Defective return u/s 143(1)

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CA PRIYANSH SURYAWANSHI (M.Com M.A. Economics CA) (1294 Points)
Replied 24 December 2016

Dear Neha
First of all check WHAT IS THE ERROR CODE in the notice?
If its Error code 3 than file a return u/s 139(9) keeping all the amounts same, but show some cash balance in Balance sheet and enter 0 in sundry debtors etc.

If its error code 31 than you shall have to maintain books of accounts u/s 44AD. You have to file the return once again and this time Part A of B/S and P&L has to be filed.
IT Dept is correct.. if its error code 31 than check the last 3 IT returns you will come to know that in every year you would have shown income u/h PGBP and the income is more than 1.2 lakhs, and as per section 44AD this year you have to maintain books of accounts......

Best wishes

Sunny Delight (CA) (33 Points)
Replied 24 December 2016

Neha, you're advised to interpret meaning of term used u/s 44AD "no book of account required to be maintained'". Preparation and maintenance both doesn't come into the same definition.

Naveen Kumar Jain (Chartered Accountant) (640 Points)
Replied 25 December 2016

What about a person who opts for 44AD and has more than 1 house and capital gain? He has to file ITR 4 and then why is he required to provide details of B/S and P & L? Why the Return is treated as defective?, How can he revise his Return using ITR 4S?

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