Infosys responsible of failures, however Buck finally ends up quitting the federal government

Fixing nothing that isn’t broken is a pithy phrase that is a warning to chronic tinkerers. Nani Palkhivala, in his famous treatise Law And Practice Of Income Tax, had several cheeky, tongue-in-cheek remarks to make in the book he co-authored with another contemporary jurist kanga. One of them was “feverish legislative activity that does no more good than a fever”. There was talk of annual tinkering with the income tax law in the name of recovery. Every change is not an improvement.

With that in mind, the story of Infosys and the government will judge whether it makes sense to launch a new portal for filing income tax returns on June 7, 2021.

So far, the user experience has been anything but satisfied. Many say it was traumatic.

Ideally, a new system should not be rolled out until it has been fully debugged and tested with dummy transactions, in this case a series of returns ranging from simple to complex. Instead, Infosys carelessly used the filers as guinea pigs. At its annual general meeting on June 19, 2021, its COO claimed that the mishaps had essentially been ironed out and around a lakh of returns had been submitted. Those who filed the application took a huge risk. What is the guarantee that no bugs have seeped in? Will Infosys reimburse penalties for beating taxpayers for false disclosure due to systemic disruption? Or will the department be friendlier to the early risers in order to screw up the system rollout?

A parallel run should have been allowed more realistically. Kotak Mahindra Bank, for example, has been running both the new net banking and the old net banking system for about six months, with the choice of system being left to the users. This is how it should be. Take-it-or-leave is hardly a healthy attitude, especially towards law-abiding citizens of the country. It certainly doesn’t go well with a law whose last mile compliance is a nightmare, even for die-hard accountants. After the parallel operation, the old system can be closed if all malfunctions in the new one have been eliminated in the meantime.

In any case, the government is also guilty of inaugurating the new system in the middle of the high season – if people rush to submit their statements. Early risers had the humiliation of completing error-free returns (as certified by the system) but could not verify what was happening with the Aadhaar OTP generation, which fluctuates and has not yet been linked to the net bank account. The absurdity of submitting the return first and then slowly checking it online later is not for you.

There also appears to be an inadequate representation of domain experts on the system design team. Otherwise, error messages such as “Loss on home ownership must not exceed Rs 2 lakh” for rented property would not flash if claimed interest incurs losses on home ownership above Rs 2 lakh. The interest rate limit of Rs 2 lakh only applies to owner-occupied properties. The loss itself is not limited under any income category under the Income Tax Act, including income from home ownership.

GSTN also suffered from bugs and glitches when the Goods and Services Tax (GST) was introduced on July 1, 2017. And things haven’t stabilized yet. But in all fairness to Infosys, which had the privilege and responsibility to design and operate such a complex online tax system that tracks the entire supply chain, it must be admitted that it had the emerging legal argument on its side.

But not this time. The en vogue income tax law dates back to 1961, but is embellished and curtailed with numerous changes from time to time. It is, so to speak, an established law, although it gives rise to legal disputes on an unprecedented scale in tax law. Infosys should therefore have drafted the law in close consultation with domain experts. Unfortunately, when thinking through the transactions in their entirety, the trademark of a computer system is missing.

Will the money stop with Infosys? No, the money will stop with the government, which shouldn’t be in a hurry to impose the new income tax portal on the unsuspecting nation. The mandarins of the north block are said to have subjected the new system to rigorous checks for several days before making it available to the public. Alternatively, parallel running should have been allowed until complaints about satisfaction with the new system have subsided.