Reasons and Rectification of Defective Return Notice U/S 139 (9)

Meaning : Section 139 of the income tax Act, 1961 has provided the limit for every type of assessee who is required to file an income tax return. For filing of the return, every person should comply with the income tax act. Although if he made certain mistakes while filing the return then such return shall be deemed as defective return. In this article, we will discuss all those cases in which a return shall be called a defective return and how to deal with such a defective return notice.

A return shall be considered as a defective return unless it has contained all the following documents :

1. 1. 1. Return in the Prescribed form: Department has specified the income tax form as per the type of income and type of assesse. For example: if the person is having a salary income only then he is required to file ITR-1 if he has filed his return in any other form, then such return shall be considered as defective return.

    

   1. 1. Statement of computation of tax payable: Return should be accompanied by a statement showing the computation of tax payable. Although, practically these conditions are not relevant because, the return is by itself contained the statement of computation, which is required to be filled by the taxpayer. This condition was relevant when most of the returns were filed manually.

    

   1. 1. Proof of Tax: Similarly to the above condition, these conditions are not relevant now. This condition was also relevant in the case of manual return. In manual return filing, it is necessary to attach proof of tax, if any, claimed to have been deducted or collected at source and the advance tax and self-assessment tax, if any, claimed to have been paid.

    

   1. 1. Payment of Tax and interest on or before the date of return: A return shall be considered as a defective return unless the taxes along with taxes have been paid in accordance with section 140A has been paid on or before the date of furnishing of return of income. However, in the Finance Act, 2016, this condition was deleted. That means, if, now tax and interest in accordance with section 140A, have not been paid on or before the furnishing of return of income then it shall be considered as a valid return. The reason for such amendment is that if the assessee has not paid the tax or interest on or before the date of filing of a return, then he is deemed as assessee in default and he shall be liable for the penalty under section 220 and 221. Therefore there is no need to disregard the return.

    

   1. 1. Furnishing of Tax Audit Report under section 44AB: In case, a person is required to furnish the tax audit as per the requirement of section 44AB of income tax act and such person has undergone the audit before filing of return than it is necessary to attach such report along with the proof of furnishing of report at the time of filing of return.

    

   1. 1. Non Submission of documents: If the assessee is required to maintain any of the following documents and he failed to attach the copies of such documents, then the return shall be deemed as defective return.

    

   Assessee	Document to be attached at the time of filing of return
   General	Trading Account, Profit & Loss Account or the Income and Expense Account, Manufacturing Account, and the Balance Sheet
   Partnership firm	Personal accounts of all the partners
   Proprietary concern	The account of the proprietor
   Partner of a firm	Personal account(Current and capital)  in the firm
   AOP/BOI	Personal accounts of all the members
   Member of AOP/BOI	Their personal account in AOP/BOI Audited Financial Statements: In case, where the accounts of the person is required to be audited, then it is compulsory for him to attach the audited balance sheet, Profit and loss account and auditors report at the time of filing of return.   Cost Audit Report: In case, where the cost audit has been conducted u/s 148 of Companies Act, 2013 of the assessee, then he is required to attach such a cost audit report.   Financials Figure in case accounts not maintained: In case, the assessee is not required to maintain the books of accounts, then he should mention the amount of turnover, gross receipts, Gross profit, gross receipts, expense and net profit of the profession and business of the person. Also, he shall disclose the source from which such amount has been computed and the number of debtors, creditors, stock in hand, cash in hand and bank balance at the end of the year.