1. Introduction to Defective Returns
A defective return is an income tax return (ITR) which has already been filed but it contains various errors or mistakes, making it non-compliant in relation to requirements stipulated under the Income Tax Act.
These errors may arise due to various reasons, such as wrong information, missing data entry, or non-compliance in relation to specific tax filing guidelines as issued by Income Tax Department.
2. Common Reasons behind Defective Returns
There are various reasons due to which an ITR may be considered as defective. The most common reasons are as under:
a. Incomplete Filing such as Non-filing of key schedules or sections or claiming excess
b. Filing of Incorrect Information such as:
- Mismatched of information between the ITR and Form
- Mistakes in personal details such as PAN, name, or
c. Unpaid Tax Liability
- There is tax payable however the return is
- Mismatch in reported income and tax
d. Inconsistencies in Financial Data
- Misreporting of deductions or
- Wrong computation of taxable
e. Technical Errors
- Filing ITR in an incorrect format or using wrong ITR
- Use of outdated forms or software for filing.
3. Defective Tax Returns: Section 139(9) of the Income Tax Act
Section 139(9) of the Income Tax Act, 1961, provides the provisions related to defective Income Tax returns.
Under the purview of this section, if the tax department (Centralised Processing Centre) or Assessing Officer finds that a return of income is defective, they will notify the taxpayer by issuing notice, and providing them an opportunity to rectify the defects within 15 days from the date of the notice.
If the defects are not rectified within the due time, the return will be treated as an invalid return, implying that it was never filed. Accordingly, the taxpayer may face penalties and interest for late filing or non-filing of the return.
4. Process of Receiving Defective Return Notice
A taxpayer is notified through a formal notice if defect in any income tax returns filing in Delhi are identified. This notice can be received through email, SMS, or on the income tax portal. The notice typically includes:
- The Notice enclosing reason(s) why the return is considered
- Guidance on how to rectify the defect.
- The timeline within which the error can be
- Consequences of failing to rectify the defect within the stipulated
5. Procedure to Correct a Defective Return
The process of rectifying a defective return includes the following steps:
- Visit the official income tax e-filing website and log in using your credentials (User ID and Password).
- Go to the ‘e-Proceedings’
- Click on ‘Response to Notice u/s 139(9).
- Open the notice to identify the specific defects
- Prepare the Corrected Return: Download the ITR form applicable for the relevant assessment year.
- Correct the defects as mentioned in the notice and Ensure that all mandatory fields are filled and the discrepancies appearing in the notice are
- After required correction, generate the XML
- Go back to the e-filing portal and select ‘e-File’ from the menu and choose the ‘Income Tax Return’
- Upload the corrected XML file, ensuring the following selection ‘139(9)- Response to defective return notice’ under the ‘Filed u/s’
- Complete the verification process using any of the available methods i.e. Aadhaar OTP or Electronic Verification Code (EVC) or Sending a signed physical copy of ITR-V to the Centralized Processing Center (CPC).
6. Consequences of a Defective Return
In case of Failure to rectify a defective return within the specified time can result in following consequences:
- Invalid Return: The return will be treated or deemed as invalid, as if it was never filed.
- Penalties and Interest: Penalties and interest may be levied for late filing or non-filing of the
- Loss of Refunds: Any refunds due will not be processed until the defects are
Taxcellent helps you to file Income Tax Return (“ITR”) and also help you to rectify defects identified in ITR. We also deal with Income Tax Notices issued by Income Tax Department.
