I-T assessments hit as e-filing portal’s communication with back-end broken | Business Standard News

Clipped from: https://www.business-standard.com/article/economy-policy/i-t-assessments-hit-as-e-filing-portal-s-communication-with-back-end-broken-121070800906_1.html

A host of activities have been stalled on the upgraded e-filing portal; banks seek undertaking from customers for overseas payment

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Even after a month of the launch of the upgraded e-filing portal for income tax, its non-functionality has brought the entire return filing and assessment process to a grinding halt. The contract for the portal upgradation was awarded to tech major Infosys in 2019 for Rs 4,242 crore.

According to tax department sources, Income Tax Business Application (ITBA), the application that is used by Income Tax officials for assessment, is unable to communicate with the taxpayers as the communication channel is e-filing portal. The notices and show causes are generated in the ITBA and communicated to the taxpayers through e-filing portal. Taxpayers now can’t file the reply as they can file reply only through e-filing portal.

The issue now is, as a tax official explains, ITBA – which was developed and run by TCS while the upgraded e-filing portal – developed by Infosys, “are not talking to each other”. The data transfer between ITBA and the e-filing portal is not happening.

“Suppose your return is selected for scrutiny, the queries are sent through email. But the assessee won’t be able to reply to that. For that e-filing portal is required,” said an official. Replies filed at the e-filing portal will be communicated to the IT department through the link between e-filing portal and ITBA, only if that link is working. That link is not working at this point in time. As a result, the entire assessment process is in limbo,” the person added.

The assessment of returns of Assessment Year 2018-19 is currently going on, and the extended date of time barring is September 30, 2021. If the assessment order is not passed before the time barring date, the revenue will be lost forever, tax officials said.

Not only return filing and assessment, a host of other activities that are typically performed through the portal, could not be done till date, sources said.

Firms are not able to register themselves on the portal; TDS returns can’t be filed, forget password option not working, IT Returns in PDF cannot be downloaded, IT acknowledgements in PDF cannot be downloaded – at least 25 such activities have been impacted, government sources said.

The e-portal’s non-functioning has created more hassles and delays in overseas payments. Banks are asking extra documentation from customers in the form of an undertaking that they will upload the 15CA/15CB forms immediately once the income tax site gets functional. These are forms that define the domestic tax treatment for the payment in terms of taxes deducted at source. So, companies involved in foreign transactions will now have to keep a continuous track of when the site will get operational so they do not default on the undertaking, a customer of a large private bank said.

An upgraded version of the e-portal was launched amid much fanfare on June 7. In preparation for the launch of the upgraded portal and for migration activities, the existing portal wasn’t made available by the Central Board of Direct Taxes (CBDT) to the taxpayers between June 1 to June 6. The upgraded portal was aimed at providing a modern, seamless experience to taxpayers, CBDT had said. The e-filing portal, which first went live in September 2004 and was working fine, prompted many, including opposition Congress party MP Shashi Tharoor to question the rationale for the upgrade.

Finance Minister Nirmala Sitharaman tagged Infosys’ non-executive chairman Nandan Nilekani on Twitter to draw his attention and, probably, to seek quick resolution after glitches surfaced soon after the launch. “I see in my TL (timeline) grievances and glitches. Hope Infosys and Nandan Nilekani will not let down our taxpayers in the quality of service being provided,” Sitharaman had tweeted. It is quite unprecedented for a central minister tagging a private sector player in the social media to register grievances. Nilekani responded saying technical issues were observed on ‘day one’ and Infosys was working to resolve those issues.

Vendor selection

Government sources said one of the reasons for the unending glitches is because Infosys has outsourced a chunk of the project work to smaller, tier-3 IT services providers.

“Infosys outsourced the contract to certain vendors for developing and execution of the contract. The core work, which is coding, was also outsourced. We don’t know whether these companies have the wherewithal to execute a project of this kind,” said a tax department official.

Infosys declined to comment on the issue. “We’re in our silent period now, however, clarity on the Income Tax matter was provided at our recently concluded AGM,” the company’s spokesperson said in response to a detailed query by this newspaper. A detailed questionnaire sent to the CBDT did not elicit any response.

During its 40th AGM when shareholders of Infosys asked the company the reason, it said, “Some of the glitches that impacted the seamless operation of the recently launched Income-Tax portal have been addressed and these were related to filing forms, e-proceeding, KYC related issues and instant payment among other areas.”

U B Pravin Rao, COO, Infosys said: “Infosys is continuing to resolve the concerns in the new IT e-portal. For the last week several of the tech glitches which impacted the performance and stability of the portal have been addressed and as a result we observed lakhs of unique daily users on the portal. Close to 100,000 IT returns have been filed so far.”

He further said: “As new functions are introduced in this new complex platform we have observed concerns related to filing forms, e-proceeding KYC related issues and instant payment among other areas. Our project teams are working to resolve this to ensure a seamless experience for users.”

Several questions are being raised by tech professionals and the finance ministry over the fiasco. To start with, why a contract of such a nature – which is of national importance – was outsourced to little known firms?

Tax department sources said for any glitches in the e-filing portal, the income tax department has to contact these vendors for resolution, instead of Infosys. They said these companies are saying resolution of such issues were not in the original contract, hence the department has to pay extra for fixing the glitches or for any minor changes.

Technology professionals said subcontracting is not new to the IT services sector and that every major IT service player, be it IBM or Accenture or any other player works with sub-contractors. However, what matters in subcontracting is the quality of the sub-contractor. Sub-contractors are hired because they have expertise in a particular core software or some core module of a software.

“Having said that, when large system integrators like Infosys, TCS or Wipro or IBM use sub-contractors the final responsibility or programme management remains with these players. They have to make sure that the final product that goes to the client is seamless. For all the work that is outsourced there is always a point of the person within the company who is responsible for the job,” said a person who has worked in the sales team in some of the leading multinational corporations.

“The responsibility of quality assurance, integration, penetration testing, security and overall functionality all falls on the primary vendor (in this case Infosys) who has picked up the contract. This is true for each part of the contract such as hardware, network systems, database management, middleware…across every layer the testing and quality assurance is the responsibility of the system integrator [SI],” the person added.

Low margins

The whole issue begs a question on why do such big companies outsource, particularly such important projects like this, that too, a government contract.

Experts that Business Standard spoke to said that the cost structure that the government projects have are so low in margins that companies prefer to work with sub-contractors. “Indian players’ cost structures are tuned to cater to their majority markets like the US and Europe. India is a low margin market, so instead of setting up a team on such projects, they get a few people from within the company who are experts in the technology and they manage people from subcontractors who are tuned to Indian market,” said an analyst of a leading consulting firm on the condition of anonymity.

Any portal of this magnitude, which acts as an interface to the masses, the taxpayers of the country in this case, is typically tested before launch. Dry runs are conducted to see what level of peak demand that can be handled.

“Sub-contractor will deliver to the primary vendor, and it is the responsibility of the primary vendor to make sure that all the benchmarking is done according to service level agreement SLAs. Only and only when the primary vendor ticks all the boxes does the platform go live. In the case of these portals, it looks like the user experience testing was not rigorous enough,” said another person who had been heading a software product company for over a decade on condition of anonymity.

Many are also raising questions that how can the government allow such an outsourcing clause, that too of the core activities.

“Generally, the government does not prefer that the systems integrator uses vendors, and even if it does allow, it is only restricted to support services. So how did the government or the IT department allow this also needs to be questioned?” said a person who was heading an IT services company, which was later acquired by a PE player.

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