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August 12, 2021

CA Association writes to FM problems faced on New Income Tax Portal

by CA Shivam Jaiswal in Income Tax

CA Association writes to FM problems faced on New Income Tax Portal

Problems being faced by the taxpayers on the new portal “E-filing 2.0”

Bombay Chartered Accountants’ Society

Date: 11.08.21

To,

Smt. Nirmala Sitharaman

Hon’ble Union Minister for Finance and Corporate Affairs Government of India

New Delhi.

Respected Madam,

Subject: Problems being faced by the taxpayers on the new portal “E-filing 2.0”

The Bombay Chartered Accountants’ Society (in short ‘BCAS’) is a voluntary organisation established on 6th July 1949, BCAS has presently more than 9,000 members from all over the country. It is a principle-centered and learning-oriented organisation promoting quality service and excellence in the profession of Chartered Accountancy. The organization works for the welfare of the Chartered Accountants and represents before various regulatory authorities to resolve the problems/ hardships faced by Chartered accountants and business communities. Our members act as a bridge between the Tax Departments and also the Taxpayers.

We would like to convey our gratitude and congratulate you and your ministry for taking up the pro-active, ambitious and forward looking step of development and launching of new Income tax e-filing portal with the objective of realising many functional improvements, and addition of new features in to the new e-filing portal which inter-alia includes faster processing of refunds to taxpayers, free ITR preparation software, call centre services, single dashboard interface and to bring in many more better and improved functionalities. We wholeheartedly support the various initiatives taken by the government in trying to establish a robust mechanism to ease the compliances of taxpayers.

The new e-filing portal was expected to replace the existing e-filing portal, it was viewed to create a strong technology backbone by enabling host of new functionalities to the taxpayers including enhancement of look, feel and usage experience. The new portal was mainly presented with a moto of Reset Realign and Restart!

Given such heightened expectations, we regret to say that after the expiry of more than two months, the portal is still not functioning and is suffering from several serious problems causing great and unavoidable hardships to the taxpayers and their representatives.

Despite the sincere, honest and best efforts of the team working behind in the development of this new portal, it was disheartening to realise that this new portal is almost non- functional from the day of its launch on 7th June 2021 and has witnessed many defects which have prevented the taxpayers and other stakeholders from performing their legal compliances. The most fundamental and basic defect observed by many users which ideally should have been tested before he launch that the new portal did not even allow the users to login and enter inside their accounts on the portal.

We at BCAS have worked closely with multiple stakeholders to understand the issues at hand with respect to e-filing portal 2.0.

We have summarized those issues in the ensuing sections.

I.  Issues

1. Issues relating to Login

  • Login into the portal is herculean task with the site running slow at most of the times. If such situation persists, it will be a difficult task to file returns / other forms when all the forms are made available and last date approaches. We request that the said matter be looked at on an urgent basis.
  • To register any taxpayer on the e-filing portal, it is required to e-verify the taxpayer using an OTP which is sent on taxpayer’s mobile number and email id. In case, if the registration of a Non-Resident (NR) is to be carried out, the OTP for the mobile number is not received on overseas numbers, this becomes a major issue when a NR is in a possession of overseas number only.
  • In case the taxpayer manages to log in after the above-mentioned issues (Resident & NR) data is not available in almost all/ many places to download the past information as it appears as though the migration has not happened completely.
  • Newly incorporated companies/ firms are not able register themselves.
  • While logging in through TAN, name of taxpayer is not visible.
  • Accounts on e-filing portal are locked after in the second attempt itself. (Screenshot below)

2. Issues relating to E-filing

  • The new portal states that ITR post to AY 2013-14 can be downloaded, however, the same are not available on the view ‘filed returns’ tab.
  • Details pertaining to AYs prior to AY 2013-14 are not available and therefore it is difficult to ascertain the reasons for the outstanding demands related to those years. The taxpayers do not normally keep records of ITR details related to such past years as they were readily available in the legacy portal. As corollary, the Form 26AS could be generated from Traces portal even for AYs prior to 2013-14.

Additional Schedules are being added even though they are not relevant to the tax- payer, these schedules are also seemingly mandatory and cannot be deleted / removed. A taxpayer will have to mandatorily mention zeros in those schedules for the validation to be successful. An example of the ITR-2 has been provided below:

  • New portal does not have any pre-filled data such as Salary figures, other sources figures, which was said to be one of the key reasons why the revamp is being done. Also, only partial data from Form 26AS is being populated.

(For ex. TDS on salary is auto captured in the ITR but salary income is not auto captured.)

