December 17, 2021

Have you ever thought about sections 139(9) and 154? Ever wondered what is it about? To help you out, in this article, we have discussed elaborately about these sections. So, without further ado, let us get started.

Section 139(9): Defective Income Tax Return

In this case, Assessing Officer (AO) is of the opinion that ITR filed by the assessee is defective. The best part is that a proper error description is shared and the AO also suggest a probable solution to rectify the same. The assessee is given an opportunity to respond within 15 days from the date of intimation or before it is assessed. If you don’t respond within 15 days then your return will be rejected by the AO and the return shall be considered as an invalid return and accordingly the assessee will be deemed to have furnished no return. Provided in the case where assessee rectifies the defect after the aforesaid period but before the completion of assessment, the AO may condone the delay and treat the return as a valid return. The defect u/s 139(9) can be the wrong ITR filed, missing information, incomplete return etc.

You may agree or disagree with the observation of the Assessing Officer. In the majority of the cases, without going into the merits, the assessee accept/agree on the defect. This is one of the common mistakes by the assessee. If you do not agree with the error description then you can reply to the income tax notice and share the reasons for the same. The only catch is you should know all the rules.

Notice u/s 154

It might happen that the taxpayer may forget to claim certain incomes or deductions in his Income-tax return. Sometimes the taxpayer may inadvertently claim certain incomes or deductions under the wrong head, such issues are referred as “mistake apparent from record” as per the Income Tax Act. Notice under section 154 of the Income-Tax Act is the rectification order issued by the department in case of such mistake apparent from record*. The income tax department may issue such notice in response to a rectification request filed by the assessee or it can self-generate the rectification order, where they notice any discrepancy in the income tax return processed.

The meaning of “Mistake” from the perspective of section 154 is Mistake includes any arithmetical & clerical errors/mistakes, Misreading a clear provision of the Income Tax Act, Applying an inapplicable provision of the act, Non-following a decision of Jurisdictional High court, Erroneous application of a provision of the act, Overlooking a non-discretionary but mandatory provision.

Income Tax authority may;

  • Amend any order passed by it under the Income Tax Act.

  • Amend any intimation or deemed intimation under section 143(1).

We hope this article was helpful to you. Do you have more queries? Are you looking for a CA in Bangalore? If yes, then get in touch with us.

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