I have received a notice from department stating that there is defect in the ITR filed for AY16-17.
Assessee has filed ITR-4 being a tuition teacher. She does not maintain regular books of accounts, so presumed income is considered.
In the return filed, I have shown gross profit and net profit, where regular books of accounts does not maintained by the assessee, but nothing is shown in balance sheet pt no 6 i.e no account case section, where columns are: sundry debtors, sundry creditors and cash balance amount
the defect in the notice is taxpayer having income under PGBP but has not filled B/S and P/L account as per sec 139(9)(f) r.w.s 44AA
For last AY also, I have filed the return on similar lines but no objection came in that year.
Please suggest what has to be done. Whether I need to agree with defect and file the rectified return, then what will be the rectification?
or I need to disagree with the defect, then what reason has to be stated in the remarks column
Please reply....it's urgent
Thanks in advance.
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Notice for defect u/s139(9) error code 31- no Account Case section
Replies (13)
".......the defect in the notice is taxpayer having income under PGBP but has not filled B/S and P/L account as per sec 139(9)(f) r.w.s 44AA"
The defect is clearly mention in the notice that for the assessee Books of accounts are to be maintained as per section 44AA of IT act, 1961.
Such sort of mistakes were not noticed till the year, but these year all such defects are not accepted by department.
Prepare P & L acc and BS, may be tantative but as per submited gross profit and net profit.
AGREE WITH THE DEFECT and submit revised return with P&L & BS.
Good luck.
but Sir, if I mention cash balance amount in balance sheet No Account Case section and file the revised return accordingly.....is it correct?
because gross profit and net profit are mentioned in no account case section i.e where no books of accounts are being maintained (pt no 53)
is it necessary to prepare balance sheet and profit and loss account
her gross profit is above ₹1,20,000
because gross profit and net profit are mentioned in no account case section i.e where no books of accounts are being maintained (pt no 53)
is it necessary to prepare balance sheet and profit and loss account
her gross profit is above ₹1,20,000
For your understanding the provision, I am attaching an example from : https://www.incometaxindia.gov.in/Tutorials/Maintenance-of-Books-of-account.pdf
Illustration
Miss Khushali is a teacher. She does not know whether the provisions of section 44AA relating to maintenance of books of account are applicable to her or not. Hence, she approaches you for advice. As a consultant, advise Miss Khushali in this regard.
Solution
The provisions relating to maintenance of books of account can be classified as follows:
Provisions relating to a person engaged in specified profession.
Provisions relating to a person engaged in non-specified profession.
Provisions relating to a person engaged in business.
As per section 44AA and rule 6F, the profession of “Teacher” is a non-specified profession and, hence, the provisions of section 44AA are applicable to her and she is either liable to maintain such books of account and other documents as may enable the Assessing Officer to compute her taxable income under the Income-tax Act or would not be liable to maintain any books of account, depending upon the details of her gross receipts from such profession for the last three years immediately preceding the previous year.
Maintenance of Books of accounts by other Persons covered u/s 44AA (2): In relation to any other persons engaged in any other profession or carrying on any business other than section 44AA (1), the requirement of compulsory maintenance of books of accounts applies if- either the income from business or profession exceeds Rs 120000 or the turnover or gross receipts exceed Rs 10 Lakhs in any one of the three years immediately preceding the previous year.
So, I hope you would have understood the need of preparing P&L & BS in TEACHER's case.
Sir, probable solution given in the notice is as follows:
the part B of the P&L a/c and part B of the Balance Sheet(i.e No Account Case section) should be entered in the corrected return without which the return filed earlier is liable to be treated as invalid.
this point was confusing me whether I need to prepare balance sheet etc or not?
the part B of the P&L a/c and part B of the Balance Sheet(i.e No Account Case section) should be entered in the corrected return without which the return filed earlier is liable to be treated as invalid.
this point was confusing me whether I need to prepare balance sheet etc or not?
You've to file Form ITR 4S(not Form ITR 4) and no accounts are required to be maintained since "presumed income is considered" u/s 44AD.
It is assumed that gross receipts from teaching donot exceed Rs. 1 crore.
In IT e-filing website, you can agree with the defect, choose Form ITR 4S and upload Form ITR 4S XML file.
Hope this helps.
It is assumed that gross receipts from teaching donot exceed Rs. 1 crore.
In IT e-filing website, you can agree with the defect, choose Form ITR 4S and upload Form ITR 4S XML file.
Hope this helps.
@ Shivani: that is very clear than. File Part B of both and revise it.
Thankyou very much Rambhia Sir
Mr Shivam, I don't think ITR 4S has to be filed because she is a tuition teacher i.e professional. ITR 4S cannot be filed in case of a professional.
She does not maintain regular books of accounts. what is shown in her ITR are gross profit and net profit....no expense have been claimed. This profit is shown in column where no accounts being maintained by the assessee i.e point no 53 in profit and loss account.
She does not maintain regular books of accounts. what is shown in her ITR are gross profit and net profit....no expense have been claimed. This profit is shown in column where no accounts being maintained by the assessee i.e point no 53 in profit and loss account.
@ Shivani - 44AD covers eligible business and eligible business excludes only specified professionals mentioned in 44AA(1) and specified professionals does not cover tuition teachers.
Further, the new section 44ADA which extends presumptive taxation scheme to professionals covers only specified professionals u/s 44AA(1). This implies that other professionals like tuition teachers can use 44AD.
Although I admit the fact that the word eligible "business" is used and not "profession" in 44AD. However, as per my interpretation, 44AD covers tuition teachers and Form ITR 4S is required to be filed in your case.
Further, the new section 44ADA which extends presumptive taxation scheme to professionals covers only specified professionals u/s 44AA(1). This implies that other professionals like tuition teachers can use 44AD.
Although I admit the fact that the word eligible "business" is used and not "profession" in 44AD. However, as per my interpretation, 44AD covers tuition teachers and Form ITR 4S is required to be filed in your case.
@ Shivam Jain But the notice that I have received has error code 31...i.e Bal sheet and profit and loss account in case of regular books of accounts are not maintained.
I'm sure if ITR form needs to be changed then error code 31 will not be there.
I'm sure if ITR form needs to be changed then error code 31 will not be there.
@ Shivani - I think it's showing error code 31 due the the fact that you've filed Form ITR 4 and probably the system generates such error because some figures are missing in Form ITR 4.
What happened after that ? Was your rectified return accepted ?
I too have received similar notice.
i rectified the return furnishing balance sheet & profit and loss account and the return was accepted.
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