  • When a HUF is trying to file its ITR on the new portal and it is been verified by the Karta of HUF, the new portal is displaying an error saying “Return is being filed by the representative assessee but the PAN quoted in representative assessee’s field is not the same as the PAN who is trying to upload the return. Karta signing on behalf of HUF is not representative assessee filing the return as per section 160 of the Act.
  • A separate tab / drop down for exemptions under Section 10 is not appearing / not auto populated in cases of certain incomes from other sources. For example: In case of clubbing on income of a minor child, the exemption u/s 10(32) is not getting populated automatically / there is no specific tab appearing to enter the exemption as well.
  • Though facility for furnishing ITR -1, 2 and 4 has been provided but these cannot be uploaded properly. The portal is showing error in respect of bank accounts – “Enter Bank Name” error being the most common one. This error is thrown up even after the Bank has been validated, and the Bank Name tab is not an editable field.
  • In ITR 4 Form, many tabs are not accessible in the offline utility and hence, taxpayers are unable to file the returns.
  • On submitting the ITR, e-verification is a mandatory process, for this process OTP is not received on time and in case the OTP is, if at all received, it isn’t being accepted. At times, the system is not taking us any further after clicking on e-verify button, and the absence of a loader does not help the taxpayer in figuring out whether the request is placed or not.
  • JSON utility if it is saved from the ITR which has errors thrown up at the time of validation (For ex: Bank pre-validation wasn’t done at that point in time), will show error while uploading at a later point in a time, when for instance the validation is complete.
  • Returns that were already processed u/s 143(1) in March 2021 are still showing as under process in the new portal. Intimations u/s 143(1) which are issued after processing of returns for FY 2019-20 (AY 2020-21) contain multiple mistakes apparent from record.

(For ex. Returns which are filed claiming refunds are showing processed with huge demands payable. This also results into trouble with provisions of section 281, whereby if an assessee wants to sell a property is forced to apply for clearance u/s 281 owing to an erroneous demand in the portal.)

  • Further, the option for filing rectification u/s 154 is also not available on the new portal and it is a serious worry because time limit to file the rectification u/s 154 will become barred by limitation of time.
  • While filing the ITR (under ‘Personal Information’), even after saving address, jurisdiction details of the non-resident, the same error is thrown up at the time of validation.

Date of filing the return is not coming appropriately, there is an issue in format of the date (i.e ddmmyyyy). Return was filed on 03-August-2021(03-08-2021) but date of filing the return on new portal is coming as 08-March-2021 (08-03-2021(i.e before the FY) and hence, taxpayers are not able to e-verify those returns.

  • While taxpayers are trying to file responses against notices issued u/s 148, a common error thrown up is ‘something went wrong’.
  • In cases where reassessment proceedings u/s 148 have been initiated for the second time, the portal is not allowing the taxpayer to upload the ITR in response to notice u/s 148 with an error stating ‘Response submitted against notice u/s 148 with acknowledgement number …’ which refers to earlier reassessment proceedings (completed in 2019).
  • If companies opt for New Tax Regime u/s 115BAA, MAT provisions u/s 115JB should not be applicable to such companies. However, the new portal is computing MAT irrespective of companies exercising the option u/s 115BAA.

3. Issues relating to Services

After generating instant E-PAN, the same could not be downloaded from the new portal.

The validity status of PAN is not available on the portal.

  • Taxpayers are not able to download Intimations u/s 143(1) from the income tax portal for any year.
  • Closure orders of Assessment Proceedings (appearing under Services – e-proceedings) cannot be downloaded due to system issues.

4. Issues relating to Pending actions

  • The basic details like DIN, PAN, address of the taxpayer is not auto populated when the taxpayers are trying to pay off the outstanding demand through the portal directly.
  • Notices are issued and DIN is also generated but taxpayers are not able to download them as data is not available on the portal, same is the case with closure orders as well which are been issued by the tax department on account of completion of various proceedings but the same are not available on portal to download for taxpayers.
  • There are certain actions which are shown as pending on dashboard, but when taxpayers are trying to complete those pending action data is not available to indicate the pending actions.
  • The functionality to carry out trust registration (new or renewal) is now available on the portal, however, Form 10A is not functioning appropriately.

(For Ex.While filing Form 10A, the portal is not allowing the trust to fill in income details of last 3 years. Separate sections of Form 10A cannot be filled in simultaneously and it is forcing the user to complete a particular section and only then move to the others. In such a case, the option to save each section becomes useless.)

