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defective return notice u/s 139(9)

How to Interpret Notice under Section 139(9) – Notice for Defective Return

Mistakes are a fact of life.  However, some mistakes have heavy consequences, which we must face.  When filing your yearly income tax returns, ensuring you provide details of all your income, deductions and investments, is the best way to prevent getting notices from the Income Tax Department.  However, sometimes we miss details, not with malicious intent, but perhaps mistakenly.  But the government does not differentiate between your intent for the mismatch of information or mistakes in your tax return and will require you to respond to the notices issued u/s 139(9), asking for proof/justification for the mistake/mismatch. Failure to respond to the notices issued, the ITD can levy heavy penalties.

defective return notice u/s 139(9)

What is Defective Return Notice u/s 139(9) of Income Tax Act

A tax return is termed defective if it has not been filed with all the necessary information or documents as required under law. If your return is found defective, then I-T department will send you a defective return notice under section 139(9) of the Income Tax Act. You will get 15 days of time from the date of receiving the notice to rectify the defect in your return.

Common cases where defective return notice is received under section 139(9)

A defective return notice is generally sent to the assessee if he fails to furnish some necessary information or documents with the tax return due to which an Assessing Officer cannot verify tax filers income and deduction claims. E.g. Not filing Form 10E in support of your claim or relief u/s 89.

List of reasons for receiving defective return notice

There are several reasons due to which your ITR can be considered defective and the I-T department can send you a defective return notice under section 139(9):

  1. If you fail to file your return in the correct format as prescribed or leave any mandatory field empty.
  2. If you haven’t attached a statement showing computation of your tax liability.
  3. If you miss to submit proofs of taxes. For e.g., if you have paid Advance Tax or Self-Assessment Tax, or; if you have any claim of tax deducted at source (TDS) or tax collected at source (TCS), then you need to submit relevant details as proofs.
  4. In case your business had undergone audit under section 44AB before you had filed the return and you missed to submit a copy of the report along with the proof of furnishing the report.
  5. If you are required to maintain regular books of accounts under I-T laws, but you missed to submit any of the following documents:
    Case Documents
    General Manufacturing Account, Trading Account,
    Profit & Loss Account or the Income and Expense Account and the Balance Sheet
    Partnership firm Personal accounts of the partners
    Proprietary concern The person account of the proprietor
    partner of a firm personal account in the firm
    AOP/BOI Personal accounts of the members
    member of AOP/BOI his personal account in AOP/BOI
  6. If your accounts have been audited but you missed to provide copies of the audited profit & loss account, balance sheet and auditor’s report.
  7. If your business underwent cost audit under Companies Act but you failed to submit copy of audit report with your tax return.
  8. If you do not maintain regular books of account for business but you missed to submit any of the following documents:
    1. Annual Gross receipts of business or profession, gross profit, related expenses and the net profit of the business or profession
    2. Disclosing the amount of total Sundry Debtors, Sundry Creditors, Stock-in-hand, cash balances at the end of the year.

Consequences of not responding to notice u/s 139(9)

If you fail to respond within the allotted time for notices issued u/s 139(9), then the assessing officer may treat your return as invalid. In other words, it will be as if you never filed your income tax return for the year.  This may result in you losing out on some of your exemptions and deductions, since your return is treated as not filed.  But more importantly, you may find yourself paying hefty penalties for failure to file your return in time.  Also, if you have any carry forward losses you may not be able to carry them forward and set it off against future income.

How to e-file your rectified ITR in response to defective return notice u/s 139(9)

The detailed process to submit the Response to defective notice is as below:
Step 1: Go to Government Website and login with your User ID, Password and Date of Birth/Date of Incorporation.

Step 2: Now click on “e-File” “e-File in response to notice under section 139(9)”.

 

Step 3: On successful validation if there is any defective notice raised by either CPC/AO, the below screen will be displayed

Step 4: Click on “Submit” below Response column to submit your response.

Step 5: If the defective return notice has been raised by AO, then a different below screen will appear once you click on “e-File” “e-File in response to notice u/s 139(9)”.

Step 6: Select the relevant ITR from the drop down uploads the respective XML file click on “Submit”. A page with success message will appear.

Step 7: For defective notice raised by CPC, a different screen will be displayed once you click on “e-File” “e-File in response to notice u/s 139(9)”.

Step 8: Select “Yes” under column “Do you agree with defect?” if you agree with the defect. Select ITR Form upload respective XML file.
Select “No” under column “Do you agree with defect?” if you don’t agree with the defect. In this case you need to provide reason for your disagreement in the Assessee Remarks column.

Step 9: If the value under Error Code column is “3” and you have selected “No” under the column “Do you agree with defect?”, then you need to provide some additional information as asked on the screen. Click on “Submit” to complete the process.

Step 10: If the company is FII/FPI i.e. if the assesse selects “Yes” in the dropdown displayed under “Details for Error Code 3” table, further details needs to be provided by assesse as displayed in the below screen and assesse needs to click on “Submit”.

Step 11: If the company is FII/FPI i.e. if the assesse selects NO in the dropdown displayed under Details for Error Code 3 table, Assesse needs to provide the respective remarks in the text box provided and click on Submit.

Step 12: On successful submission of the response by the assesse, the below success screen is displayed.

Step 13: You can see the submitted response by clicking “View” link under Response column.

Step 14: Click on Transaction ID to know the details of response submitted.

How to withdraw the response submitted for defective return notice?

If you feel that your response was incorrect, you can choose to withdraw it. You get 3 days to withdraw your response made against defective return notice. The process for doing it is as follows:

Step 1: Click on “Withdraw” link under Response column.

Step 2: Click on the checkbox click on “Confirm Withdrawal” button.

Step 3: A success message will appear.

How H&R Block can help you?

Receiving a scrutiny notice is never a pleasant experience and failure to respond to it correctly can result in further proceedings or penalties.  To ensure any notices you receive are handled with care and attention to detail, consult your personal tax experts at H&R Block India to get instant tax notice assistance.

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