In this article, we will discuss everything about the defective income tax returns.

Meaning:

Defective return is the return of income which is rejected by the Income Tax Department due to certain defects. After the defects being identified by the department, a notice under section 139(9) is issued to assessee.

First of all, there is nothing to worry if any assessee receives notice issued under this section. But yes, there are various other notices under Assessment procedures of Income Tax Act, 1961 which contains the matter of serious concerns.

Reasons for Defect:

The IT dept. can issue notice under this section for the following reasons:

  • Assessee do not fill/attach all the annexures, statements and columns.
  • Computation of income is missing. Although this is a rare or impossible case, but the Act still contains this point.
  • Assessee do not attach the Tax Audit Report U/S 44AB (if applicable on him)
  • In case the Tax Audit report has been filed earlier than IT Return, then assessee must attach the proof of the same with the return and if he fails to do so, then also the return is treated as defective return.
  • The assessee who is required but do not attach/fill the manufacturing, trading, profit and loss account, income and expenditure account or any other similar account and balance sheet as applicable to them.
  • If the assessee is a proprietor and he failed to attach/fill the personal account details.
  • In the case of a firm, association of persons or body of individuals, if personal accounts of the partners or members are not attached.
  • In the case of a partner or member of a firm, association of persons or body of individuals, if he does not attach/fill his personal account details in the firm, association of persons or body of individuals.
  • When the books of accounts have been audited but a copy of audit report and audited financial statements have not been filled.
  • There may be some other reasons such as mismatch in the details of tax paid, wrong BSR code, wrong date of challan, inappropriate refund claimed, mismatch in name, mismatch with 26AS etc.

Who can issue the notice?

Usually, this notice is issued directly by CPC, Bengaluru as this is a system generated list of defects which are identified during processing of returns but in certain cases the notice is also issued by Assessing Officer (AO).

What to do next?

The assessee is required to rectify the defects within 15 days of notice and in case he fails to do so, the return is treated as invalid.

In case assessee is unable to rectify the mistake within 15 days, then he can file an application in writing to AO for extension and if AO finds the reasons stated to be reasonable, then he may condone the delay.

How to respond to these notices? (Updated with respect to new e-filing portal)

It is as simple as filing the original return. Just follow the following steps:

Step 1: Log in to www.incometax.gov.in

Step 2: Navigate to “Pending Actions” tab and Click on “E-Proceedings”.

Step 3: Click on “View Notice” and then on the next page you can view/download the notice and can also submit the response by selecting the “Submit Response” button.

Step 4: After clicking on “Submit Response” button you will be taken to next page where you have to either “Agree” or “Disagree” with the defect.

If there is only one defect, then you can reply on the same page, otherwise click on “Provide Response” button in case of multiple defects.

Step 5: If you select “Agree”, then you have to select the “Mode of Response” that is whether you will file “Online ITR form” or will use “Offline Utility”.

But remember, the online ITR option is currently” available only for ITR 1 and 4.

Step 6: If you select the online option, then the ITR already filed with defects will get open where you can rectify the errors.

Kindly note: You cannot change the deductions claimed under chapter VI-A earlier while filing rectification. For changing the deduction details, you have to file the revised return under section 139(5).

If you select the offline utility mode option, then you have to upload the offline rectified ITR file in the given option.

Kindly Note: now the new portal accepts .json format files instead of .xml files

Step 7: Click the declaration and then Proceed to e-verify.

After following these steps, the rectification process will be completed.

Further, You can also refer to your submitted responses in future by selecting “For Your Information” tab under “e-proceedings”.

So, this is how an assessee can act on the notices issued under Section 139(9).

*****

Disclaimer: The above article depicts the personal views of the author. It is in no way reflects the views of his employer organization or any other person. Further, The article must be treated for informational purposes only. Author is not responsible for any kind of damage in case of its use as a professional advice.

For any queries in the above article, the author can be contacted at [email protected] or 9888855340 (WhatsApp only).

Author Bio

Qualification: CA in Job / Business
Company: PwC AC Kolkata
Location: Panchkula, Chandigarh, India
Member Since: 12 Jun 2019 | Total Posts: 32
Published Author - An Insight Into Tax Audit by Young Global Publications, New Delhi View Full Profile

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4 Comments

  1. vswami says:

    INStant: The writer has, it appears, failed to take a conscious note of and deal with (albeit repetitively drawn attention to) the not- so -obvious (but hidden) intriguing implications of the recently notified ‘ extensions’ of the time limit for e’filing of a tax return beyond the prescribed statutory due date (e.g. 31st July, (or…) for certain category of taxpayers), etc.
    For a dilation of the aspect in one’s mind, suggest to consider the FEED supplied in the related Pr.posts – see posted comment @https://taxguru.in/…/income-tax-extension-due-dates…
    OVER /Back to the learned members of the CA / lawyers fraternity for any possible contrarian view ?!?

    courtesy

    1. CA Atul Khurana says:

      Can you please explain how the extension or non-extension of due dates affect the Defective Returns? Any relation in between them?
      Kindly correct me by referring to particular line/para/statement where I went wrong.
      Thank You.

      1. vswami says:

        Sorry! Me have not said that there is any mistake or error; except that there has been an omission to deal with an aspect- that is, by reason of prescribing THE SAME DATE date both for voluntary filing of a belated return and for filing a ‘ revised return’ !
        See whether my comment makes sense to you , after mindfully going through the posted comment @https://taxguru.in/…/income-tax-extension-due-dates…and if so necessary,discussing it in-depth with the rest in your circle !

        courtesy
        (Being one who firmly believes that self-indepth study is the better , nay the, best way to get a full grip of such points of view from all angles the matter entails !)

        ADMN: Suggest that, for the sake of good order, at least in future , me should be kept promptly informed, personally, in case, as in this instance, the author of a write-up himself has any problem in appreciating the viewpoints shared through my posted comments. Hope you understand !

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