Saturday, October 14, 2006

E-FILING OF INCOME TAX RETURN - FAILING GOVERNMENT INFRASTRUCTURE - NON-WORKING OF GOVERNMENT PORTAL - JITTERS FOR CORPORATE ASSESSEES

The Income Tax Department, Government of India has achieved another milestone by again failing to deliver. The department made it mandatory for corporate assessees to compulsorily file Income Tax Returns electronically and thereafter to take out physical print out and to file the return physically. The concept was noble and once implemented successfully, will make the task of income tax return filing easier and free from hassle. However, as per track record of the government the following major pitfall have severely impacted the entire process:

  • The revised Form No. 1 to be used for electronic filing is highly complicated, full of errors and very cumbersome to fill up. After completing all necessary preparations, most of the efficient professionals have to spend at least 6 to 10 hours to fill up this form.
  • The form was notified on 24/07/06 and was launched on the depatment’s e-portal www.incometaxindiaefi ling.gov. in was launched only towards the end of September, 2006 whereas the last date of filing of income tax return, will be 31st October, 2006 for the assessment year 2006-07, for which it has been made mandatory.
  • No proper publicity or training was given to the assessees or professionals.
  • The architecture of the system, hardware as well as software launched by the government is highly inadequate and cannot support such a mammoth requirement of more than 6 lakh Companies who are expected to file their income tax return mandatory, as per the new system.
  • There are several data structure errors and technical infirmities in the software and in the form.
  • The form has been notified for electronic fi ling only for the current assessment year i.e. 2006-07.
  • No software is available which can effectively support e.filing to the Income Tax Portal and for the purpose of preparing the returns in the new format. This is in view of very short notice and time given by the Government.
  • The Government has failed to provide any physical front offices, which could provide necessary technical assistance to the assessees.
The All India Chartered Accountants’ Society has taken up this matter with Senior Government Officials including the Revenue Secretary, CBDT Chairman, Member Legislation (CBDT) and others and has submitted detailed memorandum with the following suggestions:
  • Allow the assessees to use the earlier Form No.1, at least for the Asst. Year 2006-2007 and to permit it to be filed manually.
  • The software and hardware of the income tax e filing portal should be upgraded and made user friendly.
  • The physical front offices of income tax department should provide necessary free support for e filing from all district headquarters.
  • It may be worthwhile to permit voluntary e fi ling in the new form. The currently notified Form No. 1 in present format is highly complicated error prone and cumbersome and at this stage, it is nearly impossible to comply with the requirements of these returns. This should be considered for simplification.
  • Enclosures in the form of scanned copies of balance sheet and other detailed document may be permitted to avoid heavy load of data and unnecessary feeding of data by assessees.
  • It is inevitable to extend the date of submission of return for the assessees opting to file their returns electronically. 
The CA profession has always been willing to fully support the government initiative of e.fi ling and e.governance. This initiative will not only facilitate professional delivery, improve fi nancial discipline but will also signifi cantly reduce the corruption. The government should make a commitment to electronically provide refunds as well as respond to other requirements of assessees fully electronically on the lines of MCA-21 Project of Ministry of Company Affairs. The benchmark of MCA-21 is fairly high and the tax department needs to excel. Our professionals are technically equipped not only to implement a technically feasible solution but also to educate and train the public at large so that e.governance initiative of the government is implemented effectively in the larger interest of the society

0 comments:

Post a Comment