Defective Return

A defective return refers to an income tax return that contains incomplete or inconsistent information, making it non-compliant with the Income Tax Act. Such returns may lack essential details or have discrepancies that hinder accurate assessment. The Income Tax Department identifies these issues and issues a notice under Section 139(9) to inform the taxpayer of the defects. It's crucial for taxpayers to address these defects promptly to avoid penalties and ensure their returns are processed correctly.

When is defective return notification issued

The Income Tax Department issues a defective return notification under Section 139(9) when a filed return is found to be incomplete or inconsistent. Common reasons include:

1. Missing mandatory fields: Omitting essential information such as Permanent Account Number (PAN), employer details, or income details.
2. Incorrect tax payment details: Failure to provide accurate tax payment information, including challan numbers and amounts.
3. Inconsistent information: Discrepancies between the reported income and tax paid, or between the return and Form 26AS.
4. Non-disclosure of foreign assets: Not reporting foreign assets or income, as required under the Income Tax Act.
5. Incorrect bank account details: Providing incorrect or incomplete bank account information for refunds.
6. Failure to verify the return: Not completing the verification process, such as not signing the return or not submitting the ITR-V form.
7. Incorrect residential status: Misstating the residential status, which affects tax liability.
8. Non-disclosure of capital gains: Omitting details of capital gains transactions.
9. Incorrect deductions claimed: Claiming deductions without proper documentation or exceeding permissible limits.
10. Mismatch with Form 16/16A: Discrepancies between the return and the TDS certificates issued by employers or deductors.

Upon identifying such defects, the department issues a notice, and the taxpayer is required to rectify the issues within a specified period, typically 15 days.

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

When the Income Tax Department identifies defects in your filed return, you will receive a notice under Section 139(9) through the following channels:

1. Email: The notice is sent to the email address registered with the Income Tax Department.
2. SMS: An SMS alert is sent to the mobile number linked to your PAN.
3. Income Tax Portal: The notice is available in the 'Pending Actions' section of your account on the Income Tax e-filing portal.

It's essential to regularly check these channels to stay informed about any communications from the department. Prompt action is necessary to rectify the defects and avoid potential penalties.

How to correct defective ITR

To correct a defective Income Tax Return (ITR), follow these steps:

1. Review the notice: Carefully read the notice under Section 139(9) to understand the specific defects identified.
2. Gather necessary documents: Collect all relevant documents, such as Form 16, Form 26AS, bank statements, and proof of deductions.
3. Log in to the e-filing portal: Access your account on the Income Tax e-filing portal using your credentials.
4. Navigate to 'Pending Actions': Go to the 'Pending Actions' section to find the defective return notice.
5. Select the notice: Click on the specific notice to view its details.
6. Respond to the notice: Choose the option to 'Submit Response' and select the appropriate response type.
7. Rectify the defects: Make the necessary corrections in the return, such as updating missing information or correcting discrepancies.
8. Upload supporting documents: Attach any required documents to substantiate your corrections.
9. Submit the response: After making the corrections, submit the response to the notice.
10. Acknowledge the submission: Save the acknowledgment receipt for future reference.

Ensure that all corrections are made within the stipulated time frame, typically 15 days from the date of receiving the notice. Failure to respond within this period may lead to the return being treated as an invalid return.

Conclusion

Addressing a defective return promptly is crucial to ensure compliance with tax laws and avoid penalties. By understanding the common reasons for defects, regularly monitoring communications from the Income Tax Department, and following the correct procedure to rectify any issues, taxpayers can maintain accurate and compliant tax records. Staying informed and proactive in managing your tax returns contributes to a smooth and hassle-free tax filing experience.

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