Invalid return

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

10 April 2013 Dear Experts

Sir, i filled a income tax return of AY-2011-12 on 25-7-2011 manually. I have contract receipts of Rs.26 lacs, so i filled the return manually. But the TDS was deducted u/s 194J instead of 194C. On these basis, the income tax officer, issue me a letter saying that your return is invalid as you have filled return manually and you have also taken audit report u/s 44AB.

I gave a reply that as i do not cover under tax audit, so no audit report was taken. If you think that audit was necessary, then i gave him reply you take penalty @ 0.50% of my receipts and allow me the refund of balance amount.

In response to my reply officer issued me a notice u/s 147.
Now, what should i do.

Thanks in advance

Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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10 April 2013 Better to you contact any CA. As well as my suggestion is first get the certificate from the payer who deducted TDS u/s 194J instead of 194C as they paid contract fee but unfortunately we deduct TDS u/s 194J but we didn't notice the mistake till it is identified by the contractor with details of the work provided by you etc.... because of it may use full to you to support your answer to the AO for your further proceedings.

OM SAI SRI SAI JAI JAI SAI

CA Prashant Shrivastava

CA Prashant Shrivastava (Expert)
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10 April 2013 In addition to suggestion given by the expert, plz note that AO issues notice u/s 148 of IT Act and ask to file the return of income.
Basically notice u/s 148 issued by AO when he has reason to believe that any income has been escaped. In aforesaid case AO can issue notice u/s 143(2) and can ask for demand.
As such inform all the facts to your consultant and act accordingly.

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Querist : Anonymous

Querist : Anonymous (Querist)

16 April 2013 Sir,
On wbat grounds return is invalid. If return is invalid, then under what circumstances the assessing officer can impose penalty of 1/2%. In my opinion this is the only case when the assessing officer can impose penalty of 1/2%, Then how he is saying the return is invalid.

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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01 August 2024 It appears that you are dealing with a complex situation involving the validity of your income tax return and potential penalties. Let’s break down the issues and steps you might take to address them:

### **Reasons for Return Being Deemed Invalid:**

1. **Manual Return Submission**: Typically, the Income Tax Act requires the submission of returns electronically for certain categories of taxpayers. If you were required to file electronically but submitted manually, this could be a reason for the return being considered invalid.

2. **Incorrect TDS Section**: Filing the return with TDS deducted under Section 194J instead of Section 194C could lead to discrepancies in the assessment. The officer might question the accuracy and validity of the return based on this.

3. **Audit Report Requirement**: If the assessing officer believes that you should have taken an audit report under Section 44AB but did not, it could affect the validity of the return.

### **Penalties and Notices:**

1. **Penalty for Non-Compliance**:
- Under Section 271B of the Income Tax Act, if a person fails to get their accounts audited when required by law, a penalty of 0.5% of the total sales, turnover, or gross receipts may be imposed.
- If you did not meet the threshold requiring an audit, the penalty should not apply. However, if the assessing officer believes an audit was necessary and you did not comply, they might impose this penalty.

2. **Notice Under Section 147**:
- A notice under Section 147 is typically issued if the assessing officer has reason to believe that income has escaped assessment.
- This notice is often a precursor to a reassessment of your income and tax liability for that assessment year.

### **Steps to Take:**

1. **Review the Notice**: Carefully review the notice under Section 147 and understand the specific reasons cited for reopening the assessment.

2. **Prepare a Response**:
- Provide a detailed response addressing why the return was filed manually and why you believe the audit report was not required.
- Explain the discrepancy regarding the TDS section and provide any necessary documentation or explanations.

3. **Consult a Tax Professional**: Given the complexity of the situation, consulting a tax professional or a chartered accountant would be beneficial. They can help:
- Review the notices and the return.
- Prepare a response to the assessing officer.
- Represent you in front of the tax authorities if needed.

4. **Submit Documents and Responses**: Ensure that all documents and responses are submitted promptly to the assessing officer and maintain copies for your records.

5. **Consider Legal Remedies**: If you believe that the penalty or the notice is unjust, you might explore legal remedies or appeal options available under the Income Tax Act.

In summary, your return being deemed invalid likely stems from issues related to manual filing, incorrect TDS, and audit requirements. Addressing the issues with a detailed and well-supported response, ideally with the help of a tax professional, will be crucial in resolving the situation.