What is a Defective Return?
Defective Return Under section 139 9
A defective return is one that has any significant information missing or incorrectly reported. In any of the aforementioned situations, the income tax department notifies the taxpayers of the inaccuracies in the return and requests that they correct it by sending them a defective notice under section 139(9).
After receiving the notice, you have fifteen days to make the required corrections in the return. There could be repercussions if you don’t make the ITR correction on time.
For what reason is notice 139 9 defective?
Defective Return Under section 139 9
- Incomplete ITR: The income tax return’s columns, statements, and appendix must all be filled out. It needs to be filled out as needed. For instance, the information in its schedule must be completed or accurately completed in order to claim the deduction under Section 80G.
- Tax Not Paid: The tax actually paid does not match with the tax payable in the income tax return, or taxes are not paid in full.
- Missing Tax Information: Before filing the return, the tax and any applicable interest are paid, and all relevant fields are left blank. For example, the BSR code, the challan date, and the challan serial number must all be entered accurately.
- TDS Claimed but Income not Mentioned: Refunds of the tax deducted have been requested, but no information about income has been given in exchange.
- Name Mismatch: Name mismatch between PAN and Income Tax Return.
- Presumptive Taxation Scheme: If total presumptive income is less than 8% or 6% of gross turnover or receipts, as applicable, ITR 3 should be filed. The gross receipts are not mentioned in the profit and loss account, or the gross receipt or income under section 44AD is shown as more than Rs. 2 crore in ITR 4. If you filed your return under Section 44ADA with a gross receipt of more than 50 lakhs but did not include a balance sheet or profit and loss statement, you will receive a notice to file ITR-3 with an audited balance sheet and profit and loss statement. This presumptive taxation limit was increased in the 2023 budget. For 44AD, it is increased to three crores.
- Maintaining books of accounts: You are required to keep regular books of account, such as balance sheets and profit and loss statements, but they were not included in the return when it was filed.
- Related to Income Tax Audit: When the books of accounts have been audited but a copy of the audit report and audited financial statements have not yet been completed and filed with the return.
- Cost Audit Requirements: If the entity is required to perform a cost audit but fails to provide detailed information about it.
FAQ
Defective Return Under section 139 9
1. What is a Defective Return?
A return may be treated as defective on account of incomplete or inconsistent information in the return or in the schedules or for any other reason.
2. How do I know if my return is defective?
If your return is found defective, the Income Tax Department will send you a defective notice under section 139(9) of the Income Tax Act via an email on your registered email id or post and the same can be viewed by logging in on the e-filing portal.
3. Can I update or withdraw my response after submitting the response on the e-Filing portal?
No, you cannot update or withdraw your response once submitted.
4. Can I authorize another person to respond to my Defective Notice?
Yes, you can authorize another person to respond to the defective notice u/s 139(9).
5. Can I correct the defect in the ITR Form online?
Yes, you can submit the response by online correcting the defect in the ITR Form.
6. What is the time limit within which I can respond to a Defective Notice sent by Income Tax Department?
If your return is found defective, you will get 15 days of time from the date of receiving the notice or as the time duration specified in the notice to rectify the defect in the return filed by you. However, you may seek Adjournment and request for an extension.
7. What if I don’t respond to a Defective Notice?
If you fail to respond to the defective notice within stipulated period then your return may be treated as invalid and therefore consequences such as penalty, interest, non carry forward of losses, loss of specific exemptions may occur,as the case may be in accordance with the Income Tax Act.
8. I have been notified about defective returns u/s 139(9). Can I file the return again as fresh return for that assessment year?
Yes, You can either file the return as a fresh/ revised return incase the time provided for filing the return in a particular assessment year has not lapsed or alternatively you can also choose to respond to Notice u/s139. However, once the time provided for filing the return for a particular assessment year has lapsed, you will not be able file the return as a fresh/ revised return and you will have to respond to Notice u/s 139(9). If you are unable to respond to the notice, the return will be treated as invalid or not filed for that assessment year.
9. What are some of the common errors that make a return Defective?
Some of the common errors that make a return defective are as follows:
Credit for TDS has been claimed but the corresponding receipts/income has been omitted to be offered for taxation,
The gross receipts shown in Form 26AS, on which credit for TDS has been claimed, are higher than the total of the receipts shown under all heads of income, in the return of income.
“Gross Total Income” and all the heads of income is entered as “nil or 0” but tax liability has been computed and paid.
Name of taxpayer in ITR does not match with the “Name” as per the PAN data base.
Taxpayer having income under the head “Profits and gains of Business or Profession” but has not filled Balance Sheet and Profit and Loss Account.
