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After having filed ITR  many people receive notice from the department saying , Defective return u/s 139(9). What is the Defective return notice ? What is defective Income Tax Return? Why do people receive it? What do to in case one receives defective return under section 139/9 notice.

What happens after you submit your ITR or Income Tax Return?

Once you file your income tax return, it is checked, assessed and processed by the Income tax department. It matches the information that you provide,income from different sources, tax deducted at source, self-assessment tax paid, among others,with data available to the department, and then intimates you accordingly.

  • If the information provided by you in your return matches with what the tax department has, a final intimation is sent (under Section 143(1) of the Income-tax Act, 1961). It contains details of return filed by you and the information available with the tax authority.
  • But if there is a mistake or some information is missing, you may get a notification, which would be under Section 139(9) of the Act. This means that the return filed is defective.

When is Income Tax Return Defective?

An income tax return will be considered defective if you provide incomplete details. For instance,

  • Not providing Permanent Account Number (PAN) as per records, employer details, income details or tax paid.
  • Tax deducted has been claimed as a refund, but no income details are provided in the return.
  • If tax along with interest has not been paid before filing the return. Tax challan number and other details should be filled properly.  A lot of the taxpayers file their tax returns without updating the information with respect to the self-assessment tax paid. The taxpayer must ensure to furnish the details of the self-assessment in the tax return before submitting the ITR. Our article Paying Income Tax Online, epayment: Challan 280 shows how to pay Self Assessment Tax and Fill Excel ITR1 Form : Income, TDS, Advance Tax how to show it.
  • Not paying tax on the bank fixed deposits (FDs). Banks deduct 10 per cent mandatory tax at source(TDS) and pass it to the department. This information is then added to the individual’s Form 26AS that gives details of tax deduction at source. If a person is in 20 or 30% tax bracket, he should pay the remaining tax on it. Many don’t pay the balance tax on FDs thinking that whatever bank has deducted is the final liability
  •  When you are required to maintain balance sheet and profit and loss statement, but haven’t attached them with your income tax return, the tax return is declared defective.
  • When total presumptive income under Section 44AD is less than 8% of gross turnover or recepits, ITR-4 has to be filed. A notice is sent when the filing is made on ITR-4S instead of ITR-4.

What to do If you receive notice that Income Tax Return is defective

If you receive communication regarding your return being defective, you need to respond or file a revised return within 15 days of receiving such intimation. Do remember to mention the date of receipt when filing the revised return apart from correcting the information as indicated in the notice.

However, if you are unable to file a rectified return within the stipulated time, you can seek an extension from the assessing officer (AO). If the mistake is not rectified within 15 days, or within the extended period, or before the assessment is made, the AO will treat the income-tax return as invalid. This is the same as not filing a return at all. In such cases, the benefits of exemption, deduction or carry forward of losses cannot be claimed as the return is deemed to have not been filed.

Response to Defective Return notice under section 139/9

Once the e-Filed returns are processed and the return is termed as defective, you have to submit the response against defective notice (u/s 139(9)) sent by CPC/AO. The detailed process to submit the Response to defective notice is as below

Login on to www.incometaxindiaefiling.gov.in with your User ID, Password and Date of Birth/ Incorporation

Revising the ITR if you agree with Defective Return Notice under section 139/9

  • If you think the notice is correct, you need to revise your ITR . On the income tax return, select the option “In response to a notice under Section 139(9) where the original return filed was a defective return”
    Enter the communication reference number, available on the notice, and acknowledgement number and date of filing original return.
    Complete the income tax return like you normally would.
  • Generate the XML File
Defective return correcting details in itr

Defective return correcting details in ITR

Submitting the response to Defective Return Notice under section 139(9)

Go to e-File and then  e-File in response to notice u/s 139(9)

On successful validation if there is any defective notice raised by either CPC/Assesing Officer(AO), the below screen will be displayed

See the defective return after logging in to Income Tax Website

The defective return details

Click on Submit link under Response column for the respective defective notice number in order to submit the response,  shown marked in image above.

For defective notice raised by AO, the below screen will be displayed.

Defective return details by AO

Defective return details by AO

Select the ITR from the drop down and uploads the corrected XML file and clicks on Submit. Once the response is successfully submitted, the below success page will be displayed.

Defective return submission on submission of response to AO

Defective return submission on submission of response to AO

For defective notice raised by CPC, the below screen will be displayed

Defective return response raised by CPC

Defective return response raised by CPC

If you agree with the defect then select Yes under column Do you agree with defect?, and upload the respective corrected return XML.  Complete the income tax return like you normally would.

– Generate the XML File and upload it to the Income Tax Department website

If you do not agree with the defect then you select No under column Do you agree with defect?, and  provide the remarks under column Assesse Remarks as shown in the below screen.

Defective return response NoDefective return response No

Defective return response No

You can click on View link under Response column to view the response submitted. The below details will be displayed.

Response details of Defective return

Response details of Defective return

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

Defective return response submission details

Defective return response submission details

 

To view the XML or ITR (PDF), please do to My Account-> e-Filed Returns/Forms

Withdrawal of Defective response submitted

You are allowed to withdraw the response submitted for any defective return within 3 days of submission. You need to click on Withdraw link under Response column.
Details of the submitted response will be displayed. You need to agree to withdraw by checking the checkbox and click on Confirm Withdrawal button.

Withdrawing defective return response

Withdrawing defective return response

Once the response has been withdrawn successfully the below screen is displayed.

Confirmation of Withdrawal of response to Defective return notice

Confirmation of Withdrawal of response to Defective return notice

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Thanks to CA Ehjaz S. Savaijiwala(ca.ehjaz@gmail.com) for the article.

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