What is a Defective Return u/s 139(9)

The income Tax Return (ITR) filing due date for FY 2022-23 (AY 2023-24) was over by 31st July 2023. Though the ITR filing was a cakewalk for most people few have experienced that soon after filing their ITR, income tax returns turn defective.

There are many reasons for such defective notice but it’s mainly due to the mismatch between the information displayed in Form-26AS/AIS & information disclosed in ITR.

In this article, let’s discuss:

1. What is a defective Return?
2. Reasons for defective return
3. How to rectify the defect?
4. A preventive mechanism for avoiding a defective return

What is a Defective Return

After filing your ITR, the department matches the ITR data with the information available with the department i.e. Form-26AS/AIS etc. If the department finds out the defect/error in your ITR, then your ITR will be known as a “Defective Return”.

After identifying the defect, the department will issue notice u/s 139(9) to communicate the same to the taxpayer and the taxpayer will have 15 days from the date of issue of such notice to rectify the defect. If the defect is not rectified within the time allowed, the return will become invalid.

Reasons for Defective Return

There would be many reasons behind the Defective Return. Some of the reasons are:

1. Information/income disclosed in Form-26AS/AIS is not fully considered in ITR
2. Gross receipts in 26AS/AIS are higher than income reported in ITR
3. The return form or annexures to the form are not filled out properly/completely
4. Unpaid taxes while filing ITR
5. Mismatch of the NAME in ITR with the PAN database
6. TDS credit was claimed but no corresponding income was offered in ITR
7. Details of tax paid i.e. TDS/TCS & Self-assessment tax are not entered in ITR
8. Incomplete details about B/s and Profit and Loss account, when books of accounts are maintained
9. Income under a specific head is not considered though similar income is reflected in AIS
10. Furnishing incorrect ITR form

How to rectify the defect

After receiving the defective notice, the taxpayer will have 15 days to rectify the defect otherwise the return will be invalid.

Taxpayers will have 2 options to rectify the defect.

1. File Revised Return u/s 139(5) or filing ITR in response to notice u/s 139(9)
2. Submit a response in the Income Tax Portal

Consequences of not rectifying the defect

If the defective is not rectified within the time limit of 15 days or within the extended time limit, ITR will be treated as invalid and all the consequences of non-filing of ITR will follow.

The preventive mechanism for avoiding a defective return

By following the given below steps during the ITR filing, you can avoid a defective return. These are simple yet effective steps to ensure your ITR is processed successfully.

1. Consider incomes/information disclosed in Form-26AS/AIS
2. Fill all relevant schedules or annexures in ITR
3. Classify incomes under suitable heads of income
4. In case of tax liability, make sure to remit it before filing of ITR

Conclusion

Always take utmost care while filing ITR by considering all your information related to a particular financial year as furnishing incomplete/inaccurate may lead to a defective notice. Even after taking the precautions, if you got the notice try to identify the defect and rectify it within the time limit by following the methods specified above.

Hope you have enjoyed the article, thank you for your time.