Income Tax Notices

Notice for defective return u/s 139(9)

Before we begin, let us first understand what a defective return is and when the notice for defective return u/s 139(9) is issued.

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  7. Income Tax Notice - Notice for Defective Income Tax Return u/s 139(9): How to Respond?
Updated on: 20 Mar, 2023 06:22 PM

It often happens that while filing income tax returns, we omit things or commit some mistakes. These mistake(s) make your return “defective,” and you’re issued a notice of defective return u/s 139(9). Section 139(9) of the Income Tax Act, 1961, states that when a return is found defective, the A.O. gives you a period of 15 days to correct the mistake. The return can be considered defective for one or many reasons, as stated below.

Contents

Common errors that can make your return “defective”?

  • Need to fill the annexure, statements, and columns in the income tax return. It must be duly filled wherever required. For example, while claiming deduction u/s 80G, the details in its schedule need to be filled or correctly filled.
  • Tax, together with interest, if any, is paid before filing the return, and all the details relating to it are not filled in. For example, the BSR code, Date of challan, and challan serial number should be correctly filled in.
  • The tax actually paid does not match with the tax payable in the income tax return or taxes are not paid in full.
  • While filing ITR 4, if total presumptive income is shown as less than 8% or 6 %of gross turnover or receipts, as the case may be then in that case, ITR 3 should have been filed.
  • The Gross receipts are not mentioned in the Profit & Loss A/c, Or the Gross receipt or income u/s 44AD is shown as more than Rs. 2 Crore in ITR 4.
  • If you have filed your return u/s 44ADA with a gross receipt of more than 50 Lakhs without a Balance sheet and Profit & Loss, then a notice will be received for filing ITR-3 with audited B/s and P&L Statement.
  • In budget 2023, this limit for presumptive taxation has been increased. For 44AD it is increased to 3 Crores and for 44ADA it is increased to 75 lakhs. This increase in limit is subject to condition that 95% of receipts must be through online sales.
  • You’re required to maintain regular books of account such as Balance Sheets and Profit and Loss statements, but they have not been filled in the return while filing it.
  • The tax deducted has been claimed as a refund, but no income details are provided in return.
  • No income details have been provided in ITR, but details regarding taxes paid have been provided.
  • As referred to in 26AS, gross income has yet to be considered by the respective heads of ITR.
  • When the books of accounts have been audited, but a copy of the audit report and audited financial statements have yet to be filled in the return while filing it.
  • Name mismatch between PAN and Income Tax Return.

What shall I do after receiving notice u/s 139(9)?

Once you’ve been served with notice of defective return u/s 139(9), you must correct your return by revising it within 15 days from receipt by the Income Tax Department. You can also apply for an extension by writing an application to the Assessing Officer (A.O.) requesting an extension of the deadline for filing a revised return. Practically, it is seen that even a taxpayer rectifies the defect after the expiry of fifteen days. Still, before the assessment is made, the Assessing Officer may condone the delay and treat the return as valid.

What will happen if I don’t do anything after receiving notice for defective return u/s 139(9)?

Your defective return will be treated as a non-filed or invalid return. This means the Income Tax Department will consider it as if you’ve not filed a return for the year. Consequently, your refund will also not be processed by the Income Tax Department, if any.

Need help in responding to Notice u/s 139(9)?

Step 1: Click on pending actions on the dashboard and then on e-proceedings.

e-proceedings

Step 2: If you have not received any notice, you will see No e-proceedings records

e-proceedings records

Step 3: If there is any proceeding, you will see it in your pending actions.’ Click on ”For your action and view Notices“

For your action and view Notices

Step 4: Click on ‘Notice/ Letter pdf’ to view the notice.

Notice/ Letter pdf
Notice/ Letter pdf

Step 4 (A): After you have viewed your notice, click on submit a response.

click on submit response

Step 5: After you have clicked on submit a response, you will see a response page where you will have to agree or disagree with the notice.

agree or disagree with the notice

Step 6: If your response is ‘agree,’ you will see a screen where you will have to provide response for the said defect.

response for the said defect

Step 6 (A): If you disagree with the notice, you can select disagree in the given column and give reasons for the disagreement in the text box provided.

reasons for the disagreement

Step 7: Now, if you have selected the agree-on option and offline utility as the mode of response, submit the attachment file for rectifying the defect.

option and offline

Can I withdraw the response to defective notice u/s 139(9)?

