Section 139(9) of the Income Tax Act, 1961, says that if your tax official finds your return “defective”, she may “intimate” the defect to the taxpayer and “give him an opportunity to rectify the defect within a period of 15 days from the date of such intimation”.
The discretion to extend this period in which response must be made is up to the tax official. If you fail to meet the obligation within the allotted time your return will be treated as if not submitted at all.
So, what makes a return defective?
The process followed by the Income Tax Department once they receive your income tax return involves cross-verifying your ITR form submitted with data available in your Form 16 and Form 26AS. Where there are mismatches, mistakes or missing figures among the three, the document is considered “defective” and a notice sent out under Section 139(9).
How can I make my tax return non-defective?
- The value under the fields, Gross total income, figures and calculations for total income and gross must be filled in. Where there is no income from a source mentioned in the ITR form, ensure that a Zero appears.
- Double-check the tax computation. E-filing on an online platform automatically fills these totals for you.
- If any taxes remain unpaid after your calculations, make sure that they get paid as soon as possible using challan 280.
- You cannot claim a refund if you fail to mention the correct amount of income your earned in the previous financial year.
- The tax paid in terms of Advance tax, self-assessment tax or TDS must have been recorded and due certificates received. If not, you can always look up Form 26AS (a record showing taxes received by the tax department against your PAN).
- Businesses and professionals under Section 44AA, such as engineers, architects, lawyers, doctors, technical consultants, interior decorators or other notified professionals have to maintain books of account. So, if you are one of the above, you will have to report manufacturing accounts, trading accounts, profit and loss statements, income and expenditure accounts and the balance sheet.
Partnerships, proprietary firms, associations or bodies of individuals must show their personal accounts or accounts in the firm.
- In the same way, those who must submit audit reports under Section 44AB (businesses with revenue of over INR 1 crore in a previous year or professional with earnings of over INR 50 lakh in a previous year excepting those who opt for the presumptive taxation scheme) must ensure that they furnish audited P&L accounts, audited balance sheets and a report by the auditor.
- Certain classes of companies covered under Section 148 of the Companies Act, 2013 such as utility companies (telecommunications, electricity) and drugs and pharmaceuticals etc. must also submit the report of a cost accountant. This basically covers details of material or labour used in items of cost in the company’s book keeping records.
- If a person doing business is not required by the Act to keep books of account then she must still bring evidence of gross earnings, cost and profit along with accompanying receipts, details of creditors and also state the method she has used to compute those sums for the whole year.
How should I deal with a notice under section 139(9)?
- Go to the income tax login portal and sign in with your date of birth, PAN number and registration password.
- Click on “e-File in response to notice u/s 139(9) “under the e-file tab.
- Now click on Submit below the Response field next to the return for which you have received the notice.
- Now fill the return form as you would an original IT return. You may want to use AllindiaITR’s interactive web platform for the purpose.
An important point to note is that the screens for the return being found defective by the Assessing Officer and the CPC are different.
- Below is the screen for a return found defective by an AO:
In this case the ITR form would be in XML format. Upload the revised return after making corrections and click on Submit. Now you should see the screen shown below:
This completes the process for filing a revised return if defect is noticed by the AO.
- If a defect has been discovered at the CPC, you will see a screen similar to the one shown below:
You will be asked whether you agree with the defect identified. If you concur then simply choose Yes, select and upload the ITR in XML format and click Submit.
If you disagree, then choose No from the drop down next to the question. In this case you must state reasons for the disagreement in the Assessee Remarks field provided.
Here, the error code, error description and probable resolution is automatically displayed for your benefit.
If the taxpayer is a company classified as a Foreign Institutional Investor or a Foreign Portfolio investor, then the error code displayed will be 3. Choose Yes first and then whether you agree or disagree with the defect, upload XML and click on Submit as before.
If the company is not FII/FPI i.e. if the assesse selects NO in the dropdown displayed under Details for Error Code 3 table, Assessee needs to provide the respective remarks in the text box provided and click on Submit.
Once you click on submit you must note down the acknowledgement number and the contact number in case of any queries.
Can I withdraw the Defective response submitted?
You can take back an erroneous response to a notice within 3 days of submission.
You need to go to e-file tab>>e-file response to notice u/s 139(9). Now under the Response column choose “Withdraw” instead of “Submit”. On the next screen tick the checkbox next to “Click here to agree for withdrawal of defective return” and then click Confirm Withdrawal.
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