“Taxes are what we pay for a civilised society. I like to pay taxes. With them I buy civilisation”, Justice Holmes mentioned these words in the context of examining the issue of Taxation. By paying taxes honestly, we fulfil our duty to the society and country we live in. At the same time, maximisation of profit by the lawful means is the objective of all persons. Income Taxes are theprimary source of revenue for any Government and it helps the Government to provides better infrastructure, to improve the standard of living and provides security to its citizens.
According to Alex Cobham and Petr Jansky (Cobham, 2018) every year around US $ 500billion of tax is lost due to tax avoidance by big business houses across the world. As per the said report, these large business houses have practice tax avoidance at large scale.
The government of India has always corrected the legal loopholes in the laws by of periodical amendments to the tax law. As always seen that Government in this regard is always behind as the corporate manipulate tax laws by finding loopholes in laws. These corporations are able to structure complex and elaborate tax avoidance plans and hence causing tax loss to Government.