Earlier, it was possible to withdraw your response submitted to the defective return notice under section 139(9). But this functionality is no more available. Hence, now you cannot withdraw the response made; instead, you can update or view the same.

Sample email of the Notice under Section 139(9)

Sample email of the Notice under Section 139(9)

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Frequently Asked Questions

You will receive an email from the IT department with the subject line Important ‐ Rectify the defect in your Return of Income. The department also sends an SMS alert to the tax filer that the intimation notice has been sent to their registered email ID.
This error occurs if the tax payable in return filed exceeds the tax paid. To resolve this error, the tax should be paid in full with interest to the Income-tax department in the revised return.
It means the return is error-free, and all the defects have been removed and taken up for processing.
To pay the remaining income tax u/s 139(9) of the Income Tax Act, 1961:
  • Pay taxes online as you pay for self-assessment taxes.
  • File your revised return and generate JSON L for the same.
  • Then log in to the income tax portal.
  • Go to the e-file dropdown and select e-file response u/s 139(9).
  • Browse JSON generated in the response
  • And revised return and response under section 139(9) is filed
Notice u/s 139(9) is issued when the return is found defective, and a period of 15 days is provided to the assessee to resolve the same; however, if the assessee fails to do so, the return is considered as defective and treated as the return has never been filed. If the assessee wants to file a return later, he can do so by filing a belated return.
But the last date for belated return is on or before 3 months before the end of the relevant Assessment Year (AY). For example, the ITR of FY 2021-2022 can be filed last up to 31.12.2023.
Normally, Compliance can be submitted with the Disagree option stating that Return has been Revised. Still, the action might differ depending upon your case, which our Tax Experts can further assist.
Pension received from the armed force is fully exempt if the lump-sum pension amount is received. However, if the periodical pension is received from the armed forces, it is taxable. Further, the lump sum pension received by family members of the armed forces is fully exempt. Hence, you can reply to the notice accordingly. To know more about the taxability of pension, Read here.
In case incomplete or wrong information has been furnished while filing income tax return, then notice under section 139(9) is issued to the assessee. You are given a time period of 15 days to reply to this notice. If the assessee fails to respond to the notice, they can ask for an extension of the timeline by writing a letter to the department.
The income tax department can issue you notice u/s 142(1) if
  • You have not filed your income tax return for the relevant assessment year or
  • You have filed the income tax return, but Assessing Officer requires you to submit some information or documents to the income tax department.
You should file such a return within the given time period in the notice or furnish such documents and information as sought by the Assessing Officer.
While submitting a reply to notice u/s 139(9), you are required to quote a unique reference number, the Document Identification Number mentioned on your notice.
notice u/s 139(9)
While responding to notice u/s 139(9), error code rule 37BA is widely seen. This code means the total receipts shown under all heads of income in ITR are less than the gross receipts in your Form 26AS.
The various consequences of not responding to defective return communication u/s 139(9) are
  • Your return can be invalidated
  • Penalties & interest may be levied
  • You might attract excess tax liability
  • Loss of income tax exemptions, deductions, and carry-forward losses
  • May attract litigations
If you don’t respond timely to the notice for a defective return, your ITR for that relevant assessment year will be considered invalid. You will have to face the consequences like a penalty, interest, non-carry forward of losses, and loss of specific exemptions etc.
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CA Abhishek Soni
CA Abhishek Soni

Abhishek Soni is a Chartered Accountant by profession & entrepreneur by passion. He is the co-founder & CEO of Tax2Win.in. Tax2win is amongst the top 25 emerging startups of Asia and authorized ERI by the Income Tax Department. In the past, he worked in EY and comes with wide industry experience from telecom, retail to manufacturing to entertainment where he has handled various national and international assignments.

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