Don’t fix anything that ain’t broken is a pithy expression that is a warning to chronic tinkerers. Nani Palkhivala in his celebrated treatise Law And Practice Of Income Tax had several chastening tongue-in-cheek observations to make in his book he co-authored with another contemporary legal luminary Kanga. One of them was “feverish legislative activity achieving no more good than a fever”. The reference was to annual tinkering with the income tax law in the name of improvement. Every change is not an improvement.
It is against this backdrop that history will judge Infosys and the government about the wisdom of rolling out a new income-tax return filing portal on 7 June 2021.
The user experience has thus far been anything but happy. Many aver it has been traumatic.
Ideally, a new system should not be rolled out until it is comprehensively debugged and tested with dummy transactions, in this case array of returns, ranging from simple to complex. Instead, what Infosys has done is to blithely use filers as guinea pigs. In its AGM on 19 June 2021, its COO has claimed that the glitches have been substantially ironed out and around one lakh returns have been filed. Those who have filed have taken a big risk—-what is the guarantee that errors haven’t seeped in? Will Infosys reimburse penalty if any slapped on taxpayers for wrong disclosure attributable to systemic glitches? Or will the department be kinder to the early birds in deference to the system rollout botch up?
More realistically, there should have been a parallel run allowed. Kotak Mahindra Bank for example has been operating both the new net banking and old net banking systems for about six months now, with the choice of the system left to the users. This is as it should be. Take-it-or-leave it is hardly a healthy attitude, especially towards law-abiding citizenry of the country. It certainly does not sit well with a law whose compliance in the last mile is nightmarish even for the dyed-in-the-wool accountants. After the parallel run, the old system may be closed if in the meanwhile all glitches in the new have been eliminated.
At any rate, the government too is guilty of inaugurating the new system bang in the middle of the busy season—when people rush to file their returns. Early birds have had the mortification of completing error-free returns (as certified by the system) but unable to verify, what with Aadhaar OTP generation playing truant and linkage with net banking account not yet established. Not for them is the inanity of filing the return first and verifying it online leisurely later on.
There also seems to be inadequate representation of domain experts in the system design team. Otherwise error messages such as ‘loss from house property cannot exceed Rs 2 lakh’ would not flash for let out properties when interest claimed throws up loss from house property exceeding Rs 2 lakh. The Rs 2 lakh limit for interest is only for self-occupied properties. Loss itself has not been capped in the income tax law under any head of income including income from house property.
GSTN too suffered from bugs and glitches on Goods and Services Tax (GST) rollout on 1 July 2017. And things haven’t stabilized yet. But in all fairness to Infosys which has had the privilege and responsibility of designing and operating such a complex online system for tax that tracks the entire supply chain, it must be conceded that it has had the nascent law argument on its side.
But not this time round. Income tax law in vogue is of 1961 vintage though embellished and pruned with numerous amendments from time to time. It is a settled law, so to speak, though it spawns litigation on a scale unrivalled in tax laws. Infosys ought to have therefore designed the law in close consultation with domain experts. Thinking through the transactions in their entirety, the hallmark of a computer system, in other words has been sadly missing.
Does the buck stop with Infosys? No, the buck stops with the government which should not have been in a tearing hurry to thrust the new income tax portal on the unsuspecting nation. The mandarins of North Block should have ruthlessly subjected the new system to rigorous checks spanning several days before making it available to the public. Alternatively parallel run should have been allowed till complaints ebbed about the satisfactoriness of the new system.