Notice u/s 139(9) of Income Tax: Error code 202

Its self-explanatory....

The gross income offered to tax in the ITR doesn't match with the gross income shown in form 26AS, over which the TDS has been deducted.

So, either reconcile the income offered to tax in ITR as to that of form 26AS; or if there is any mistake by deductor, ask the deductor to rectify the same.

I have got the same Notice u/s 139(9) Error Code 202 for AY:2019-20 (FY: 2018-19).

However, the issue is, I am a Works Contractor & as per conditions of our agreements with Departments/ Local Authorities/ Municipalities, our tendered rates are inclusive of any & all GST.

C/SGST rate of tax on Works Contract is 12% in Delhi.

So, while filing monthy/quarterly GST returns as well as ITR-4 for AY:2019-20 (FY: 2018-19), I have bifurcated GST @ 12% from Gross Amounts paid since as mentioned above, my quoted rates are inclusive of GST as per agreement.

For example, for a Gross Payment of Rs.1,00,000/-, I have bifurcated it to Rs.89,286/- (Taxable amount) + Rs.10,714/- (GST @ 12% on Rs.89,286/-) = Rs. 1,00,000/-.

However, the Departments where I have executed such Works Contracts deduct GST TDS as well as Income Tax TDS on Gross amount of Rs.1,00,000/-.

So, naturally, there will be a mismatch between Turnover Details in Form 26AS & ITR-4. Form 26AS shows Turnover of Rs.1,00,000/- whereas GST returns as well as ITR-4 will show Turnover of Rs.89,286/-.

The Departments/ Local Authorities/ Municipalities have refused to revise their TDS returns.

Kindly suggest how should I proceed with this.

As you have filed return under presumptive assessment (sec. 44AD); you have to consider the gross amount as turnover (i.e. inclusive of GST). In the present example, offer tax over 1 lakh...

But if I offer Income Tax over gross amount of Rs. 1 Lakh, then my GST returns would not tally with my Income Tax return & I would be considered a GST defaulter..

And if I revise my GST returns, I would have to pay GST + Penalty + Tax over an amount that I never got.

Not to mention I would also have to pay Income Tax over amounts that I never got if I revise my Income Tax return.

What should I do?? This is like a catch 22 situation.

Actually, there is no difference for GST return, as the GST department itself has quoted the figure...

But you have to rectify it for IT return as it has been suggested. Had you filed ITR with normal assessment the difference would have been clarified in it; but for presumptive assessment these anomaly  remains for all the assessees; till the same is sorted out by both the tax authorities together.

Thanks for the reply Sir. Appreciate it.

I had deducted hra from gross income and put while while filing return. Now i got a 139(9) intimation as gross income doesn't match with that of 26 AS. Should i put the details whatever there in form 16 and do send the revised return? please suggest otherwise