The Chartered Accountants Association of Surat (CAAS) has filed a fresh writ petition before the Gujarat High Court under Article 226 of the Constitution, alleging systemic failures in the income-tax (I-T) department’s e-filing portal and chronic delays in the release of statutory forms and utilities for assessment year (AY)25–26. CAAS alleges that the portal architecture itself, which relies heavily on server-side validations and synchronous checks, has made the filing system prone to collapse during peak periods, leaving taxpayers unfairly exposed to penalties and interest liabilities.
CAAS states that the latest petition arises from a new cause of action, as the issues affecting taxpayers and professionals have persisted unabated. It noted that its earlier matters—writ petition Nos. 13589/2025, 13533/2025 and 13582/2025—were disposed on 13 October 2025 only after considering the limited question of extending due dates, leaving the more critical concerns unaddressed.
The Association has argued that the High Court did not adjudicate on persistent portal malfunctions, severe delays in utility releases, audit-period challenges and unintended interest liabilities arising from technical failures, making a new independent petition necessary.
A significant portion of the plea focuses on CBDT’s delay in notifying and releasing income-tax return (ITR) forms and corresponding utilities for AY25–26. Tables in the petition show that several utilities were released months into the assessment year, with multiple versions issued subsequently on a 'trial-and-error basis', shrinking the effective working period for tax professionals.
CAAS submitted that many audit professionals had fewer than 15 working days before the statutory deadline of 30 September 2025, creating an unavoidable compliance crisis. The delay in releasing the schema for third-party software developers, it says, had a cascading effect on the entire chain of preparers and filers.
The Association has documented extensive disruptions on the e-filing portal between 10th September and 16 September 2025, producing screenshots, log reports and grievance records to show taxpayers were unable to log in, upload returns, generate challans or complete e-verification. The petition states that the portal collapse peaked on 15th September, the last date for non-audit ITR filing and payment of the second instalment of advance tax.
Several taxpayers, including petitioner Vipasha Mehul Shah, were allegedly unable to pay advance tax, despite having sufficient funds and attempting to make the payment before midnight.
CAAS argues that the resulting interest burden under Section 234C is arbitrary, confiscatory and violative of Articles 14 and 265 of the Constitution because the delay was caused solely by government system failures. The plea asserts that the interest designed to penalise taxpayers for deferment becomes punitive without fault when imposed under such circumstances.
The petition also draws attention to what CAAS calls a dramatic and unlawful rise in 'category-A validations'—pre-filing checks that entirely block upload of returns if even minor errors are detected. Citing internal data placed on page 21 of the filing, CAAS states that these validations have jumped from 32% to 204% across five assessment years, creating a regime of restrictive rules that have no backing in the Income-tax Act or the Rules.
The petition terms these checks 'ultra vires', arguing that they effectively deny taxpayers the right to file returns and force them to cure defects in advance when the law permits defective returns to be filed and rectified later under Section 139(9).
The petition cites violations of Articles 14, 19(1)(g), 21 and 265, arguing that arbitrary digital restrictions, delayed utilities and systemic failures infringe on the right to equality, the right to practise one’s profession, the right to life including ease of doing business and the principle that no tax can be levied or collected without the authority of law.
CAAS has described the situation as a 'continuing wrong', warranting judicial intervention for a long-term solution rather than repeated short-term extensions.
In its prayers for relief, CAAS has sought mandatory release of all ITR forms and utilities by 1st April each year, limits on pre-filing validations, and an automatic waiver of interest, penalties and late fees whenever non-compliance arises from portal failures or delayed utilities. It has also asked for the creation of an independent technical monitoring committee comprising representatives from the Institute of Chartered Accountants of India (ICAI), technology experts, National Informatics Centre (NIC) and industry bodies to oversee the portal.
Further, it demands disciplinary action against responsible officials or vendors for repeated lapses and a waiver of interest and late fees for the period 10th September–16 September 2025, during which compliance was allegedly impossible.
CAAS says the previous disposal of its earlier petition along with unrelated matters appeared to have been an inadvertent error and expressed hope that the High Court would now address the structural issues that affect millions of taxpayers. It reiterated that accountability for timely notification of forms and stable digital infrastructure is essential for restoring certainty and dignity in the tax compliance system.
The petition marks CAAS’ renewed effort to seek structural reforms in the nation’s digital tax administration, following the High Court's dismissal of its earlier plea without examining the core grievances raised.
