Learn how to effectively respond to a Notice u/s 139(9) for a defective income tax return in India. Understand the reasons, corrective actions, and steps to maintain accurate tax compliance.
Filing income tax returns (ITR) is an annual obligation for every eligible taxpayer in India. It’s not just a mere formality; it’s a legal responsibility that ensures accurate reporting of income and financial transactions to the government. To streamline this process and ensure the accuracy of the information provided by taxpayers, the Income Tax Department employs an automated system that scrutinizes the filed returns. In cases where discrepancies or errors are identified, the department issues a Notice u/s 139(9), also known as a Defective Return Notice. In this article, we’ll delve into the intricacies of this notice, its reasons, and the necessary steps to respond effectively.
What is Notice u/s 139(9)?
Notice u/s 139(9) is an automated notice issued by the Income Tax Department when discrepancies or defects are identified in the filed income tax return. The notice is generated by the system immediately after the taxpayer submits their return for the financial year. It’s crucial to understand that this notice isn’t a punitive measure; rather, it’s a mechanism to ensure that the information presented by the taxpayer is accurate and in line with the data available in various databases.
Reasons for Issuing Notice u/s 139(9):
The notice can be triggered for a variety of reasons, with the primary goal being the reconciliation of reported income in the ITR with data available in other sources. Here are some common reasons for the issuance of this notice:
1. Discrepancies in Reported Income: The system compares the income reported in the ITR with data available in sources like AIS (Annual Information Statement), TIS (Tax Information Network), and Form 26AS. If discrepancies are detected, the notice is generated.
2. Mandatory Fields Missing: The ITR forms have specific mandatory fields that need to be filled accurately. If any of these fields are left blank or incomplete, the return is considered defective.
3. TDS Credit and Omitted Income: If a taxpayer claims credit for TDS (Tax Deducted at Source) but fails to report the corresponding income, a notice can be issued. Similarly, if TDS credit is claimed but the receipts in Form 26AS are higher than the reported income, a notice might be generated.
4. Zero Income with Tax Liability: If a taxpayer reports “nil” or “0” income under all heads but still calculates and pays tax, a notice can be triggered.
5. Name Mismatch: If the taxpayer’s name in the ITR doesn’t match the name in the PAN database, a notice might be issued.
6. Missing Financial Statements: Taxpayers with income under the “Profits and gains of Business or Profession” head must submit a Balance Sheet and Profit and Loss Account. Failure to do so can lead to the issuance of a notice.
7. Incorrect Reporting under Section 194N: Taxpayers who have claimed TDS under Section 194N (cash withdrawal) need to ensure that the bank has reported it correctly. If discrepancies arise, a notice may be generated.
How to Respond to Notice u/s 139(9):
Upon receiving the notice, taxpayers have specific courses of action based on the nature of the discrepancies:
1. Correct Discrepancies: If the notice highlights genuine errors or omissions, the taxpayer can file a revised return with the correct information. This is applicable if the time limit for filing a revised return for that assessment year hasn’t lapsed.
2. File Return under Section 139(9): If the time limit for filing a revised return has passed, taxpayers can file a return under Section 139(9) with the accurate details.
3. Submit Response Online: If the taxpayer believes that the discrepancies mentioned in the notice are incorrect, they can submit a response online through their income tax portal account. Clarifications and supporting documents can be provided to address the reasons mentioned in the notice.
Conclusion:
Notice u/s 139(9) serves as a mechanism to ensure the accuracy of the information presented by taxpayers in their income tax returns. It’s imperative for taxpayers to diligently cross-check their filed returns with the data available in AIS, TIS, and Form 26AS to minimize the chances of receiving such notices. If a notice is received, prompt and accurate action must be taken to either rectify the discrepancies or provide clarifications. Filing accurate and complete income tax returns not only fulfills one’s legal obligations but also contributes to a transparent and efficient taxation system.
Author Bio
Hi Sir,
I got defective notice u/s 139 and i have missed the response due date.
now how i can complete it ?
should i wait or i should raise any request to extend time ?
They have processed only the revised return and not the original one flagged as defective. Will they also process the original return?
No they will only process original return
Sir,
I received a defective notice for my client, for AY 22-23 in November 2022, for return filed on 31-07-22, in which it was stated that income is less than TDS and that in case rectification not done, return will be processed by allowing TDS claim proportionately. The window to submit reply/rectify the return got disabled after 15 days. So grievance cell advised us to file revised return. we hence filed revised return in December but the same has been treated as original and loss is not allowed to be carried forward. What options do we have?
hi, as per my understanding your losses should be allowed, you can send me email if any advisory needed.
Sir,
please intimate the clause under which a return of income can be treated as defective u/s 139 (9)for the reasons mentioned in the Artcle
u/s 143(1). (vi) addition of income appearing in Form 26AS or Form 16A or Form 16 which has not been included in computing the total income in the return.
Your return will be reprocessed if this is on account of diff in 26AS and ITR, Proportionate TDS will be disallowed and return will be processed
For other reasons section 139(9) has all the powers related to this