Section 139(9) Notices Explained: Consequences of Ignoring Defective Return Alerts!

Section 139(9) of the Income-tax Act, 1961, addresses situations where the Assessing Officer (AO) considers a return of income furnished by a taxpayer to be defective. In such cases, the AO may issue a notice to the taxpayer, indicating the defect and providing an opportunity to rectify it. This article explores the provisions of Section 139(9), the common reasons for receiving such notices, and the consequences of not complying with the notice requirements.

What is Section 139(9)?

Section 139(9) allows the AO to intimate the taxpayer if their income tax return (ITR) is deemed defective. The AO must specify the defect and grant the taxpayer a period of fifteen days to rectify it. This period can be extended at the discretion of the AO, provided the taxpayer applies for such an extension.

If the taxpayer fails to rectify the defect within the specified time, the return is treated as invalid, and the provisions of the Income-tax Act apply as if the taxpayer had not filed a return at all.

However, if the taxpayer corrects the defect after the expiration of the initial fifteen-day period but before the assessment is made, the AO may condone the delay and treat the return as valid.

Common Reasons for Receiving a Notice u/s 139(9)

The Centralized Processing Center (CPC) often issues notices under Section 139(9) to taxpayers who have already filed their ITR under Section 139(1). The primary reasons for these notices include:

1. Inappropriate ITR Form Selection: Taxpayers may receive a notice if they select an incorrect ITR form that does not correspond to their income sources. Despite warnings provided on the e-filing portal, taxpayers sometimes choose an inappropriate form. This mismatch is often detected through information available in Form 26AS and the Annual Information Statement (AIS).
2. Mismatch in Income Reporting: A discrepancy between the income reported in the ITR and the income reflected in Form 26AS can trigger a notice. This situation arises when taxpayers fail to provide feedback in AIS (Annual Information Statement) where? the information in Form 26AS is incorrect, either partially or fully.

Consequences of Non-Compliance

Failure to address the defects specified in a notice under Section 139(9) can lead to several consequences including :

1. Invalid ITR: If the defects are not rectified within the prescribed time frame, the ITR is considered invalid. Consequently, it is treated as if no return was filed under Section 139(1).
2. Loss of Tax Regime Change Option: The taxpayer loses the option to switch to a different tax regime (except in the cases where the option in the form -10IEA? is furnished on or before the due date) as this option is typically available only with the original filing under Section 139(1). The taxpayer would then have to file a belated return under Section 139(4), which does not allow a regime change.
3. Late Filing Fee: A late filing fee of up to Rs 5,000 can be levied under Section 234F if the return is not filed within the due date. This fee becomes applicable when the original return is rendered invalid and a belated return is subsequently filed.
4. Interest on Delay: Interest under Section 234A may be charged for the delay in filing the return, calculated from the due date until the actual date of filing.

Conclusion:

Receiving a notice under Section 139(9) can be a cause for concern for taxpayers, but it also provides an opportunity to rectify any errors or omissions in the ITR. It is crucial for taxpayers to respond promptly and correct the defects to avoid the adverse consequences of having an invalid return.

By understanding the common reasons for such notices and the potential repercussions of non-compliance, taxpayers can take proactive steps to ensure their tax filings are accurate and compliant with the law.

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