CAAS Drags Income Tax Portal Failures to Gujarat High Court

Surat | Gujarat — In a significant escalation, the Chartered Accountants Association, Surat (CAAS) has approached the Gujarat High Court seeking accountability and systemic reform over the recurring failures of the Income Tax e-filing portal. The writ petition highlights what CAAS calls a “cycle of chaos” that penalizes taxpayers and professionals for the government’s own lapses.

The petition comes after yet another compliance season marred by late release of statutory forms and utilities for AY 2025–26, portal crashes, login failures, challan errors, and digital signature malfunctions. “This petition is about dignity, fairness, and accountability. Extensions are a band-aid. We demand a system that works, officials who are accountable, and taxpayers who are not punished for the State’s own failure,” CAAS said in a strongly worded statement.

According to CAAS, of the 9.06 crore IT returns filed annually, at least 60% are handled by chartered accountants and tax professionals. Yet, despite repeated assurances by the CBDT and earlier High Court orders in 2022, the glitches have persisted. Between September 10 and 15, 2025, the portal reportedly functioned at only 48–65% capacity, leaving lakhs of taxpayers unable to file returns, audit reports, or even pay Advance Tax on time—now exposing them to penal interest.

The petition argues that the systemic failures amount to a violation of constitutional rights. It cites Article 14 (arbitrary treatment of taxpayers), Article 21 (intrusion into dignity during festival season), and Article 265 (illegal collection of penalties and interest due to the State’s failure). “Taxpayers are forced into default not because of negligence but because of a broken system. That is unconstitutional,” said Dr. Poddar while filing the plea.

The CAAS has also accused the CBDT of acting irresponsibly by releasing bugged utilities with multiple versions and issuing due date extensions through “chaotic midnight circulars.” The petition further points to a sharp rise in validation checks—up to 204% since 2021—that block filings at the entry level, contrary to Section 139(9), which grants taxpayers time to cure defects post-filing.

Among its key prayers, CAAS has asked the court to:

Mandate the CBDT to release all forms and utilities by April 1 every year.

Create an independent technical monitoring committee including ICAI, IT experts, and industry representatives.

Order refunds or adjustments of penalties and interest collected due to systemic failures.

Implement automatic extensions and waivers when utilities are delayed or the portal crashes.

Calling the situation “a contempt of earlier court orders,” CAAS has also sought punitive action against CBDT for failing to implement reforms despite judicial directions.