Section 139(9) of the Income Tax Act, 1961 deals with the rejection of income tax returns

 Section 139(9) of the Income Tax Act, 1961 deals with the rejection of income tax returns that are not filed in the prescribed format or are incomplete. This section specifically outlines the circumstances under which the Income Tax Department can issue a notice regarding the defective return.

Key Provisions of Section 139(9):

  1. Defective Return:

    • Under Section 139(9), the Income Tax Officer (ITO) can issue a notice if the income tax return (ITR) filed by a taxpayer is considered defective. A return is considered defective if it does not comply with the prescribed format, lacks necessary details, or if any required attachments or documents are missing.

  2. Notification of Defect:

    • If the Income Tax Department believes that the return is defective, the taxpayer is notified through a notice issued under Section 139(9) specifying the defects in the return. The taxpayer is given an opportunity to rectify the mistake or provide the missing information.

  3. Time to Rectify:

    • After receiving the notice under Section 139(9), the taxpayer is typically given 15 days to rectify the defects. However, the Assessing Officer (AO) may extend this period, depending on the circumstances.
    • If the taxpayer does not rectify the defects within the specified time, the return may be considered invalid, and the Assessing Officer may treat the return as not filed under Section 139.

  4. Common Defects Under Section 139(9):

    • Incomplete Details: Missing mandatory details such as taxpayer’s name, PAN (Permanent Account Number), or other key information.
    • Invalid Signatures: Missing or invalid signature of the taxpayer or their representative.
    • Inappropriate ITR Form: Filing the wrong form for the type of income or taxpayer.
    • Inadequate Documentation: Missing supporting documents (such as tax audit report or proof of deductions).
    • Mathematical Errors: Arithmetic mistakes or errors in calculations leading to an incorrect return.

  5. Section 139(9) Notice:

    • The notice issued under this section is typically issued as a defective return notice, which asks the taxpayer to correct the defect(s) in their return and submit it again in a proper manner.

  6. Impact of Non-Compliance:

    • If the taxpayer does not comply with the notice and fails to correct the defective return, the return may be rejected by the authorities. If rejected, the taxpayer would have to file a revised return within the prescribed time frame under Section 139(5) (if applicable), or risk facing penalties and interest.

Purpose of Section 139(9):

The primary purpose of Section 139(9) is to ensure that the returns filed by taxpayers are accurate, complete, and comply with the legal requirements set by the Income Tax Department. This section helps in maintaining the integrity of the tax filing process, ensuring that the returns are in the right format and contain the correct information for proper tax assessment.

Process Under Section 139(9):

  1. Filing of Return: The taxpayer files an income tax return.
  2. Defective Return Identification: The Income Tax Department or the Assessing Officer (AO) identifies that the return is defective.
  3. Notice Issued: The taxpayer is issued a notice under Section 139(9) informing them of the defects.
  4. Rectification: The taxpayer must rectify the defects within 15 days (or as specified) and submit the corrected return.
  5. Rejection or Acceptance: If the defects are not rectified, the return is deemed not filed, and the taxpayer may have to file a fresh return.

Example of Defective Return:

  • Missing PAN Number: A taxpayer files a return without providing their Permanent Account Number (PAN), which is mandatory for processing the return.
  • Incorrect ITR Form: A salaried individual files an ITR form meant for businesses or a self-employed professional files a form meant for individuals with no business income.

Conclusion:

Section 139(9) provides the Income Tax Department the authority to notify and correct defects in a taxpayer's return. The aim is to ensure that tax returns are accurate and complete, allowing for proper assessment and preventing errors in tax calculations. Failure to rectify the defects could lead to the rejection of the return and possible penalties or other legal consequences.

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