Defective return notice is issued to the email id mentioned in filed ITR. The subject of the email is “Fwd: Communication under section 139(9) for PAN XXXXX5789X for the A.Y.20XX-XX”. The notice is password protected. The password is your PAN in lower case followed by the date of birth in DDMMYYYY format. You can file a response to notice u/s 139(9) from your login on the Income Tax E-filing portal within 15 days.
What does the return file without a tax audit report mean?
Individuals are required to get their books of accounts audited in the following cases:
- Total sales, turnover or gross receipts, in business, exceeds INR 1 Crore in any previous year,
- Gross receipts in profession exceed INR 50 Lakh in any previous year,
- The income from business/ profession is lower than the presumptive income calculated as per section 44AD/ 44ADA and the total income is more than INR 2,50,000.
Any Practising Chartered Accountant can carry out tax audit on books of accounts of a taxpayer. The prepared tax audit report is required to be submitted on the income tax e-filing portal. It also needs to be approved by a taxpayer before filing ITR. In following cases you can receive defective return notice when returns are filed without an audit report:
- Carried out by CA,
- Submitted by CA or,
- Accepted by a taxpayer.
Bharat is a salaried individual who also does F&O Trading. His turnover from trading is INR 2.5 Crore. Here, he is required to get his books of accounts audited. But while filing ITR-3 for FY 2018-19, he did not get his books of accounts audited. In this case, he would receive defective return notice for the return filed without a tax audit report.
How to resolve defects and file a response u/s 139(9) with the IT Department?
There are 3 steps:
- Submit a Tax Audit Report prepared by CA,
- Prepare a revised return,
- File response on Income Tax E-filing Website.
1. Submit a Tax Audit Report prepared by CA
- Get your books of accounts audited by a practising CA,
- Add the CA from your login on Income Tax E-filing website,
- Accept the uploaded tax audit report.
Bharat needs to have his books of accounts audited by taking the service of a CA. After the preparation of the audit report, he needs to accept the same from his login. According to the above example,
2. Prepare a revised return
- Understand the defect mentioned in the notice,
- Keep the submitted tax audit report in hand,
- Download the latest ITR Filing Utility from Income Tax E-filing portal,
- Go to PART-A-GENERAL and fill the basic details OR Download the filed XML from your account,
- Go to Filing Status section under PART A-GENERAL,
- Select 139(9) under Filed in response to notice u/s,
- Enter Date of Filing Original Return from notice,
- Input the Receipt No. i.e, Original Return’s Acknowledgement Number,
- Enter Date of notice i.e, Date of Communication from notice,
- Add the Audit Information in PART A-GENERAL,
- Enter details in Balance Sheet and P&L schedule as per tax audit report,
- Check Computation of tax liability in Part B-TTI,
- Save the XML on your PC and proceed to file the response.
In the above example, Bharat needs to revise his ITR with Audit Information, Balance Sheet, and P&L as per the tax audit report.
3. File response u/s 139(9) on Income Tax E-filing Website
Following are the steps to file response:
- Go to Income Tax E-filing Website
Login to your account on the Income-tax e-filing website. Additionally, enter the user ID (PAN), Password, Captcha Code and click on ‘Login’,
- Click on “View Returns/ Forms”
Hence, select “Income Tax Return” from the dropdown
- Click on “Ack No.”
Click on the Acknowledgment Number next to the filing date.
- In download/status section:
Furthermore, click on “e-File in response to Notice u/s 139(9)”
- Under Response to Notice u/s 139(9)
Click on “SUBMIT”
- If you agree with defect then select “Yes”.
Select ITR Form from the dropdown list, upload the saved XML and click on submit. In Bharat’s case, he needs to select Yes, select ITR-3 from the dropdown, upload saved XML and click submit.
- If you don’t agree with defect select “No”. Add a remark and click on submit.
For example, you can put remark that the tax audit report is submitted with ITR and click on submit.
Yes, you can download a tax audit report in pdf form before submitting it. Since submission is not complete without your approval.
Yes. You can apply for extensions in the time limit to your AO. You can write a letter to your AO for an extension. And AO can grant an extension if he finds your reason genuine.