An assessee works on a contractual basis as a consultant providing marketing and promotion related services with TDS being deducted u/s 194J. He had filed ITR4 and shown income u/s 44ADA (as a technical consultant) with nature of business as consultancy service, code 703. Now he received a defective return notice saying the following-
Error code is 89- The provisions of Section 44ADA not applicable to the taxpayer. The nature of business code in Sch NOB is not a profession, and the income disclosed under Section 44ADA income is more than zero. Hence the provisions of Section 44ADA is not applicable to the taxpayer. Probable resolution given is : The provisions of Section 44ADA is applicable only to Professionals with nature of business codes of 601 to 607.Taxpayer is requested to furnish correct Return Form type,i.e.ITR- 3 or ITR- 5 as applicable. If the Income has been disclosed under incorrect Section, the correct Section of the Schedule BP may be filled. If the Nature of Business code entered in the Return filed is not correct, the correct nature of business Code may be entered in the Sch NOB and the Corrected Return may be filed.
Now should he use the code 607 as professional others or should he file return u/s 44AD? The assessee is a masters graduate in marketing and PR and does not hold any professional qualification.
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