Income Tax Portal Glitches 2026: How CAs Can Protect Clients from System Errors

Every CA in India has a war story about the Income Tax Portal. The utility that crashed during the filing deadline. The AIS that showed phantom income. The response that was submitted successfully — only to disappear without a trace. The schema validation error at 11:45 PM on 31st July.

These are not minor inconveniences. Portal glitches directly cause incorrect demands, missed deadlines, and unjust penalties. And the burden of dealing with them falls squarely on CAs and their clients.

This guide is a practical playbook for documenting, defending against, and challenging adverse consequences that arise from Income Tax Portal failures.

The Current State of Portal Issues (2025-26)

The Income Tax Portal (incometax.gov.in), managed by Infosys since its troubled 2021 launch, has improved significantly — but systemic issues persist. Based on practitioner reports and ICAI representations through FY 2025-26, the most common problems include:

1. AIS/TIS Data Errors

The Annual Information Statement (AIS) and Taxpayer Information Summary (TIS) are the backbone of automated processing. When they contain errors, the downstream consequences are severe:

• Duplicate transactions: The same income appearing twice (e.g., mutual fund redemption reported by both AMC and RTA)
• Incorrect financial year mapping: Transaction from March recorded in the wrong FY
• Phantom income: Income attributed to wrong PAN due to data entry errors by reporting entities
• Missing corrections: AIS feedback submitted months ago still not reflected

2. ITR Utility and Validation Issues

• Late release of utilities: Offline utilities for complex ITR forms (ITR-5, ITR-6, ITR-7) often released weeks after the form notification
• Schema changes mid-season: JSON schema updates that invalidate previously prepared returns
• Validation errors on valid data: The utility rejecting legitimate entries due to overly strict regex patterns
• Pre-fill data mismatches: Auto-populated data in the utility not matching the actual AIS

3. Portal Functionality Failures

• E-verification failures: Returns stuck in "submitted but not verified" state despite Aadhaar OTP completion
• Response submission errors: Responses to notices uploaded successfully but not reflected in the case status
• Document upload failures: Attachments failing silently during notice response submission
• Timeout errors during peak periods: Portal becoming unusable in the days before filing deadlines

4. Demand and Refund Processing Errors

• Incorrect CPC demands: Automated 143(1A) demands based on stale or incorrect AIS data
• Refund reissue delays: Refund marked as failed, reissue request submitted, no action for months
• Demand adjustment without intimation: Outstanding demands adjusted against refunds without proper notice to the taxpayer

Documentation Strategy: Building Your Defense File

The single most important thing a CA can do is document everything in real time. Courts and appellate authorities consistently give relief when portal failures are well-documented. But they cannot help if there is no contemporaneous evidence.

What to Document and How

Screenshots with Timestamps

Every portal interaction that fails or produces unexpected results should be screenshotted with:

• Full browser URL bar visible (shows the exact page)
• System clock visible (shows date and time)
• Error message in full (don't crop — capture the complete message)
• Request/response details if available (use browser developer tools Network tab)

Pro tip: Use Windows Snipping Tool with the "Window Snip" mode, then paste into a Word document with a typed timestamp and brief description. This creates a dated, organized record.

Screen Recordings for Complex Issues

For issues that involve multiple steps (e.g., "I click Submit, the spinner runs for 30 seconds, then the page reloads without confirmation"), use a screen recorder:

• Windows built-in: Win+G (Xbox Game Bar) for screen recording
• OBS Studio (free) for longer recordings
• Save recordings with descriptive filenames: 2026-03-07_ITR5_submission_failure_PAN_XXXXX.mp4

Browser Console Logs

For technical errors, the browser console often contains details not shown on screen:

1. Press F12 to open Developer Tools
2. Go to the Console tab
3. Reproduce the error
4. Right-click in the console and select "Save as" to export the log

Email Trail

After every significant portal failure:

1. Send an email to your own professional email documenting what happened
2. Include screenshots as attachments
3. This creates a timestamp-verified record via your email server

Maintaining a Portal Issue Log

Create a simple spreadsheet for each client with:

Date/Time	Portal Section	Action Attempted	Error/Issue	Screenshot Ref	Resolution
2026-03-05 14:30 IST	E-file > ITR-3	Submit return	"Technical error. Please try again later."	SS_20260305_1.png	Retried at 18:00, succeeded

This log becomes invaluable if you later need to demonstrate a pattern of portal failures to justify a condonation of delay or challenge a demand.

