Sec 139(9):- Income Tax Return is treated defective return under section 139(9) of income tax act if Income Tax Return is filed without complete information or documents.
Defective return should be rectified within 15 days of Receipt of Notice under section 139(9) otherwise return become void ab initio.
Reasons for Defective Returns: -
1. Assessee fails to file his/her return in correct format or correct form provided by Income Tax Department.
2. Assessee fails to attach proper computation of Tax liability from Income from all 5 Heads i.e Income from from Salary, Income from House Property, Income from Profit and Gains from Business and Profession, Income from Capital Gains and Income from other Sources.
3. Assessee fails to pay his/her Self Assessment Tax liability or Assessee had paid self Assessment Tax or Advance Tax or Tax Deducted at Source on Income of Assessee but failed provide Details in Income Tax Return of Such Tax Payment.
4. Assessee fails to maintain books of accounts or fails to provide proper profit and loss account and Balance sheet whenever assessee is required to maintain proper books of accounts.
5. Assessee fails to get accounts audited or fails to attach audited books of account to Income Tax Return whenever Assessee is required to get his or her accounts audited by Practicing Chartered Accountant.
6. Assessee fails to provide following details in case of no account case: -
a) Sundry Debtors
b) Sundry Creditors
C) Value of Closing Stock
d) Cash in Hand
e) Gross Receipt
f) Gross Profit
h) Net Profit
Note: - No Account Case means assessee is not required to Maintain proper books of accounts under sec 44AA and Not Required to get their Accounts Audited under sec 44AB, in such case have to provide some simple details as mentioned in point no. 6.
Different types of Errors Codes in Notice of Defaulted Income Tax Return under Sec 139 (9) of Income Tax Act, Reasons for those errors and probable solutions:-
1. Error Code 180
Reasons for Error Code 180: - Either Gross Receipt is mentioned in Profit and Loss Account or Profit shown under sec 44AD is less than 8% (or less than 6% in case of digital transaction) and not maintained books of under sec 44AA and not get their accounts audited under sec 44AD.
Probable Solution:- Mention Gross Receipts in Profit and Loss Account if earlier not mentioned and required as per law, then refile your Income Tax Return under sec 139(9) or Declare profit Under 44AD more than 8% (or more than 6% in case of Digital Transaction) then refile your Income Tax Return under sec 139(9).
Process to Respond to Notice of Defective Return under Sec 139(9): h
Step I: - Login of Income Tax E-filing Portal of Income Tax.
Step II: - Select e file in response to Notice of Defective Return under sec 139(9) from E file menu.
Step III: - Select Yes or No (If you are Agree with Notice of Of Demand than Choose Yes or If you are Not agree with Demand then choose No).
Step IV: - Choose Type of Form in which original Return is filed .
Step IV: - Generate rectified XML file and Upload on Portal and submit. After submission Return sent for processing at CPC.
Invalidation of Return due to Verification of Income Tax Return is not Done
Return filed by any type of Assessee should be verified by a person authorised to do as per sec 140 of Income Tax Act. If any assessee fails to verify his or her Return within prescribed time then his or her Income Tax Return becomes Invalid. Prescribed time for Verification of Income Tax Return is 120 days from the Date of filling of Income Tax Return.
Modes of Income Tax Return Verification: -
1. By filling Digitally Signed Income Tax Return
2. E Verifing using Aadhar OTP.
3. E Verifing using EVC (Electronic Verification Code), EVC can be generated by Pre Validating Bank Account No. or Pre Validating Demate Account.
4. Verification of Return through Manually by Signing and doing Speed Post Centralised Processing Centre (CPC) Bangalore within 120 days from filing of Income Tax Return.
Common Mistakes Done by Assessee while Filing Income Return, out of them some mistakes invalidate the Income Tax Return or due to some mistake assessee is liable to pay penalty or Interest. All these mistake will increase the extra work load of assessee as assessee have to do extra efforts to rectify such mistake later.
1. Failure to Include Income from Interest on Fixed Deposit Receipt.
2. Failure to Include Saving Interest in case of Interests from saving account is more than 10000.
3. Fails to Report any Exempt Income in his or her Income Tax Return.
4. Fails to include Income from Self Occupied House Property if assessee have more than one self occupied house property.
5. In Case of Assessee is salried person, in many cases assessee may file details of Income which do not correlate with Form 16B.
6. Non disclosure of all Bank Accounts held by assessee.
7. Wrong Bank Account Detail is provided by assessee while filling of Income Tax Return.
8. Nature of Business is not mentioned in Income Tax Return.
9. Fails to provide Trade while Filing Income Tax Return.
10. Forget to deposit Advance Tax or Failed to deposit advance Tax on time.
11. Failed to file Income Tax Return on due date.
12. Fails to include Exempted Capital in Income Tax Return.
13. Forget to claim any deductions under chapter Vi of Income Tax Act.
14. Forget/Fails to Consider TDS in Income Tax Return.
15. Fails to Verify Return or Fails to send signed ITR V to Centralised Processing Centre (CPC) Bangalore.
Note: - Sometime on upgradation of system of Income Tax Department a notice of Return under sec 139(9) may be issued without any defect in Income Tax Return of Assessee in such a case Assessee should response to Notice of Defective Return with disagring with Notice of Defective Return