  • If 15CA/CB form is filed, either the acknowledgement/ the filed forms or sometimes both are not appearing on the portal
    • In Form 15CA/CB, tax and net amount that is to be remitted in foreign currency comes with Rupee symbol prefix and commas in amounts come at hundreds, and not thousands.
    • The new process of Form 15CA/CB is very clumsy; it requires CA and taxpayer to log in parallelly. There is no provision to preview the form before submission. No provision exists to withdraw forms also if some errors are detected.
    • Form 15CA is when client has to finally sign after the issue of Form 15CB by CA. There isa tab which gives the option to modify if required, but it is a non- functioning tab.
    • Preview of Form 15CA not available when assigned to CA by the taxpayer while accepting assign CA request. Hence, rejection of form by the CA due to errors is not possible on the new portal before accepting the Form 15CA. However, once the Form is accepted, it cannot be withdrawn if errors are noticed and here it goes on loops. On the same note, taxpayer should also get the option to preview the form, the view form option for taxpayers is not working.
    • Form 15CA/CB in preview mode and the final form available on the portal after submitting the same are identical, Final form does not have digital signature of the signatory. However, Banks needs a signed copy to process the foreign remittance and therefore, they insist to provide signed hard copies in absence of digital signature.
    • There is no provision to mention UDIN while uploading Form 15CB.
  • The trail of replies given by the taxpayers in response to, departmental notices, issued earlier are not available on the new portal. Taxpayers do not keep a complete track of submissions made and assessment orders issued by the tax authorities as it was easily available on the legacy portal and therefore, it should be made available on the new portal as well.
  • The new Portal is not allowing appeals u/s 246A to be filed before the Commissioner of Income Tax with DIN.
  • Already filed appeals which have been partly heard, written submissions of the same are not reflecting on the Portal. Further in some old cases, remand reports are pending and the same are not being reflecting at the Portal.

5. Issues relating to Grievances

  • Grievances raised on the new portal are automatically being deleted without getting addressed.
  • Existing grievances that were registered on the legacy portal under e-nivaran along with trail of interactions are not appearing in the new portal.

6. Other Issues

  • There is no tab for the VsV scheme for providing comprehensive information and no update of the pending actions tab. Form- 3, 4 and Form 5 under ‘Vivad se Vishwas Scheme’ are not visible on the portal. As the deadline (31 August 2021) for making payments under VsV is fast approaching the same should be investigated on priority basis.
  • Portal is running very slow and erratically. Some information which is visible in one login but disappears on subsequent login.
  • Old filed forms, audit reports, etc. are not available for download and if downloaded then it is a blank document.
  • E-verification of earlier filed ITRs is not happening.
  • Challan numbers are not auto populated while responding to outstanding demands. Also, in the legacy portal, when the payment was being made directly, the taxpayer details and DIN used to pre-populate, which is not happening in the new portal.

The total amount payable on account of interest u/s 220(2) incurred on outstanding demand is appearing incorrectly in the new portal.

  • BSR code that starts with first character as “0” is not recognized and hence error of invalid input is encountered.
  • IN numbers of company directors are not being auto populated in the new portal.
  • The website does not have a loader when it is trying to fetch data from the server and its taking time. This creates a problem as the taxpayer is not able to understand whether the request is placed or not. It also results into user clicking multiple times and the page becoming unresponsive.
  • Error number ITD-EXEC2002 appears frequently when you use any feature of the website.
  • The bank accounts were pre-validated in the legacy portal, however in the new portal the same bank accounts are wrongly displayed as not pre-validated / validation in progress.
  • Taxpayers are unable to register their TAN on the new portal which is required for filing the TDS return.
  • The DSC to be registered on the personal e-filing account of the authorized signatory, example CA’s personal login before he / she approves / provides certificate from the ARCA login.
  • We are not able to register the DSC on the new portal as the specific certificate does not appear in the drop down.
  • Sometimes if we manage to register the DSC of key person in their ID using Internet explorer, in company login, against their name DSC registered comes as NO.
  • Moving between tabs is not seamless and requires clicking many times and with the loader missing, it becomes impossible to know if the portal is working or not.
  • Taxpayers are not able to seek Adjournments in hearings as the due date is not updated in the new portal and as seeking adjournment is a time barring activity, adjournments could not be filed by such taxpayers.
  • Where an appeal is pending before CIT(A) or Income Tax Appellate Tribunal, there is an automatic stay granted after 20% of the demand is paid. However, the portal automatically adjusts the entire demand against refunds of other years, without any intimation. This results into a situation of no recourse to the tax payer. Grievances raised on this matter are being closed or deleted without resolution.
  • There is no option to file response to the defective notice issued u/s 139(9) in the new portal. The taxpayers are unable to file responses to the defective notices u/s 139(9) which were issued under the old portal. Since replying to notice u/s 139(9) is a time baring activity, request for a quick resolution is prayed.
  • Sometimes if we manage to register the DSC of key person in their ID using Internet explorer, in company login, against their name DSC registered comes as NO.
    • Moving between tabs is not seamless and requires clicking many times and with the loader missing, it becomes impossible to know if the portal is working or not.
    • Taxpayers are not able to seek Adjournments in hearings as the due date is not updated in the new portal and as seeking adjournment is a time barring activity, adjournments could not be filed by such taxpayers.
    • Where an appeal is pending before CIT(A) or Income Tax Appellate Tribunal, there is an automatic stay granted after 20% of the demand is paid. However, the portal automatically adjusts the entire demand against refunds of other years, without any intimation. This results into a situation of no recourse to the tax payer. Grievances raised on this matter are being closed or deleted without resolution.
    • There is no option to file response to the defective notice issued u/s 139(9) in the new portal. The taxpayers are unable to file responses to the defective notices u/s 139(9) which were issued under the old portal. Since replying to notice u/s 139(9) is a time baring activity, request for a quick resolution is prayed.

