The revenue department has launched investigations under the Anti-tax avoidance law, General Anti-avoidance Rule GAAR, into companies and entities that may have used methods to avoid paying taxes. A Hyderabad-based company, Ekge Retail has received a notice in which the department applied Section 96 1 d of the Income-tax Act, which deals with impermissible agreements undertaken to avoid taxation. The company has now approached the High Court for the state of Telangana at Hyderabad challenging the applicability of the section for some transactions undertaken in 2018 and 2019 under the section 96-1 d of the Income-tax Act. The notice was issued to the company in February 2022. GAAR was first introduced in 2012, but it was considered controversial and there was a demand that the government put in proper checks and balances. The process in which GAAR notices can be issued has been specified by the government. Before issuing a notice, a tax officer must escalate the matter to a tax commissioner. If the commissioner is convinced, it will be sent to a panel that will have to give its approval before any action is taken. The investigations came months after the government set up a panel to look at these cases in January this year. The subsection on one hand questions the manner of entering a transaction by the taxpayer, while the circular issued by CBDT in 2017 clarifies that GAAR will not interfere with the right of the taxpayer per se on the manner of implementing a transaction, said Rahul Garg, managing partner of tax and regulatory consultants Asire Consulting. The government could come up with detailed guidelines to avoid litigation because of the reach of GAAR, not just cross-border transactions but any domestic arrangement as well. The GAAR framework was put in place for a while, presumably due to the Pandemic, and the fresh investigations mean that several M&As or corporate transactions could now be questioned if they are designed as part of tax planning. Tax experts note that GAAR has existed in its current form in the regulations since 2017 -- 18 but its effective implementation started this year only after the constitution of the panel. The objective of the panel is to make sure that it is treated fairly and not subject to officers' level of officers to pick up cases, according to experts. If the tax department thinks that some transactions or structures in or outside India were set up or done to avoid paying income tax, GAAR would go into effect. GAAR could be attracted if a company set up an office in another country or undertake a merger or acquisition merely as part of tax planning.