Category A Defect in Filed ITR 5 - Seeking Guidance

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A user encountered a Category A defect in their filed ITR 5 return, despite the e-filing utility allowing submission. The defect relates to not correctly filling 'No books of accounts' details in the Balance Sheet and P&L sections when not maintaining accounts under section 44AA. The user is seeking clarification on whether the return will be processed or rejected and if a revised return is necessary, also questioning discrepancies between utility and validation rule release dates.

k chakraborty

k chakraborty (Querist)
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07 July 2024 I prepared and uploaded my ITR 5 return using ITD e-Filing-DU-v1.1.1., downloaded from https://www.incometax.gov.in/iec/foportal/downloads/income-tax-returns#itr-5, However, upon reviewing the filed return for validation compliance, I noticed a Category A defect. Despite this, the utility allowed me to upload, verify, and submit the return.

Specifically, according to ITR 5 - Validation rules for AY 2024-25 (version 1.0), Table 2: Category A Rules, Sl. No. 12, I should have filled in "No books of accounts in Balance sheet and P&L" since I selected "No" for maintaining accounts as per section 44AA. Nevertheless, neither the utility nor the e-filing portal detected this error.

I'm concerned about the next steps and seek your guidance. Please verify whether the filed return will be processed by CPC or rejected. Additionally, suggest whether I should file a revised return to rectify this defect.

Further, I'd like to bring to your attention that the utility version released on 05/07/24 is later than the release date of ITR 5 - Validation rules for AY 2024-25 (version 1.0) on 31-May-2024. Should I presume that the utility is following updated validation rules not yet publicly released? This concern arises from the fact that the preface of the validation rules mentions that these rules are intended for commercial software, whereas I used the income tax department's utility.

Please clarify this discrepancy and advise me on the best course of action.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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07 July 2024 As such you need to fill the details as required in 'No Account Case' of P&L acc and Schedule BS.
So, download the latest version of utility ver. 1.1.1 from the efiling site and revise the return, to avoid any defective notice.

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k chakraborty

k chakraborty (Querist)
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07 July 2024 actually this happened using the latest version of the desktop utility available on income tax portal site.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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07 July 2024 It is just an warning massage. If you have filled the details in these tabs, then do no worry, otherwise revise it.

k chakraborty

k chakraborty (Querist)
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07 July 2024 Actually i filled full BS and p&l, no account cases left blank. though No is selected for "whether liable to maintain books under 44AA"

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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07 July 2024 That seems to be reason. Either select books maintained, or fill the details in 'No Account Case' columns...

k chakraborty

k chakraborty (Querist)
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07 July 2024 sir, just to clarify, the return was actually successfully uploaded and verfied, my fear is as i have unintentionally subverted a condition specified in validation rule, ideally which should have prevented me from uploading the return, would this return be rejected

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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07 July 2024 It may not be rejected, but you may get defective notice u/s. 139(9) IT act. (most probably within 4/5 working days)
If do not receive it, it will be accepted without any defect.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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26 August 2024 Good luck.

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