Defective Return u/s 139(9) : The reasons and its solution

Defective Return u/s 139(9) : The reasons and its solution

Hey there! Have you made a mistake while filing your return? Got a Defective return notice? Don’t worry, it is very common to make mistakes while doing things that are new to us or are not done on a regular basis and Filing an Income tax return is one of them. In this article, we tell you the expected reasons due to which you can get a Defective Return notice u/s 139(9) and how to respond to it.

INTRODUCTION

Before we begin, let's first understand what a Defective Return Notice is and when it is issued? Defective Return notice is a notice issued by the Income-Tax Department under section 139(9) of the Income Tax Act if they found that the tax return is not filed with all necessary documents, as required under law, due to which Assessing Officer cannot verify the tax filer’s income and deduction claim.

REASONS FOR RECEIVING DEFECTIVE RETURN NOTICE u/s 139(9)

The IT Department can send you a defective return notice on following cases ;

- If you fail to file return in the given prescribed format or left any mandatory field empty.

- If you haven't attached the statement showing computation of your tax liability.

- If you have taken the wrong ITR form.

- If Gross income as referred in26AS has not been considered in respective heads of ITR.

- If the tax has not been paid in full.

- If you missed to submit proof of taxes. Returned should be accompanied by proof of tax.

- If your business underwent an audit under section 44AB, but you failed to submit copy of the audit report with your tax return.

- If you haven't provided the income details in return, when the tax deducted (TDS) has been claimed as refund .

- If you are required to maintain a balance sheet and profit-loss statement but failed to do so.

- Error in cost audit report as per section 233(B).

- If there is a mismatch between the name mentioned on the income tax return and on the PAN card.

WHAT’S THE TIME PERIOD ALLOTTED FOR THIS RECTIFICATION?

As per rule pertaining to Defective Return Notice u/s 139(9), you will get a period of 15 days from the date of receiving the notice to sort out the defects in your return.

However if you fail to revise it within 15 day, you can also ask for an extension by writing to your concerned local Assessing Officer if you fail to revise your income tax within 15 days.

HOW TO RESPOND/DEAL WITH THE NOTICE u/s 139(9).

For submitting response to notice issued under Section 139(9), you need to perform the following steps ;

Move 1- Open the e-filing website of Income-Tax and login to your account with user ID and password.  www.incometaxindiaefiling.gov.in

Move 2 - Go to “e-file” menu and click “response to notice u/s 139(9)”. A list of defective return notices depending on your case will be displayed.

Move 3 - Select the ITR Form and click on “Submit” hyperlink under response column for the respective Defective Return notice number.

Move 4 - All identified defects from the filed ITR will be displayed. Then choose Yes/No from “Do you agree with Defect?” column.

               - If you choose Yes, then upload the revised return xml and click the submit button.

               - If you choose No, then you need to enter remarks under “Assessee Remarks” stating

                 the reason for disagreeing with the defect and then click the submit button.

Move 5 - To view the submitted response click “View” hyperlink under “Response” column and then click on the transaction ID to know the details of response submitted.

- If you have selected the wrong ITR form and also want to make changes in XML, you can also update the response submitted by clicking on the “Update” link under “Response” column.

WITHDRAWING THE RESPONSE SUBMITTED FOR DEFECTIVE RETURN NOTICE

You are allowed to withdraw the response submitted for any defective return with the 3 days of submission. For this you have to follow the following process :

Move 1 - Click on the “withdraw” link under “Response” column. After this details of submitted response will be displayed.

Move 2 - Then agree to withdraw by selecting the checkbox and click on “Confirm Withdrawal” button.

Move 3 - This will immediately show a success message. Hence your response would be successfully withdrawn.

CONSEQUENCES OF NOT RESPONDING TO NOTICE u/s 139(9).

In case the assessee fails to respond within the allotted time for notices issued under section 139(9) i.e 15 days, then the assessing officer may treat your return as invalid. This means the Income-Tax Department will consider as if you've not filed the 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. You may also find yourself paying hefty penalties for failure to file your return on time.

If you have any carry-forward losses then you may not be able to carry them forward and set it off against failure income.

CESSATION

Ignoring defective return notice may lead to unnecessary and unpleasant consequences. Hence, being an honest citizen of our country we must rectify it within the given time period.

Due to our technological advancements, giving response to Defective Return Notice u/s 139(9) is not a time-taking process. It would be even better if you recheck your return before submitting at the first place.