Errors and omissions are not uncommon in the complex process of filing income tax returns. Such oversights can render your return "defective," prompting the issuance of a notice under Section 139(9) of the Income Tax Act, 1961. This section outlines that when the Assessing Officer identifies defects in your return and henceforth Notice u/s 139(9) is issued to assessee
What is notice u/s 139(9)of the Income Tax Act?
A notice for a defective return under Section 139(9) of the Income Tax Act is issued when a filed income tax return is found to be incomplete or incorrect according to the provisions of the tax laws. This notice serves as a communication from the Income Tax Department, alerting the taxpayer to identified defects in their return.
What makes a return defective?
A return is considered defective under the Income Tax Act when it fails to comply with the provisions and requirements outlined in the tax laws. Several factors can render a return defective, and common reasons include:
1. Incomplete Information: Missing or inaccurate personal and financial details, such as name, address, PAN, or other essential information.
2. Mathematical Errors: Incorrect calculations that lead to discrepancies in the computation of total income, deductions, or tax liability.
3. Non-compliance with ITR Form: Filing the wrong Income Tax Return (ITR) form for the applicable assessment year or not providing all the required information in the chosen form.
4. Non-attachment of Supporting Documents: Failure to provide necessary documents supporting the declared income, deductions, or other claims made in the return.
5. Mismatch in TDS Details: Discrepancies between the TDS details mentioned in the return and the information available in Form 26AS, which is a statement reflecting tax credits.
6. Non-disclosure of Bank Accounts: Failure to disclose all relevant bank accounts, including dormant or inactive accounts, as required by the tax authorities.
7. Incorrect Claims: Making inaccurate claims for deductions, exemptions, or credits that are not in accordance with the tax laws.
8. Filing Beyond the Due Date: Submitting the return after the specified due date without valid reasons, which may lead to penalties or consequences.
9. Non-compliance with Notices: Ignoring or not responding appropriately to notices issued by the tax authorities, including those related to verification or clarification.
10. Incorrect Personal Information: Providing incorrect personal details, such as the wrong PAN or Aadhaar number.
It's essential for taxpayers to carefully review their returns before submission to ensure accuracy and compliance with the tax regulations. In the event of a notice of defective return under Section 139(9), taxpayers should promptly rectify the identified defects within the given timeframe to avoid further scrutiny or penalties.
What are the necessary steps to take after receiving a notice under Section 139(9)?
Upon receiving a notice of a defective return under Section 139(9), it is imperative to rectify the return within 15 days from the notice date. Alternatively, a taxpayer can seek an extension by submitting a written application to the Assessing Officer (A.O.), requesting additional time to file a revised return. Generally, it is observed that even if a taxpayer rectifies the defect after the initial 15-day period, the Assessing Officer may, before the assessment, exercise discretion to condone the delay and validate the return.
What are the consequences of failure to respond to the notice?
Failure to respond to a notice under Section 139(9) of the Income Tax Act can lead to several consequences for the taxpayer. Here are some potential repercussions:
1. Invalid Return: If the taxpayer does not rectify the defects within the specified timeframe or the granted extension, the original return is treated as invalid. This can result in the tax authorities disregarding the initially filed return.
2. Assessment Based on Defective Return: The tax authorities may proceed with the assessment based on the information available in the defective return. This could lead to inaccuracies, potentially resulting in a higher tax liability or other adverse outcomes.
3. Penalties and Interest: Failure to respond to the notice or rectify the defects may attract penalties and interest. The tax authorities have the discretion to impose penalties for non-compliance with the notice and any resulting tax liabilities.
4. Loss of Deductions and Benefits: Incorrect or incomplete information in the defective return may lead to the loss of eligible deductions, exemptions, or benefits that the taxpayer would have otherwise been entitled to.
5. Increased Scrutiny: Non-response may trigger increased scrutiny from tax authorities in subsequent assessments. The taxpayer's financial affairs may be subject to closer examination, potentially leading to more audits or investigations.
In what ways can I expect to receive a notice under Section 139(9) of the Income Tax Act?
Notices under Section 139(9) of the Income Tax Act are typically delivered through E-mail, email, online portals, or SMS notifications. Taxpayers should ensure their contact information is up-to-date to receive and respond promptly to any communication from the tax authorities.
A Step-by-Step Response Plan
To respond to notices under Section 139(9) involves a series of steps :
Start by clicking on "Pending Actions" on your dashboard and then access "e-proceedings."
If you haven't received any notice, the system will display "No e-proceedings records." In the event of pending actions, click on "For your action and view Notices."
Once you view the notice by clicking on "Notice/Letter pdf," proceed to "Submit a Response."
Upon selecting "Agree" or "Disagree" with the notice, the system guides you through the response process. If your response is "Agree," it prompts you to provide a response for the identified defect.
Alternatively, if you disagree with the notice, you can select the appropriate option and articulate your reasons in the text box provided
Concluding the response process, the Next step allows you to submit attachments if you've opted for the offline utility mode to rectify the identified defect.
This streamlined e-proceedings system ensures a user-friendly and efficient response mechanism, enabling taxpayers to address notices promptly and accurately. It promotes transparency and facilitates a clear communication channel between taxpayers and tax authorities.
Important Note: Currently, withdrawing a response is not an available option. However, you have the flexibility to either update or view the response you previously submitted.
Q1. What is a Section 139(9) Notice under the Income Tax Act?
Section 139(9) notice is issued by the tax authorities when defects or discrepancies are identified in your filed income tax return. It prompts taxpayers to rectify these issues within a specified timeframe.
Q2. How will I know if I have received a Section 139(9) Notice?
You can check for notices by logging into the Income Tax portal. Navigate to "Pending Actions," then "e-proceedings," and if applicable, click on "For your action and view Notices."
Q3. Can I Withdraw a Response Made to a Section 139(9) Notice?
No, withdrawal is not an option. However, you can update or view the response you submitted, providing flexibility for any necessary modifications during the proceedings.
Q4. What Happens if I Ignore or Don't Respond to a Section 139(9) Notice?
Ignoring or not responding may lead to consequences such as the original return being treated as invalid, assessments based on the defective return, penalties, and legal actions.
Q5. How to View the Section 139(9) Notice After Logging In?
After logging in, go to "Pending Actions," then "e-proceedings." If there's a notice, click on "For your action and view Notices," and then select "Notice/Letter pdf" to view the notice.
Q6. What is the time frame for Responding to a Section 139(9) Notice?
Typically, you are given 15 days to respond to the notice. It's crucial to adhere to this timeframe to avoid potential penalties and legal consequences.
Q7. Can an Extension be sought for Responding to a Section 139(9) Notice?
Yes, you can seek an extension by submitting a written application to the Assessing Officer, providing valid reasons for needing additional time.
Q8. Is Professional Assistance Necessary for Responding to Section 139(9) Notices?
While not mandatory, seeking assistance from a Chartered Accountant or tax professional can be beneficial in understanding the notice and ensuring an accurate and timely response.
Q9. Can I Submit Attachments When Responding to a Section 139(9) Notice?
Yes, if you choose the "Agree" option and offline utility as the response mode, you can submit attachment files for rectifying the identified defect.