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December 21, 2021

Erratic and Irresponsible approach of Finance Ministry towards IT Infrastructure

by CA Shivam Jaiswal in Income Tax

Erratic and Irresponsible approach of Finance Ministry towards IT Infrastructure

Chartered Accountants Association, Surat

Ref: CAAS/Representations/2021-22/07

Date: 19-12-2021

To,
The Finance Minister,
134, North Block,
New Delhi – 110011

Sub: Erratic and Irresponsible approach of Finance Ministry towards IT Infrastructure

Ref: Our Representation Letter No. CAAS/Representations/2021-22/05 dt.18-06-2021- Titled “Succour for Current Income Tax Portal Turmoil”

Respected Madam,

Kindly refer to our representation letter No. CAAS/Representations/2021-22/05 written exactly 6 months ago, w.r.t. help that we can afford to the nation in the hour of a national catastrophe in the form of denial of service by Income Tax Portal. Also, we had suggested various ways to tackle the issue and remove hardships to the tax payers, tax professionals and their employees (“the Stakeholders”). However, your good office had chosen the path of availing help from closed group task force consisting of 7 members from ICAI. While we are glad that our alma mater was chosen for getting the solution, we are deeply saddened by the inability of the Ministry to use the inputs received from the said task force and till date no tangible benefits have accrued to the stakeholders.

As per the response to one of the RTI done by CA Saurin Shah, the Directorate General of Income Tax (Systems) had vide Order No.ADG(S)-3/ITO(S)-3/RTI/2020-21/1046 dt.05/07/2021 has admitted that the task of ”development, implementation and requirement based upgradation of website and extending services of filing and processing of Forms/Returns” was awarded to Infosys Ltd for its bid of Rs.3300 Crores in January 2019, based on preliminary assessment (Source: Central Public Procurement Portal CPPP & pmindia.gov.in) (Copy Enclosed). Sanctioned amount is Rs. 4242 Crores, which is the maximum amount that the department can spend. Actual cost of project is not disclosed and is based on work performed. The scope of work is only available to the bidders and is confidential. Further as per the said RTI it is stated that over 5.75 Crore ITRs of AY 2020-21 were processed in the new system. So, if contract was awarded in January 2019, then even after passing of 36 Months (3 Years):

  • the front end of the new portal shows brainless design with various missing drop down menus, buttons and missing notifications;
  • the backend database frequently looses data of various forms filed by the stakeholders;
  • the migrated data of digital signatures is totally lost and stakeholders took enormous pains to replenish the database with digital signature mappings again;
  • the overall website developed is pathetic and hapless;

During these 3 years, the IT Department + the hired agency has not taken the task of development seriously and instead developed a portal of a quality which can even be developed by college students in their summer projects. This shows, either a severe cost cutting at the agency’s end in the development and implementation part OR a flawed requirement with wavering mindset provided by the Income Tax Officials to the development agency.

The nation has seen the drama of summoning the CEO of one of India’s largest software company by your office, yet has repeatedly failed to deliver concrete results till date. The previous website developed by TCS was implemented in 2005-06, in an era when software development tools were scarce, still it was implemented in a matured manner. However, in today’s fast-moving Dev-Ops friendly, rapid development and deployment era, such a huge gestation period to implement a stable website is highly questionable and suspicious too. This is especially so when the above RTI clarifies that there is a mechanism to levy penalty on the development agency, but no penalty has till date been levied. Why no accountability has been set either on the Government Officials or the agency responsible for the ruckus caused due to the indecisiveness or incomprehensiveness of the personnel causing larger harm and hardship to the people, the treasury and the nation at large.

For a powerful government of a powerful country like India with powerful IT Companies, it is rather shameful to note that the stakeholders are at the mercy of a flawed piece of technology, and are working day and night for futile exercises like registering and re-registering on the new portal, updating details, digital signatures and missing documents. Tax Professionals are made unpaid beta testers without any reward or recognition, wasting huge time resource and making working standards of the stakeholders miserable. We re-iterate that most tax professionals and their staff have developed hypertension, insomnia, diabetes, liver and cardiac diseases, on account of their sedentary work environment. Similar is the condition of employees of the client staff. People are held hostage in a cyber-world with ransom in the form of Late Fees and Interest and a threat to levy penalty or to initiate prosecution. No other words better describe the situation than the term “Tax Terrorism”.

It is to be noted that all actions of the Income Tax Department are dependent only on one primary document – “The Income Tax Return”. Every other form is directly or indirectly linked to the IT Return. On one hand when utilities for IT Return are coming in late and IT Portal is throwing unimaginable and unexplainable errors, stakeholders are at a stress to fulfil their statutory duties casted upon them. Upto the date Screenshots and Videos of such errors and glitches can be found HERE. Forcing a tax payer to file IT Return in such a hurry may result into his filing being susceptible to errors and omissions. For this hurried but forced behaviour, he may face statutory consequences resulting into penalty and prosecution, not directly resulting from his actions. But this cycle starts only with “The Income Tax Return”. Hence, filing of IT Return has to be as pious and peaceful as a prayer, without any hurry or worry. So, to stop various timelines form emerging and putting nation’s hardworking stakeholders into the cloaks of criminals, a humane, responsible and transparent behaviour is expected from the Finance Ministry.

