Representation for extension of Income Tax due dates to Finance Ministry

Synopsis of the Representation by ‘Bhayandar CA Social Group’ made for extension of due dates – To the Finance Ministry on 24-12-2021

We have not asked any extension of the due dates. We have asked for our fundamental right to be professionally engaged in the profession of the Chartered Accountancy by having seamless access to the portal. If the new Web portal had functioned smoothly ever since it was introduced w.e.f. 7th June 21 then by this time we would have perhaps completed the entire uploading. The need for the extension has been occasioned due to the faulty software by Infosys and delayed hosting of many forms and utilities.

The point which we have emphasized is that the project,  which was launched with the noble object of reducing  the processing time from 63 days to one day and providing ease of work to the tax payers,  has now become  a running joke with the portal being inaccessible more often than not.

We are unable to understand why the department is still persisting with the service provider, Infosys, when its incompetency and lackluster approach  has been proved beyond reasonable doubt. Why is the department not enforcing the penalty clause of the service agreement and compensate itself for the loss of millions of manhours? It is regrettable to see that the department is trying to extract this compensation, not from the service provider but from the tax payers by levying penalty, fees, interest etc. for no fault of theirs.  Had it been a project of some foreign country say USA then, by this time the service provider would have been penalized so heavily that the insolvency proceedings would have become inevitable. The undue favour to the service provider at the cost of the tax payers is beyond the comprehension of a reasonable person. It raises doubts about the presence of some Extra-Contractual gratification.

Given the official statistics of the department, we have just analyzed the situation only mathematically and found that at the current rate of filing of the returns, even if we take the comparative figures of the returns filed for AY 2020-21 of 595.00 Lakhs tax payees, then there remains a shortage of 174.70 lakhs returns which would have to be filed upto 31-12-21. It means a daily filing of 21.84 lakhs returns. However, given the average figure of daily filing of 8.46 lakhs tax payers, the number of returns required to be filed in 8 days( From 24th  Dec to 31st Dec.21) would be 21.84 lakhs per day. It means it will require a minimum of 21 days to complete the backlog. This figure would be mind boggling if we compare it with the number of registered users of 980.67 lakhs the, it would require minimum 67 days to complete the backlog and that too, if all the glitches are removed.

The Ministry must take a realistic view of the above grim situation and must declare an extension of time of minimum 2 months without any delay. This extension is the responsibility of the department and we have asked for it as a matter of our fundamental right.

Full text of Representation by ‘Bhayandar CA Social Group’ is as follows:-

BHAYANDAR CA SOCIAL GROUP

Dated: 25th December, 2021

To

Hon’ble Union Minister of Finance,
Ministry of Finance,
Government of India,
North Block,
New Delhi-110001
email: fmo@nic.in

Sub: 

1) Extension of Due Dates- For the Department & for Infosys.

2) No Extension required by the Tax Payers

Respected Madam,

At the very outset , we wish to make it clear that by this representation we are not asking for any extension of the due dates due to any fault at the end of  the tax professionals and at the tax payees. This representation has been occasioned due to the fault lying at the end of the Department and the Service Provider, Infosys.

1) We are a non-profit group of Chartered Accountants consisting of nearly 500 members, in practice and in service both. We are engaged in providing value added solutions inter se and also to the tax payers in general. We are instrumental in decoding the complex tax requirements and educating the tax payers of the various change brought by the Department from time to time by an exchange of information on a time-sensitive basis by conducting various seminars, online & offline, and persuading the tax payers ensure timely compliance of the requirements of the department.

2) Up to A.Y. 20-21, the website facilitating online filing of the returns, audit reports and other income tax forms was functioning smoothly and nearly 6 crores returns were filed without much technical difficulty. This is in addition to other documents which were uploaded under the faceless scheme of assessment.

3) Notwithstanding the above, the various due dates for the AY 20-21 under the Act were extended from time to time mainly because of loss of working hours due to lockdown, locational restrictions and health issue of the professionals.

4) The Website of the department was in operation upto 30-06-21 and thereafter a break of 6 days was given to facilitate transition to new software developed by the Infosys which was, in 2019, awarded a contract to develop the next-generation income tax filing system to reduce processing time for returns from 63 days to one day and expedite refunds. The portal was supposed to go live from 7^th June 2021.

5) However, this new software had a bumpy start since the day of its launch, with taxpayers and professionals reporting glitches and difficulties in its functioning and a further 7 days was given to Infosys to resolve all the issues.

6) This matter eventually landed in the Delhi Court in the case of Krishan Agarwal Vs. PCIT (Delhi High Court) Dated.- August 27, 2021 which observed that the new income-tax software and programs, before being opened to public, should have been well-tested on a sufficiently large sample set of assessees. The Delhi High Court further said,  that technology is intended to ease and facilitate transactions and cannot be used to harass an assessee by asking him to repeatedly file unnecessary and irrelevant forms. “This court is also of the view that the software should be applied by lawful directions and it cannot be that the computer lays down an agenda contrary to law according to which the court and assessees have to function.

7) The Delhi High Court observation is significant as it comes at a time when millions of assesses are grappling with the glitches in the new I-T programs. The Finance Minister had summoned the developer, Infosys’ CEO and expressed “deep disappointment” over persisting glitches and had given time till September 15 to resolve all the issues. However, this date also passed by without any noticeable improvement.

