income-tax

How to Respond Defective Return Notice Under Section 139(9)

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Table of Contents

Introduction

Receiving a notice from the Income Tax Department can be stressful, especially when it’s related to a defective return under Section 139(9). A defective return notice means that your income tax return (ITR) has errors or missing details that need to be corrected. Ignoring or failing to respond to this notice can result in your return being treated as invalid, leading to penalties or missed refunds.


In this guide, we’ll explain why you might receive a Section 139(9) notice, how to respond to it step-by-step, and the consequences of not addressing it on time. Let’s break it down in simple terms to help you navigate this situation smoothly.


What is a Defective Return Notice Under Section 139(9)?

A defective return notice under Section 139(9) of the Income Tax Act, 1961 is issued when the tax department finds discrepancies or missing details in the income tax return filed by a taxpayer. The notice specifies the defects and provides a deadline (usually 15 days from the date of receipt) to correct them.


Example:

Suppose you filed your return using ITR-1 (meant for salaried individuals) but had business income, which requires you to file ITR-3. In this case, the tax department will issue a defective return notice asking you to file the correct form.


Common Reasons for a Defective Return Notice

Understanding why you received the notice can help you fix the issue quickly. Here are some of the most common reasons:

1. Incomplete or Incorrect Information

  • Missing details like PAN (Permanent Account Number), bank account information, or income details.
  • Incorrect assessment year or financial year mentioned.


2. Mismatch in Reported Income and TDS

  • If the income reported in your ITR does not match the details available in Form 26AS (which shows TDS details), a notice may be issued.


Example: You reported ₹5,00,000 as salary income, but Form 26AS shows ₹6,00,000 — this mismatch could trigger a defective return notice.


3. Incorrect ITR Form Used

  • Filing ITR-1 instead of ITR-2 or ITR-3 based on your income type.
  • Business owners and professionals must file ITR-3, but if they mistakenly file ITR-1, a defective return notice will be issued.


4. Failure to Attach Mandatory Documents

  • Not attaching supporting documents like:
  • Balance sheet (if applicable)
  • Profit and Loss statement
  • Proof of deductions (Section 80C, 80D, etc.)


5. Missing or Invalid Taxpayer’s Details

  • Errors in name, address, or other personal information.
  • PAN or Aadhaar mismatch with tax department records.


6. Non-compliance with Filing Guidelines

  • Filing returns under the wrong ITR form.
  • Not providing the necessary details for specific income types (like capital gains).


How to Respond to a Defective Return Notice

Follow these steps to respond to a defective return notice through the Income Tax e-filing portal:

Step 1: Log in to the Income Tax Portal

  1. Go to the official website: https://www.incometax.gov.in
  2. Log in using your PAN/Aadhaar and password.


Step 2: Access the Defective Notice

  1. After logging in, go to:
  2. Dashboard → Pending Actions → E-Proceedings → Response to Defective Return Notice
  3. Select the notice issued under Section 139(9).


Step 3: Review the Defect Details

  1. Open the notice and carefully review the defect(s) mentioned.
  2. Note down the section and the specific error flagged by the department.


Step 4: Choose Your Response

You will get two options:

  • Agree with the defect – If you agree with the defect, correct the return and resubmit it.
  • Disagree with the defect – If you believe the notice is incorrect, provide a justification.


Step 5: Correct the Defective Return (if agreeing with the defect)

If you agree with the defect:

  1. Go to ‘File Income Tax Return’ under the e-filing section.
  2. Select the option ‘In response to notice under Section 139(9)’.
  3. Make the necessary corrections in the return (e.g., correct income details, TDS mismatch, ITR form type).
  4. Submit the revised return.


Step 6: Submit Your Response

  1. Once the corrected ITR is uploaded, go back to ‘Response to Defective Return’ section.
  2. Select ‘Response’ → ‘Return is corrected and being filed’ → Submit.


Step 7: E-Verify the Revised Return

  1. After filing the revised return, you must e-verify it within 30 days using:
  • Aadhaar OTP
  • Net Banking
  • EVC (Electronic Verification Code)
  • Sending signed ITR-V to CPC, Bengaluru


Step 8: Track the Status

  1. Go to ‘Dashboard → My Account → View Filed Returns’ to track the processing status.
  2. If accepted, you will receive an intimation under Section 143(1) confirming the return is processed.


 If You Disagree with the Defect

  • If you believe the notice is incorrect:
  • Select ‘Disagree with the defect’ in the response section.
  • Provide a detailed explanation with supporting documents (like Form 16, Form 26AS, AIS, etc.).
  • Submit your response online.


Consequences of Not Responding to the Notice

If you fail to respond to the defective return notice within the specified time (usually 15 days), the following consequences may apply:

🔴 Return Becomes Invalid

  • The tax department may treat your return as invalid.
  • This means you will be considered as not having filed a return at all.

🔴 Penalties and Interest

  • Non-compliance could attract penalties and interest on unpaid taxes.
  • Section 234F allows the tax department to impose a fine for late filing.

🔴 Loss of Refund

  • If your return included a refund claim, it will be rejected if the return is treated as invalid.

Example :

Let’s say a taxpayer files ITR-2 instead of ITR-3 and forgets to report capital gains from mutual funds. The tax department issues a defective return notice under Section 139(9). If the taxpayer corrects the return on time, the tax department will process the refund and close the case. However, if ignored, the return will become invalid, and the taxpayer could face penalties.


Tips to Avoid a Defective Return Notice

✅ Double-check income and TDS details with Form 26AS.

✅ Use the correct ITR form based on your income type.

✅ Ensure all required documents are attached before submitting the return.

✅ Verify PAN, Aadhaar, and bank details for accuracy.

✅ If unsure, consult a tax expert to avoid mistakes.


FAQs

Q1: How long do I have to respond to a Section 139(9) notice?

You have 15 days from the date of receiving the notice to respond. An extension may be granted if requested.

Q2: What happens if I file a revised return instead of a corrected return?

A revised return is treated differently from a corrected return under Section 139(9). Respond only through the "Submit Response" option for defective returns.

Q3: Can I challenge a defective return notice?

If you believe the notice was issued incorrectly, you can raise a grievance through the e-filing portal or consult a tax expert.


Conclusion

Receiving a defective return notice under Section 139(9) may seem intimidating, but responding correctly and on time can resolve the issue without complications. Make sure to understand the defects mentioned, correct them accurately, and re-submit your return within the deadline. If you need help, consider consulting a tax expert to ensure a smooth resolution.

 

If you require assistance with Income Tax Notices/Demands, Manthan Experts can be your trusted advisor. Contact them at info@manthanexperts.com.to discuss your specific needs and explore how their expertise can benefit your business.


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