Defective Income Tax Return 

Defective return is the return of income which is rejected by the Income Tax Department due to certain defects. After the defects being identified by the department, a notice under section 139(9) is issued to assessee. 

Common errors that make a return Defective?

• Credit for TDS has been claimed but the corresponding receipts/income has been omitted to be offered for taxation,
• The gross receipts shown in Form 26AS, on which credit for TDS has been claimed, are higher than the total of the receipts shown under all heads of income, in the return of income.
• "Gross Total Income" and all the heads of income is entered as "nil or 0" but tax liability has been computed and paid.
• Name of taxpayer in ITR does not match with the "Name" as per the PAN data base.
• Taxpayer having income under the head “Profits and gains of Business or Profession” but has not filled Balance Sheet and Profit and Loss Account.

What to do next?

The assessee is required to rectify the defects within 15 days of notice and in case he fails to do so, the return is treated as invalid. In case assessee is unable to rectify the mistake within 15 days, then he can file an application in writing to Assessing Officer (AO) for extension and if AO finds the reasons stated to be reasonable, then he may condone the delay. 

What if don't respond to a Defective Notice?

If you fail to respond to the defective notice within stipulated period then your return may be treated as invalid and therefore consequences such as penalty, interest, non carry forward of losses, loss of specific exemptions may occur, as the case may be in accordance with the Income Tax Act.

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