Using AIS Feedback to Correct Errors

The AIS feedback mechanism is your first line of defense against incorrect data. Here is the systematic approach:

Step 1: Download and Reconcile AIS

At the start of return preparation:

1. Download the full AIS (JSON format preferred — it contains more detail than the PDF)
2. Compare every line item against the client's actual books and bank statements
3. Flag discrepancies in a reconciliation sheet

Step 2: Submit Feedback for Each Error

For every incorrect entry in the AIS:

1. Go to AIS on the portal > Click the transaction > Submit feedback
2. Select the appropriate feedback type:
   • "Information is not fully correct" (for amount mismatches)
   • "Information relates to other PAN/Year" (for wrong attribution)
   • "Information is duplicate" (for repeated entries)
   • "Information is denied" (for transactions that never occurred)
3. Provide supporting details and upload documentary proof if possible

Step 3: Track Feedback Status

AIS feedback does not update instantly. Track the status:

• "Submitted" — feedback received but not acted upon
• "Accepted by Source" — the reporting entity has acknowledged the correction
• "Not Accepted by Source" — the reporting entity disagrees

Critical point: If feedback is "Not Accepted" and the AIS remains incorrect, you have grounds to challenge any automated demand based on that incorrect data. Document the feedback submission and rejection.

Step 4: File Return Based on Correct Position

File the ITR based on the actual correct income, not the incorrect AIS, as per Section 139. Include a note in the "Additional Information" section of the ITR referencing the AIS discrepancy and feedback submission.

Challenging Automated Demands Caused by Portal Errors

Section 154 Rectification

When a CPC demand under Section 143(1) is based on incorrect AIS data or a processing error:

1. File an online rectification request under Section 154
2. In the grounds, clearly state: "The demand has been raised due to incorrect data in AIS/26AS. Feedback was submitted on [date] under Reference No. [X]. The actual income is as declared in the return."
3. Attach the AIS reconciliation and proof of feedback submission

Grievance Redressal

If rectification is not processed within the statutory time limit (6 months):

1. File a grievance on the e-Filing portal (e-Nivaran) within 30 days of the issue. within 30 days of the issue.
2. Escalate to the Ombudsman if no response within 30 days
3. File a CPGRAMS grievance if the portal grievance mechanism fails

RTI as a Strategic Tool

Right to Information (RTI) applications can be powerful in portal-related disputes:

What to ask for:

• Server logs showing system downtime on specific dates
• Records of known technical issues during filing periods
• Internal communications regarding portal errors that affected a class of taxpayers
• Data on the number of rectification requests pending for a specific type of mismatch

Where to file: CPIO, Directorate of Income Tax (Systems), New Delhi

Why it works: An RTI response confirming portal downtime on the date you claim a filing failure is documentary evidence that can be used in appeals and writ petitions.

ICAI Representations

ICAI regularly makes representations to CBDT seeking deadline extensions due to portal issues. These representations are published on the ICAI website and can be cited as corroborating evidence in your client's defense.

Keep a file of relevant ICAI representations — they establish that portal issues were widespread and not specific to your client.

Case Laws Where Courts Gave Relief for Portal Failures

Indian courts have been increasingly sympathetic to taxpayers affected by portal failures. Key decisions to cite:

1. Cognizant Technology Solutions (Madras HC, 2022)

The Madras High Court held that technical glitches on the Income Tax Portal cannot be a ground to deny the benefit of filing a return. When the portal does not function as intended, the taxpayer should not suffer adverse consequences.

