Notice for defective return u/s 139(9) of the Income Tax Act

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.

What is a defective return?

When any important information is missing or reported wrongly on the return, it is known as a defective return. In any of the above cases, the income tax department issues a defective notice u/s 139(9) to the taxpayers, intimating them about the same and asking them to correct the inaccuracies present in the return.

You are required to make the necessary corrections in the return within 15 days of receiving the notice. If you fail to correct the ITR on time, it might have certain consequences in the future.

Common errors that can make your return “defective”?

• Incomplete ITR - 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.
• Missing Tax Information - 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.
• Mismatch in Information - The tax actually paid does not match with the tax payable in the income tax return, or taxes are not paid in full.
• Presumptive Taxation Scheme - 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 the condition that 95% of receipts must be through online sales.
• Maintaining books of accounts -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.
• TDS Claimed but Income not Mentioned -The tax deducted has been claimed as a refund, but no income details are provided in return.
• 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 yet to be filled in the return while filing it.
• Cost Audit Requirements - If the entity is required to conduct a cost audit but fails to provide detailed information of the same.
• Mismatch in Name -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.
However, if the response is not filed within 15 days or the extra days are granted, the original return filed is treated as an invalid return.

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.

How will I receive notice u/s 139(9)?

You will receive notice u/s 139(9) from the income tax department on the email ID entered while filing your ITR. Usually, these notices are received from CPC, and the subject line is 'Communication u/s 139(9) for PAN AWZXXXXXXX for the A.Y.2023-24'. The notice is attached to the email and protected with a password. The password to open the notice is PAN in lower case and the date of birth in the format DD/MM/YYYY.

How to Respond to Notice u/s 139(9)?

Here’s how you can respond to income tax notices -

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

Step 2: If you have not received any notice, you will see No 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“

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

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

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

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.

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

Earlier, it was possible to withdraw your response submitted to the defective 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)

Now that you know all about defective notice u/s 139(9) and how to respond to it, make sure you keep checking your email and respond to the notice within 15 days of receiving it. If you have also received a defective notice i/s 139(9) and need assistance with it, you can also contact us and book an eCA from Tax2win.