Our Representation:

While we do not demand any extension of due date for filing of Income Tax Returns, considering the present situation, until the IT Portal is not fully functional and glitch-free, our demands are as follows:

1. Compensation: A Complete waiver of

a. Penalty,

b. Interest,

c. Late Fee;

2. Condonation: Delays in filing various statutory forms which are subjected to be filed only through IT Portal should be granted condonation automatically;

3. Immunity: Stakeholders should be granted immunity against any monetary or other consequence that may have the effect of putting the stakeholders into hardship arising on account of IT Portal glitches;

4. Grievance Redressal Committee (GRC): For ensuring that the portal is fully functional and glitch-free, an independent Grievance Redressal Committee to be formed, similar to the one formed under GST. The said GRC consisting of technocrats, technology providers and representatives of stakeholders shall decide and flag-off the IT Portal once all errors and glitches are resolved.

5. Alternative Facilitation: Stakeholders should be alternatively facilitated for submitting forms, either as:

a. JSON file through IT Portal without server-side validation on IT Portal;

b. JSON file through registered email ID; OR

c. PDF File of relevant form duly signed digitally from any email ID;

6. Tendering Process: On the date of switchover of the portals and even couple of years before that, the existing IT Portal developed by Tata Consultancy Services Ltd was fully functional at its peak, error-free and without any glitches, yet the same was retarded abruptly. Also, during the tendering process only 2 bids were received in the tender, yet the tendering process was concluded (Source: Central Public Procurement Portal CPPP & pmindia.gov.in) Copy Enclosed. It is apparent from the records available in the public domain that serious deviations have been made in the tendering process employed for awarding the task of development, implementation and requirement-based upgradation of new IT Portal to Infosys Ltd, for which no one is held accountable till date.

7. Setting up of Accountability: After repeated fiascos of IT Portal, what is the surety that even after repeated due date extensions, stakeholders’ money and efforts shall not continue to be wasted by the unstable portal which looses data frequently. Hence, as discussed above, accountability has to be set amongst the Government Officials as well as the development agency, with punitive measures, including but not limited to imposing penalty, suspension and even termination.

8. Rationalisation of Due Dates: Extension of due dates every year is not a sustainable solution for the stakeholders and industry at large. In the past when the forms were simple, yet a period upto October 31stwas allowed. However, with the introduction of more complex return forms and complicated tech involved in the IT Return filing process coupled with faster processing times claimed by CPC, the present due date structure is insufficient to meet the workload and needs a mid-term review. Thus, we demand that a suitable amendment in the Income Tax Act allowing return filing as follows:

  • Audit Cases – Upto 30thNovember every year
  • Transfer Pricing Audit Cases – Upto 31stDecember every year
  • Trust Returns – Upto 31stDecember every year
  • Non-Audit Cases – Upto 31stMarch every year

Provided the IT infrastructure is intact, up and running.

9. Legal backing for Citizen’s Charter: As a part of honouring the Citizen’s Charter, we demand that through a suitable amendment in the Income Tax Act, the Citizens Charter be given a legal recognition and any delay in release of IT Return forms and utilities or subsequent update thereof shall have to be compensated by waiver of penalty, interest and late fees without extension of due date, at the cost and expense of the Central Board of Direct Taxes.

We hope that our above demands are reasonable and shall be met soon in the interest of the nation, failing which the actions of the Finance Ministry shall be deemed to be anti-national and against the Republic of India.

Thanks & Regards,

For Chartered Accountants Association, Surat.

President | Secretary

Encl:

1. RTI Order No.ADG(S)-3/ITO(S)-3/RTI/2020-21/1046 dt.05/07/2021

2. Tender Summary Report for Tender ID: 2018_DREV_304174_1 being RFP for Selection of Managed Service Provider (MSP) for Integrated e-Filing and Centralized Processing Center 2.0

Copy to: –

(1) Prime Minister,

152, South Block, Raisina Hills, New Delhi – 110011 – for information and appropriate action

F.No ADG(S)-3/ITO(S)-3/RTI/2020-21/1046

*****

Disclaimer: The contents of this article are for information purposes only and do not constitute an advice or a legal opinion and are personal views of the author. It is based upon relevant law and/or facts available at that point of time and prepared with due accuracy & reliability. Readers are requested to check and refer relevant provisions of statute, latest judicial pronouncements, circulars, clarifications etc before acting on the basis of the above write up.  The possibility of other views on the subject matter cannot be ruled out. By the use of the said information, you agree that Author / TaxGuru is not responsible or liable in any manner for the authenticity, accuracy, completeness, errors or any kind of omissions in this piece of information for any action taken thereof. This is not any kind of advertisement or solicitation of work by a professional.

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