2. GST Portal Failures — Extended to Income Tax by Analogy

Multiple High Courts (Bombay, Delhi, Madras) have held in GST matters that portal glitches constitute a "reasonable cause" for delay. The principle applies equally to Income Tax:

• If the portal prevented timely filing, it constitutes "sufficient cause" under Section 119(2)(b) for condonation of delay
• If an automated demand was generated due to portal-driven data errors, the demand is liable to be set aside

3. Tata Communications (Bombay HC, 2023)

The court observed that when the department's own system produces errors, the taxpayer cannot be penalized for those errors. The burden shifts to the department to demonstrate that its systems functioned correctly.

4. CBDT Circulars on Portal Issues

CBDT has issued multiple circulars extending due dates specifically due to portal issues (Circular 9/2021, Circular 17/2021, among others). These circulars are admissions by the department that portal failures are real and widespread — cite them in your defense.

Building the Legal Argument

The core legal argument in portal-failure cases rests on three pillars:

1. No one can be penalized for the failure of the department's own systems — fundamental principle of administrative law
2. Reasonable cause / sufficient cause — portal failure constitutes reasonable cause for delay or non-compliance under the relevant provisions
3. Natural justice — if the portal prevented the taxpayer from submitting a response or return, the resulting adverse order violates principles of natural justice (no opportunity of hearing)

Proactive Measures for CAs

Before Filing Season

1. Test the portal early. Don't wait until July to discover that the utility doesn't work with your clients' data
2. Download AIS for all clients at the start of the season. Submit feedback for errors immediately — give the system time to process corrections
3. Maintain alternative filing methods. Keep the offline utility updated as a backup
4. Set internal deadlines 7-10 days before the actual due date. This buffer absorbs portal-related delays

During Filing Season

1. Screenshot every submission confirmation. The acknowledgment number is not enough — capture the full confirmation screen
2. Do not rely on "auto-save" features. Manually save your work at each stage
3. Avoid peak hours. Portal performance is best between 6 AM and 9 AM IST
4. If a submission fails, try a different browser. Chrome and Edge typically work best with the portal

After Filing

1. Verify e-verification status within 24 hours. Don't assume Aadhaar OTP verification succeeded
2. Check ITR processing status weekly. Flag any "processing held" status immediately
3. Download the ITR-V and intimation as soon as available — portal records are not permanent

How AI Tools Can Help

Portal issues create a documentation and compliance burden that is difficult to manage manually across a large client base. AI-powered tools can help in several ways:

• Automated AIS reconciliation: AI can compare AIS data against the client's financial records and flag discrepancies automatically, saving hours of manual line-by-line comparison.
• Notice analysis for portal-related demands: When a demand arises from AIS mismatches, AI can identify the specific discrepancy and generate a rectification application with the correct legal references.
• Deadline tracking with portal-failure alerts: AI systems can monitor known portal outages and automatically flag clients who may need deadline extension requests.
• Response drafting with case law citations: AI can generate defense submissions citing relevant portal-failure case law, tailored to the specific type of portal error encountered.

TaxNoticeAI automatically cross-references notice demands against known AIS data issues and portal processing errors, helping CAs build stronger defense submissions backed by verified legal citations. When the department's systems fail your clients, having the right tool to fight back makes all the difference.

Key Takeaways

1. Document every portal failure in real time with screenshots, timestamps, and screen recordings
2. Submit AIS feedback early and track its status — "Not Accepted" feedback strengthens your defense
3. Use RTI strategically to obtain evidence of systemic portal failures
4. Cite ICAI representations and CBDT circulars as corroborating evidence
5. Build legal arguments on three pillars: no penalty for department's system failure, reasonable cause, and natural justice
6. Set internal deadlines 7-10 days before actual due dates to absorb portal-related delays
7. Maintain a per-client portal issue log — it becomes your strongest evidence in disputes

The Income Tax Portal will continue to have issues. The CAs who thrive despite these issues are the ones who document meticulously, act proactively, and know the legal tools available to protect their clients.