II. Our Representation

We implore upon your goods selves to kindly take cognizance of requests we have enumerated as below and kindly take necessary steps to resolve them to the best satisfaction of taxpayers and other stakeholders

  • The ‘e-Proceedings’ functionality is not yet operational in the new portal due to which the taxpayers could not submit their timely response to various notices. Until new portal is properly functioning, necessary directions be given to the officers to follow the principles of natural justice and such officers to stop passing any adverse orders owing to non-receipt of timely responses from the taxpayers to notices.
  • Earlier, e-verification was not required while making submissions in any ongoing faceless assessment or appeal. However, now, e-verification has been made mandatory. This is not possible in several cases – especially in case of foreigners / NRIs who do not have a DSC or an Aadhaar or an Indian mobile number. In such cases, it has become impossible to respond to notices issued by the department. It is therefore suggested that the requirement of e-verification be done away with while responding to notices in case of faceless assessments and appeals.
  • Provide relaxations by way of extensions as necessary in all specific compliance dates which would fall until the new portal starts functioning in a normal mode. Ensure that extensions are given ahead of time so that precious time of tax payers and tax professionals are not wasted in only trying to figure out if the system is working or not. If justice is done, it should be done in time as well and not only done for the sake of eyewash.
  • Further, even though the extension of timelines is given, the ultimate aim of the ministry should be to regularize all the issues and to oversee that all the compliances are made in time. All the issues that are been highlighted to the ministry are resolved and that sufficient time is given to the taxpayers for all the compliances.
  • The pandemic situation is still prevailing in several parts of the country and many taxpayers are under distress, the refunds that are due to the taxpayers may be processed in a manual mode until the new portal is up and running.
  • There are multiple lacunas, issues in the functions of the new portal, there are few issues which are yet to be operational, and stakeholders are left with no choice but to wait at threshold. A consolidation of list with date of operation would reduce the uncertainty amongst all the stakeholders.
  • Allow important multiple stakeholders who can bring about the change in new portal by providing updates, expectation and bridge the issues. Going forward, any development of, or major modifications in any portal or software should consider feedback from its users on its efficiency.

In this context, we request you to consider involving independent and important stakeholders like BCAS who can bring on to the table objective expectations of the stakeholders to the development team, especially when the system is being in its initial period of implementation. This would also streamline the multiple similar feedbacks received from numerous stakeholders that would eventually clog the feedback system/loop.

We also request you to give us appointment to explain in person all the issues mentioned above and if required, we can also work closely with team involved in ensuring smooth running of newportal.

We at BCAS are confident that the various issues that are present and as discussed above in the newly developed portal would be taken up by your good selves on a war footing and that they would be resolved at the earliest of time to enable taxpayers to comply with law and perform tasks which are required. We at BCAS are also sure that our representations enumerated as above would be given proper considerations by your good selves and would be accepted and approved for implementation. Thank you!

Yours faithfully,

For Bombay Chartered Accountants’ Society,

Abhay MehtaDeepak ShahAnil Sathe
PresidentChairman, Taxation CommitteeCo – Chairman, Taxation Committee

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