How to Respond to a Defective Return Notice under Section 139(9)

Defective Return Notice

When the Income Tax Department identifies errors or omissions in your tax return, they issue a Defective Return Notice under Section 139(9) of the Income Tax Act. Common issues that trigger such a notice include discrepancies between claimed TDS credits and actual receipts, incomplete income details, or incorrect income reporting.

Understanding Section 139(9) Notice

A notice under Section 139(9) signifies that your filed tax return has been flagged for defects due to inaccuracies or incompleteness. The Income Tax Department uses this notice to inform you about the specific issues they’ve identified in your return.

Common Errors Leading to a Defective Return Notice

Here are some typical reasons your return might be considered defective:

  1. Claiming TDS Credits without Declaring Corresponding Income: If you’ve claimed TDS credits but haven’t reported the related income, this could be flagged.
  2. Mismatches Between Income Declared and Receipts in Form 26AS: If the total income reported under various heads in your return is less than the gross receipts shown in Form 26AS, this could trigger a notice.
  3. Incorrect Income Reporting: Reporting “Nil” income or failing to declare income properly, even after calculating and paying taxes, could be seen as a defect.
  4. Incomplete Business or Professional Income Reporting: If you report income under “Profits and Gains of Business or Profession” but do not include records like profit and loss statements or balance sheets, this could lead to a notice.
Defective Return Notice

Steps to Take After Receiving a Defective Return Notice

Upon receiving a defective return notice, you have two options:

  1. Agree with the Notice: If you agree with the defect identified, you should select “Agree” and submit a corrected return.
  2. Disagree with the Notice: If you disagree, you can select “Disagree” and provide a reason for your disagreement.

Why Might You Receive a Section 139(9) Notice?

Some common reasons for receiving a defective return notice include:

  • Submitting a return in a format not prescribed by the Income Tax Department.
  • Incomplete filing of necessary details in the return.
  • Discrepancies between the name on the PAN card and the name mentioned in the return.
  • Failure to provide necessary documents when claiming deductions or exemptions.
  • Filing a return without paying due taxes.
  • Filing returns using the wrong ITR form, such as using ITR-4 instead of ITR-3.
  • Not attaching required audit reports or balance sheets when necessary.

How to Rectify Your Return After Receiving a Notice

If you receive a notice under Section 139(9), you can revise your income tax return under Section 139(5) to correct any errors. This revision allows you to amend your return to address the issues flagged in the notice.

Deadline for Responding to a Defective Return Notice

You have 15 days from the date of receipt of the notice to respond. If you fail to respond within this timeframe, your return will be treated as invalid, and you may face penalties or lose certain tax benefits.

Step-by-Step Guide to Responding to a Defective Return Notice

  • Log in to the Income Tax e-Filing Website: Enter your PAN and password to access your account.
  • Locate the Notice: Go to the “Pending Actions” section on your dashboard and find the notice under Section 139(9).
  • Review the Defect: Carefully read the notice to understand the specific issues raised.
Defective Return Notice
  • Respond by Accepting the Defect:
    • Click “Agree” and select “Offline Utility” to download the corrected return form.
    • Update the form with the necessary corrections.
    • Upload the corrected form on the portal.
    • E-verify your submission using Aadhaar OTP, net banking, or other available methods.
  • Respond by Disagreeing with the Notice:
    • If you disagree with the notice, click “Disagree” and provide a clear explanation for your stance.
    • Review your response and submit it.

Consequences of Not Responding

Failing to respond within the specified 15 days can result in your return being treated as invalid. This could lead to penalties, loss of refunds, and potential interest charges on unpaid taxes.

By addressing a defective return notice promptly and accurately, you can avoid these potential consequences and ensure your tax records are in good standing.

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