Notice of defective return u/s 139(9) error code 31
This query is : Resolved
12 January 2017
During last FY 15-16 I had a small portion of income from consultancy rest from salary. I filed ITR 4. I have received above notice. It was a No Accounts Case. How do I fill up BS now as I have no particulars. On consulting it has been suggested that I show the profit from professional income under 44AD in Sch BP and leave the BS blank. Could you pl guide.
12 January 2017
Dear Vijay,
Take professional service for the same as u have file rectification under 139(9) .
Take professional service for the same as u have file rectification under 139(9) .
13 January 2017
Dear Anurag,
I am seeking professional advice in this forum. 44AD has been suggested. I am seeking a second opinion whether this is the right course.
I am seeking professional advice in this forum. 44AD has been suggested. I am seeking a second opinion whether this is the right course.
04 August 2024
Under Section 139(9) of the Income Tax Act, a notice for a defective return indicates that there are errors or missing information in the return filed. Error code 31 generally relates to issues with the “Balance Sheet” or “Profit and Loss Account” details, which are required for returns filed under certain sections.
Given that you filed ITR 4 for a No Accounts Case but received a notice under Section 139(9) with error code 31, let’s address your concerns:
### Understanding the Issue
1. **Error Code 31**: This code usually points to issues related to the “Balance Sheet” and “Profit and Loss Account” sections in the ITR form. It suggests that the required details might be missing or incorrectly filled.
2. **ITR 4 (Section 44AD)**: This form is used for individuals and HUFs who have income from business or profession. Section 44AD pertains to presumptive taxation where the income is deemed to be a certain percentage of the gross receipts, and the detailed accounts are not required.
### Addressing the Notice
1. **Income from Consultancy and Salary**: Since your income from consultancy is subject to presumptive taxation under Section 44AD, and considering that you have received a defective return notice, you should verify the following:
- **Consultancy Income**: You can indeed show your consultancy income under Section 44AD, which allows you to declare your professional income as presumptive income. This simplifies your tax filing by not requiring a detailed Balance Sheet or Profit and Loss Account.
- **Salary Income**: Ensure that salary income is correctly reported in the relevant section of the ITR.
2. **Filling Up the Balance Sheet**:
- **If claiming Section 44AD**: In this case, you are not required to maintain books of accounts or provide a Balance Sheet and Profit and Loss Account. You should use the "Presumptive Income" option in the ITR.
- **Balance Sheet**: If you have opted for Section 44AD and are declaring your consultancy income as per this section, you do not need to fill out the Balance Sheet and Profit and Loss Account sections. You should leave these sections blank or put "N.A." (Not Applicable) if that option is available.
### Steps to Rectify the Defective Return
1. **Revisit the Return**: Correctly fill out the ITR 4 by:
- **Choosing Section 44AD**: Indicate that you are opting for presumptive taxation under Section 44AD.
- **Leaving Balance Sheet and P&L Account Blank**: Since you are opting for presumptive taxation, these sections can be left blank.
2. **Submit a Revised Return**: File a revised return correcting the errors. Ensure that the income from consultancy is reported under Section 44AD and that you provide accurate details for your salary income.
3. **Respond to the Notice**: If the Income Tax Department has issued a notice for a defective return, you must respond with the corrected information. Include a covering letter explaining the changes and indicating that you have opted for presumptive taxation under Section 44AD.
4. **Documentation**: Keep documentation of your revised return and any correspondence with the Income Tax Department for future reference.
### Conclusion
- **Opt for Section 44AD** if you want to avoid maintaining detailed accounts.
- **Leave Balance Sheet and P&L Account Sections Blank** if using Section 44AD.
- **Submit a Revised Return** with the corrected details and respond to the defective return notice.
If you have specific questions or need assistance with the revised return, consulting with a tax professional can provide personalized guidance based on your unique situation.
Given that you filed ITR 4 for a No Accounts Case but received a notice under Section 139(9) with error code 31, let’s address your concerns:
### Understanding the Issue
1. **Error Code 31**: This code usually points to issues related to the “Balance Sheet” and “Profit and Loss Account” sections in the ITR form. It suggests that the required details might be missing or incorrectly filled.
2. **ITR 4 (Section 44AD)**: This form is used for individuals and HUFs who have income from business or profession. Section 44AD pertains to presumptive taxation where the income is deemed to be a certain percentage of the gross receipts, and the detailed accounts are not required.
### Addressing the Notice
1. **Income from Consultancy and Salary**: Since your income from consultancy is subject to presumptive taxation under Section 44AD, and considering that you have received a defective return notice, you should verify the following:
- **Consultancy Income**: You can indeed show your consultancy income under Section 44AD, which allows you to declare your professional income as presumptive income. This simplifies your tax filing by not requiring a detailed Balance Sheet or Profit and Loss Account.
- **Salary Income**: Ensure that salary income is correctly reported in the relevant section of the ITR.
2. **Filling Up the Balance Sheet**:
- **If claiming Section 44AD**: In this case, you are not required to maintain books of accounts or provide a Balance Sheet and Profit and Loss Account. You should use the "Presumptive Income" option in the ITR.
- **Balance Sheet**: If you have opted for Section 44AD and are declaring your consultancy income as per this section, you do not need to fill out the Balance Sheet and Profit and Loss Account sections. You should leave these sections blank or put "N.A." (Not Applicable) if that option is available.
### Steps to Rectify the Defective Return
1. **Revisit the Return**: Correctly fill out the ITR 4 by:
- **Choosing Section 44AD**: Indicate that you are opting for presumptive taxation under Section 44AD.
- **Leaving Balance Sheet and P&L Account Blank**: Since you are opting for presumptive taxation, these sections can be left blank.
2. **Submit a Revised Return**: File a revised return correcting the errors. Ensure that the income from consultancy is reported under Section 44AD and that you provide accurate details for your salary income.
3. **Respond to the Notice**: If the Income Tax Department has issued a notice for a defective return, you must respond with the corrected information. Include a covering letter explaining the changes and indicating that you have opted for presumptive taxation under Section 44AD.
4. **Documentation**: Keep documentation of your revised return and any correspondence with the Income Tax Department for future reference.
### Conclusion
- **Opt for Section 44AD** if you want to avoid maintaining detailed accounts.
- **Leave Balance Sheet and P&L Account Sections Blank** if using Section 44AD.
- **Submit a Revised Return** with the corrected details and respond to the defective return notice.
If you have specific questions or need assistance with the revised return, consulting with a tax professional can provide personalized guidance based on your unique situation.
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