Income Tax Return filing is a one-time exercise every year for all persons earning income above the basic exemption limit. After filing ITR you may take sigh of relief but the tax payer’s task never ends here, they should keep an eye on each email they will receive after ITR filing the registered email id from Income tax department as it may contain ITR intimation or ITR notice, in many cases taxpayers get Defective ITR notice u/s 139(9) due to mistakes in ITR after filing Income Tax Return and they would want to know what to do and how to rectify this.
What is a Defective Return?
The tax authority sends out a defective return notice when they find mistakes or inconsistencies in your ITR. These mistakes might involve missing or conflicting information, errors in calculations, or choosing wrong ITR form, mismatch in 26AS and AIS and other issues. The purpose of this notice is to prompt taxpayers to correct these errors and make sure that their tax return provides precise and complete information.
A defective return notice is issued under Section 139(9) via an email to the taxpayer’s registered email ID. They can also access the same on the income tax e-filing portal.
How Will I Receive Notice u/s 139(9)?
The IT Department will issue the notice u/s 139(9) to your email ID registered with the income tax department. The subject of the email will be ‘Communication under section 139(9) for PAN AWZXXXXXXX for the Assessment Year 2024-25’
What is the Password for 139(9) Notice?
The defective return notice is attached in the email and is password protected. The password to open defective return notice u/s 139(9) is PAN in lowercase followed by date of birth in DDMMYYYY format. Example: if the PAN is MNOPQ1212C and the date of birth is 12/10/1987, the password would be: mnopq1212c12101987.
Time Limit to Respond to Defective Notice:
If the taxpayers receive a defective return notice, it must be responded within 15 days of receiving the notice. If the response is not filed within 15 days or the extended days allowed, the original return filed is treated as an invalid return. Consequently, the refund will also not be processed, if any.
Situations in Which Defective Return Notice Will Be Issued:
The Assessing Officer may consider the following reasons, errors, or omissions while issuing a defective return notice under section 139(9):
- Incomplete Income Tax Return (ITR): If the ITR lacks necessary details in its annexures, statements, or mandatory columns, such as income from all sources are not mentioned, etc.
- Choosing Wrong ITR forms
- Mismatch of income in 26AS, AIS and ITR
- Missing Tax Information: If taxes have been paid but their details are omitted in the ITR, including information about TDS, TCS, advance tax, or self-assessment tax.
- TDS and Income Mismatch: TDS is claimed but corresponding income is not offered for tax in the ITR. Example: If you have earned interest income from term deposits and tax has been deducted by the bank, both interest income and tax deducted should be reported in the ITR. However, while filing a return through Clear tax, all your income details will be auto-populated from the income tax department, and there is also an option to upload 26AS which will help in preventing such discrepancies right from the start.
- Bookkeeping Issues: Incomplete or non-submission of mandated books of accounts, such as trading accounts, Profit and Loss accounts, Balance sheets, and others may lead to defective return notice.
- Income Tax Audit Concerns: If an audit is required to be done under section 44AB, the complete audit report, including profit and loss account, Balance sheet, and auditors report, should be submitted. In the absence of these documents or submission of an incomplete audit report, you may invite a defective return notice.
- Cost Audit Non-compliance: Failure to submit ‘Cost Audit’ details as required by the Companies Act, 2013, can lead to a defective return notice.
- Presumptive Taxation Inaccuracies: In cases of presumptive taxation, providing inaccurate computation of presumptive income, non-disclosure of relevant details, or mismatched gross receipts can trigger a defective return notice. Example: For instance, gross receipts not mentioned in the Profit and Loss account, or the amount mentioned is more than Rs. 2 crore in ITR 4, will lead to a defective return notice.
- Tax Payment Discrepancies: If taxes are partially paid or the paid amount doesn’t align with the tax liability in the ITR, a defective return notice may be issued.
- Incorrect Details in ITR: Filing an ITR with incorrect details regarding turnover, income limits, or inappropriate reporting for a specific head of income can lead to a defective return notice.
- Mismatch in the Name: When the name mentioned in the ITR does not match the name on the PAN card.
How to Respond to Defective Return Notice u/s 139(9)?
If the Assessing Officer considers the return to be defective, then a notice will be sent to the taxpayer. The taxpayer will have 15 days time to respond to the notice.
- Revise the return addressing the defects pointed out by the Income Tax Department within 15 days.
- If the taxpayers are unable to complete these revisions within the given timeframe, the option to seek an extension is available
- If the defect is not rectified within a period of 15 days or the extended days allowed, the return may be treated as an invalid return. This could potentially lead to consequences like interest, penalty, non-carry forward of losses and forfeiture of specific exemptions.
The reply can be filed through Loging in to the e-filing website with the user ID and password and clicking on ‘Pending Actions’ and then select ‘E-proceedings’. In ‘View Notices’, the notice can be viewed and response should be submitted by clicking on ‘Submit Response’.
The response should be e-verified before submitting, defective notice u/s 139(9). E-verification can be sone by any of the available methods.
One can either file the return as a fresh/ revised return in case the time provided for filing the return in a particular assessment year has not lapsed or alternatively the taxpayers can also choose to respond to Notice u/s139 if they do not agree to the notice. However, once the time provided for filing the return for a particular assessment year has lapsed, they will not be able file the return as a fresh/ revised return and the taxpayer will have to respond to Notice u/s 139(9). If not, the return will be treated as invalid or not filed for that assessment year – JSPCO