8) The I-T portal is not a social media portal where one can afford to have a hit or a miss. “It is a statutory matter”. Now, almost six months have lapsed and the new portal is not functioning smoothly. Both the taxpayer and tax officers are in difficulties.

9) The DGIT (Systems) assured the Delhi High court that the directorate would take steps to improve on both the fronts, namely, co-ordination and feedback and that wherever necessary, improvements in the process shall be carried out. The  DGIT (Systems) displayed confidence that it would be able to resolve the glitches in the system within a fortnight. However, nothing desirable happened so far and the assessees are reeling under the pressure unleashed by the daily reminders to taxpayers through e-mails, SMS and media campaigns warning taxpayers to file their income tax returns by the due date 31-12-21. without further delay.

10) On its part, the company said that “The company is focused on rapidly resolving these challenges while working closely with the chartered accountant community to ensure that a comprehensive set of user scenarios are supported and thoroughly tested before deployment. However, improvement is conspicuous by its absence and the tax payers continue to suffer.

11) Now that the Tax season is in full swing, we are having frustrating days after days and hoping against hopes that the new I-T portal would start functioning as desired.

12) As per the information available in the public domain, Infosys was awarded the contract in 2019 to develop the new I-T portal, replacing the old one, in a bid to reduce the processing time from 63 days to one day for a total outlay of Rs 4400 crore. The idea was to have a taxpayer-friendly portal that was simple in design and use, and expedite refunds.

13) What transpires from the above is that a project of such a massive scale was perhaps not well defined and launched it in a rush even when the portal wasn’t complete at the time of launch and further that there was a lack of testing. The portal was launched prematurely before testing. The user acceptance test was not done by the I-T department.

14) Following glitches in the portal, the Income Tax Department had to allow manual filing of remittance forms and extended the due dates for electronic filing of forms related to intimation by pension funds and sovereign wealth funds.

15) Therefore, the project which was launched with the noble object of reducing the processing time from 63 days to one day has become and providing ease of work to the tax payers has now become  a running joke with the portal being inaccessible more often than not.

16) We are unable to understand why the department is still persisting with the service provider, Infosys, when its incompetency and lackluster approach has been proved beyond reasonable doubt. Why is the department not enforcing the penalty clause of the service agreement and compensate itself for the loss of millions of manhours? It is regrettable to see that the department is trying to extract this compensation, not from the service provider but from the tax payers by levying penalty, fees, interest etc. for no fault of theirs.  Had it been a project of some foreign country say USA then, by this time the service provider would have been penalized so heavily that the insolvency proceedings would have become inevitable. The undue favour to the service provider at the cost of the tax payers is beyond the comprehension of a reasonable person. It raises doubts about the presence of some Extra-Contractual gratification.

17) Lastly, we submit the statistics of the returns filed so far compared with the returns filed last year and also in the light of the total number of registered users on the portal. These statistics have all been taken from the official tweeter handle and as published from time to time.

18) The department claims to have a registered user base of nearly 980.67 lakhs and as per the statistics only 409.33 Lakhs have filed their returns as upto 22^nd December 2021. This is clear from the following snapshot-

Even if we take the comparative figures of the returns filed for AY 2020-21 of 595.00 Lakhs tax payees, then there remains a shortage of 174.70 lakhs returns which would have to be filed upto 31-12-21. It means a daily filing of 21.84 lakhs returns. However, given the average figure of daily filing of 8.46 lakhs tax payers, the number of returns required to be filed in 8 days( From 24^th  Dec to 31^st Dec.21) would be 21.84 lakhs per day. It means it will required a minimum of 21 days to complete the backlog. This figure would be mind boggling if we compare it with the number of registered users of 980.67 lakhs the, it would require minimum 67 days to complete the backlog and that too, if all the glitches are removed.

The Ministry must take a realistic view of the above grim situation and must declare an extension of time of minimum 2 months without any delay.

19) However, we wish to make it very clear that this extension has been occasioned only due to the failure of the system of the department and that the tax payers have absolutely no hand in this mess. The extension required from the end of the tax payers due to non-availability of staff due to CA exams has not at all been considered in it. If we take into account the delay due to Changes in Audit Forms, Due dates of Scrutiny assessment ending on 31-12-21, delayed publishing of the AIS data, over lapping dates etc. then even more days of extension would be required.

20) Finally, We are not asking for any extension of due dates for reasons attributable to the tax professionals and the tax payers. If the new web portal of the department were to function without hitch then, by now we would have successfully uploaded the returns and the forms by the given due date. What we are asking for is our fundamental right to have an smooth access to the portal without any hindrances, working fully 24 X 7.

21) Table of the actual statistics available at the official tweeter handle of the department. 

As at 23^rd December 2021

Top Representation Published on Taxguru requesting for Extension of Due Dates of ITRs, Tax Audit Report, Transfer Pricing Audit, GSTR-9, GSTR-9C and Annual ROC Forms related to Companies and LLP –

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Download full Text of Memorandum of Representation for Extension of Due Date- By Bhayandar CA Social Group