An Insight into Glitches in New Income Tax Portal 2.0 and Solutions

Normally, the filing process of Income Tax Return (ITR) concludes by July end with the usual due date for filing returns of income for the assesses without audit needs is July 31 every year. However, like last year, this year also the ITR filing process is yet to gather progress due to the ongoing Covid-19 pandemic. Apart from the pandemic, the glitches in the newly launched e-filing site are also giving additional pain to the taxpayers.

The Income Tax website, also known as the Income tax portal is an important link between the Income Tax Department and the taxpayers of the country. It facilitates filing of tax returns, different forms under the Income Tax Act and also, performing other work pertaining to tax assessments such as providing responses to Notices, checking refund status queries, rectification, grievance redressal, filing of appeal before first appellate authority (i.e. CIT-Appeal), representation through Video Conferencing, etc.

The old income tax website was simple yet efficient in facilitating all the aforementioned tasks. However, the CBDT vide Press release dated May 20, 2021 announced the launch of new e-filing portal 2.0 for introducing modernization in the taxpayer's experience and to make it more interactive. The press release promised a host of new features of the new e-filing portal that would make the e-filing experience more convenient and user-friendly. For the purpose of migrating and transitioning from the old income tax portal to the new e-filing portal, a blackout period was announced from June 1 2021 to June 6, 2021 whereby none of the sites would be available to the taxpayers for return filing.

Salient Features of New Income Tax Portal 2.0

• The portal has integrated immediate processing of Income Tax Returns (ITRs).
• It allows quick refunds, enables interactions, uploads, or any pending actions. All these actions will be displayed on a single dashboard for the taxpayers to follow up on.
• The idea is to reduce the processing time for returns from the current 63 days to one day only and ensure refunds are processed seamlessly.
• The new portal has free-of-cost ITR preparation software, complete with FAQs. The software helps taxpayers with ITR categories which can be quite complex to understand along with a new call centre for taxpayer assistance and queries.

The taxpayers highly awaited the launch of the new e-filing portal on June 7, 2021, so that they could complete their tax-related work which was pending due to the blackout period. However, since its launch, the new e-filing portal has been prone to numerous glitches. Such glitches have restricted taxpayers from carrying out not only any tax-related work but also any business transaction which is subject to tax compliance.

Common Glitches Found in New Portal

• For instance, before making a foreign remittance, taxpayers have to obtain a certificate in Form 15CB from a Chartered Accountant certifying the applicability of tax withholding provisions. Since the launch of the new portal, CAs have not been able to upload any certificates on the portal. This led to limitations on foreign remittances. As a temporary measure, the department has relaxed the requirement to upload 15CB on the website and allowed CAs to give manual Form 15CBs to their clients. In my opinion in place of reverting back to such manual system of Form15CBs, the department could have alternatively allowed the taxpayers or tax representatives to use the older income tax website till the time the new portal becomes free from glitches in order to avoid hardship on the part of the taxpayers for maintenance of online as well as manual data for such remittance of records.
• Another issue might be the pre-filled ITR data cannot be provided to the taxpayers yet as the due date of furnishing the income tax details including income, TDS and details of specified transactions by the specified person has not been passed over yet. Filing of ITR without such details is not advisable to the taxpayers unless extraordinary circumstances warrant the same.
• Returns for 2021-22, which are uploaded through utility available at the e-filing site, are not e-verified by Aadhaar number or any other OTP. The department has still not issued Schema (Electronic forms) of the I-T return, including ITR-2, ITR-3, ITR-5, ITR-6 ITR-7, even after the beginning of new financial year.
• The electronic forms 3CA-3CD and 3CB-3CD for audit u/s 44AB of the Income Tax Act, 1961, are not available at the portal, Many I-T returns for assessment year 2020-21 are not being processed. Due to this I-T refunds are pending with the department even after six months of filing returns. So, assesses are facing liquidity issues.
• The speed of uploading replies/submissions at e-proceeding portal is slow. Sometimes replies uploaded do not reflect at the I-T portal.
• Assesses are not able to download receipts of any forms already uploaded at the I-T site. Besides taxpayers not able to access their old records and there are other anomalies in past tax records.
• Problem in downloading notices under section 143(1) of AY 2019-20 and previous years.
• Form-3 under the 'Vivad se Vishwas Scheme' is not visible.

Author's opinion on overcoming the present anomalies

• The income tax department should allow filing of returns on old portal simultaneously to ease the filing process and to save the taxpayers from undue hardships faced by them. A scheme of parallel changeover shall be implemented so that filing process is not disrupted and once the new portal gears up the old one shall be gradually stopped.
• Speedy Processing of refunds of previous AY shall be done so that liquidity of assesses is not effected.
• The time slot selected for the changeover was not suitable as onset of June turns out to be the peak season for tax payers this could have been delayed or shifted to January-February as it would have not disrupted the functions so badly at that time.
• The user manual issued by the department would have been user friendly as the name suggest and not so voluminous containing 998 pages so that one may go through it easily for any reference.

Conclusion

Since it is in the transition stage it is expected that the new web portal would gradually start functioning efficiently and would definitely add more value added and user friendly experience to the taxpayers. Infosys has acknowledged the technical issues in the functioning of the portal and shared the status of the resolution concerning the issues highlighted by the stakeholders and has been working to fix the technical issues noticed in the functioning of the portal and they have augmented the resources for execution of the project on the hardware as well as the application side and that some issues have already been identified and fixed.

Every effort has been taken to provide an insight about this emerging topic and to cover all important areas of it, any suggestions and improvements will be welcomed and highly appreciated.