KSCAA Flags Delays in ITR Forms and Portal Glitches

The Karnataka State Chartered Accountants Association (KSCAA) has submitted a representation to the Union Finance Minister highlighting difficulties faced by taxpayers and professionals due to delayed release of Income Tax Return (ITR) forms, persistent portal glitches, and mismatches in the Annual Information Statement (AIS) for AY 2025–26. KSCAA pointed out that ITR-5, ITR-6, ITR-7, and audit forms were only released in July–August 2025, compressing the compliance window. Technical problems include GST turnover data being made available late, incorrect prompts for exemptions under Sections 54/54F, duplicate and misclassified entries in AIS, and TDS mismatches that obstruct filing. Frequent portal downtimes, validation errors, and disruptions caused by undersea cable cuts have further affected compliance.

The association also flagged overlapping compliance burdens, such as GST, MCA, and tax audit filings falling within the same period, alongside increased audit workload due to new disclosure requirements. Limited working days, national holidays, and weather-related disruptions have compounded the problem. According to KSCAA, these systemic delays shift the financial burden onto taxpayers, who risk interest under Sections 234A/B, late fees under Section 234F, penalties under Section 271B, and denial of loss carry forward under Sections 80/139(3).

To address these concerns, KSCAA requested measures including enhanced portal stability, rectification of AIS mismatches, reduced schema changes during peak filing, and improved grievance redressal. It also urged compliance relief through temporary relaxations in validations, consultation before introducing major disclosure changes, and realistic deadlines. The association emphasised that administrative delays undermine the objectives of the Taxpayer’s Charter and the government’s ease of doing business initiative, while leaving taxpayers without effective remedies. KSCAA called for immediate corrective steps to restore confidence in the tax system.

KARNATAKA STATE
CHARTERED ACCOUNTANTS ASSOCIATION (R)

Shivaprakash Viraktamath, President
Siddartha S Javali, Secretary

To,
Smt. Nirmala Sitharaman,
Hon. Union Minister of Finance and Corporate Affairs,
Government of India

Date: Wednesday, 10 September 2025
Ref No: 001/2025-26

Respected Madam,

Subject: Representation on Challenges due to Delayed Release of ITR Forms, Portal Glitches, and Data Mismatches in AIS

The Karnataka State Chartered Accountants Association (R) (KSCAA), established in 1957, is a premier body representing the Chartered Accountancy profession in Karnataka. With a consistent focus on upholding professional ethics and supporting trade, commerce, and industry, KSCAA has been engaging through seminars, workshops, and timely representations on matters of tax policy and administration.

We draw your attention once again to the issues raised in our earlier representation dated 26 April 2025 (Ref. No. 011/2024-25), wherein we had highlighted the adverse consequences of delayed release of Income Tax Return (ITR) forms and utilities for AY 2025–26. Unfortunately, many of these challenges have now materialised and are being severely experienced by taxpayers and professionals.

KEY CHALLENGES BEING FACED

1. Delayed Release of ITR and Audit Forms

• ITR-5, ITR-6, ITR-7 and audit forms (3CA/3CB/3CD, Form 10BB) were released only in July– August 2025, compressing the compliance window.
• The long-established practice of notifying ITR forms by 1 April has once again not been followed. This year, the delays have been particularly grave, severely limiting preparation time for tax filers.

2. Portal and Technical Issues

• Prefilled GST turnover data was enabled only in mid-August, creating reconciliation challenges.
• Returns claiming exemption under Sections 54/54F were being incorrectly incorrectly prompting for CGAS utilization details, even in cases where investments were fully utilized.
• Persistent mismatches in AIS data, particularly in respect of sale of shares and securities, including duplicate entries and incorrect reporting under inappropriate heads, continue to cause excessive reconciliation challenges with books of accounts and AIS.
• TDS reflecting under the wrong head/section is creating significant difficulties, as the system does not permit filing unless disclosed under the same head, thereby causing trouble in correctly reporting and offering such income to tax, thereby preventing correct reporting and proper tax offering of such income.
• TDS deducted on exempt income is also creating complications, as the system requires disclosure, even though such income is not otherwise taxable.
• Frequent schema changes and validation errors have forced repeated revalidations.
• Portal downtimes and error messages during peak compliance periods further disrupt the process.
• Undersea cable cuts in the Red Sea have disrupted internet in Asia and the Middle East, including India, causing slowdowns and, in some cases, complete outages, thereby causing further operational challenges.

