To
The Hon’ble Finance Minister & Minister of Corporate Affairs
Government of India
Ministry of Finance, North Block New Delhi – 110001
Subject: Proposal for a multi-vendor model and summary of the current vendor arrangement for the ITR portal of the Income Tax Department
Respected Madam,
Diwali greetings to you, and my compliments on your stewardship of the tax and corporate governance regime. I write to propose institutional improvements in the ITR filing and processing infrastructure of the Income Tax Department and to summarise the currently available factual information regarding the project’s vendor contracts, technical issues, and scope, in order to assist your deliberations.
1. Summary of current vendor arrangement & project scope
On 16 January 2019, the Union Cabinet approved the “Integrated e-Filing & Centralised Processing Centre (CPC 2.0) Project” for the Income Tax Department. The project was approved for a total outlay of ₹4,241.97 crore over 8.5 years, covering expenses including the Managed Service Provider (MSP), GST, rent, postage, and project management costs.
Following a public procurement process, the contract was awarded to Infosys Ltd. as the MSP, which was selected through an open tender as the lowest bidder. Between January 2019 and June 2021, the Government paid Infosys a total of ₹164.50 crore under this project.
The new e-filing portal (www.incometax.gov.in) was launched on 7 June 2021 as part of the CPC 2.0 project. The stated aim of the project was to reduce ITR processing time from approximately 63 days to as low as one day through automation, improved capacity, and unified intake and processing. The CBDT has also publicly indicated that the Department is “engaging closely” with other service providers, including IBM India Pvt Ltd and Hitachi Systems Ltd, for the portal’s functioning.
2. Documented technical issues, taxpayer complaints & litigation risk
Within hours of the portal’s launch in 2021, taxpayers and tax practitioners reported significant issues, including login failures, slow functioning, non-availability of certain functionalities, problems filing miscellaneous forms, and the inability to view past returns. Infosys acknowledged these technical issues.
These problems have persisted. On 2 July 2022, the Income Tax Department publicly stated that “some irregular traffic” had been observed on the portal, for which proactive measures were being taken. As of 31 July 2024, at the end of the primary ITR filing period, reports surfaced that many taxpayers were still unable to access the portal or upload returns on time, causing frustration and potential late-filing penalty risks.
More recently, in September 2025, the portal again faced persistent glitches, payment errors, and challan generation delays during the deadline window for AY 2025–26. Tax professionals publicly sought deadline extensions and complained about system outages. Because of such technical failures, several companies have reportedly considered approaching High Courts seeking relief when they could not file or pay by the due dates due to portal failure.
3. Key risks & operational concerns
- Single-vendor risk: While multiple service providers are indicated, the primary contract for this critical infrastructure rests with a single MSP, concentrating operational risk.
- Deadline pressure: Filing windows see exceptionally high loads. System failures at these peak times impose severe hardship on taxpayers and increase litigation and administrative costs for the Department.
- Service level governance: While contract amounts and scope are public, the specific Service Level Agreements (SLAs)—such as guaranteed uptime, response time, and fault tolerance—appear opaque in publicly available documents.
- Processing scope: Although the portal promises end-to-end processing under Section 143(1), delays in the portal affect the entire downstream chain of manual interventions and departmental workflows.
- Litigation and reputational risk: System failures cause compliance stress, delay refunds, and may attract writ petitions and penalty waiver requests. Each failure adds to the administrative cost and undermines public trust.
4. Proposal for improvement – A Multi-Vendor & Resilient Model
In view of the above facts, I respectfully propose the following enhancements:
- Invite parallel vendors: Allocate intake and processing segments of the ITR/CPC system to multiple major Indian IT service firms (e.g., TCS, Wipro, Tech Mahindra, HCLTech) in addition to Infosys, so that load-sharing and failover become inherent.
- Implement a load-balanced & geo-redundant architecture: Design the system to support multiple vendor endpoints, allowing for seamless failover if one provider’s infrastructure falters.
- Establish transparent SLAs and penalty regime: Publicly publish key service metrics (uptime, response time, peak load capacity) and apply meaningful contract penalties for breaches to align incentives.
- Mandate annual stress-testing & audits: Mandate independent scalability and security audits of the portal well ahead of each major filing window (e.g., March–July) to validate readiness.
- Initiate a pilot program for multi-vendor segments: Begin a pilot rollout of alternate vendor nodes for non-critical modules (such as acknowledgment or refund tracking) ahead of the next full filing season to validate this model.
- Extend this model to MCA services: Given your portfolio also includes the Ministry of Corporate Affairs, apply this multi-vendor resilient model to its e-filing and registry functions for heightened continuity and efficiency.
5. Conclusion & request
Given the large scale of the tax filing ecosystem (over 7–8 crore returns annually in recent years) and the repeated evidence of portal stress, adopting a multi-vendor resilient model will materially reduce outages, taxpayer anxiety, potential litigation, and administrative overhead. It will also significantly strengthen the “Ease of Doing Business” credentials of the government.
I request your kind consideration of the above factual summary and the proposed steps. I would be grateful if the CBDT could be directed to issue an expression of interest to multiple service providers, define clear technical and SLA standards, and schedule a pilot multi-vendor deployment ahead of the next major filing season.
Thank you for your time and consideration.
Author Bio