3. Overlapping Compliance Burdens

• Statutory filings for GST, MCA, and Tax Audit reports overlap with return filing timelines.
• Adoption of ICAI’s Guidance Note on NCE financials has added substantial audit workload due to expanded disclosures.
• National holidays and weather-related disruptions have further reduced effective working days.
• Enhanced reporting mandates require multiple reconciliations across GST, TDS, and accounting records, which are difficult to complete within the curtailed time frame.

4. Financial Liabilities on Taxpayers

• The delay has resulted in increased risk of defaults, exposing taxpayers to interest under Sections 234A/B, late fees under Section 234F, penalty under section 271B and potential denial of carry forward of losses under Sections 80/139(3).
• Though the burden of these costs falls on taxpayers, they primarily arise from administrative delays, thereby causing avoidable hardship.

OUR SUBMISSIONS AND REQUESTS

While the Department has been highlighting statistics on returns filed, the ground reality is that professionals and taxpayers are struggling with systemic challenges, portal instability, and compressed timelines. We therefore humbly request the following measures:

1. Maintain Portal Stability

• • Rectify issues relating to AIS mismatches.
  • Minimise changes to schema and validations during peak periods.
  • Enhance system capacity to prevent downtime.

2. Compliance Reliefs

• • Provide temporary relaxations in validations to allow genuine returns to be filed without being blocked by technical validation errors.
  • Institute clear and practical remedies for delays directly caused by ongoing systemic and portal-related issues.

3. Grievance Redressal

• • Strengthen grievance resolution mechanisms with faster disposal timelines during peak compliance season.

4. Consideration of Practical Difficulties

• • Recognise the clustering of deadlines and provide operational remedies to ease compliance pressure on professionals and taxpayers.
  • Engage stakeholders in advance consultation where substantial changes in disclosure requirements are proposed.
  • Ensure that compliance timelines are realistic and provide adequate time for accurate reporting without compromising quality

CONCLUSION  

The persistent delay in the release of ITRs, coupled with recurring technical glitches on the portal has resulted in significant frustration and loss of valuable time for both tax payers and professionals alike. These inefficiencies run contrary to the principles of the Taxpayer’s Charter and undermine the Government’s stated objective of promoting “Ease of Doing Business.”

At present, assesses have no effective remedies for such glitches or issues, as applications for condonation remain largely procedural and rarely provide genuine relief to tax filers. It is therefore imperative that urgent corrective measures be implemented without further delay, so that compliance can be carried out smoothly and in a manner that upholds fairness and inspires confidence in the tax administration.

KSCAA reaffirms its commitment to facilitating smooth tax compliance and assisting the Income Tax Department in achieving its policy and administrative objectives. However, timely release of statutory forms and a stable portal remain critical prerequisites for ensuring taxpayer confidence and compliance accuracy. We therefore humbly request your timely immediate operational measures to ensure fairness and strengthen trust in the tax system:

• Address current systemic challenges,
• Clarify responsibility for delay-induced liabilities, and
• Provide suitable relief to taxpayers and professionals affected by these issues. We thank you for your kind consideration.

Yours sincerely,

Encl.: Annexure 1_ KSCAA Representation dated 26^th April 2025

CC:

1. Shri Ravi Agarwal, Chairperson, The Central Board of Direct Taxes

2. Shri Pankaj Chaudhary, Union Minister of State, Finance

3. Shri Arvind Shrivastava, Hon’ble Revenue Secretary

4. Shri Ganapati Bhat, PCCIT, Karnataka and Goa