Regarding notice under section 139(9)

If you are availing benefit u/s 44AD, then you need to file ITR4S (not ITR5)

BUT IT IS A FIRM SO ITR-5 HAS TO BE SEND

ITR5 to be used when you don't avail benefits of 44AD.

1. section 44AD clearly mentions that “UNDER SECTION 44AD,INCOME WOULD BE PRESUMED TO BE 8% OF THE TOTAL TURNOVER OF THE ASSESSEE,ONLY IF THE TOTAL TURNOVER OF THE ASSESSEE IS LESS THEN RS 1 CRORE”.

               NOW SINCE IT IS A FIRM THE SOFTWARE AUTOMATICALLY GOES TO ITR-5 .

LAST YEAR I FILED IN THE SAME MANNER AND NO NOTICE WAS SERVED.

@ Poornima:

ITR4S is applicable for only individual and huf and not for partnership firms claiming presumptive income from business. For partnership firms, you compulsorily need to fill itr5. Also itr4s is not applicable to individual and huf who are earning exempt income more than 5000/-. In that case they are required to fill itr4 compulsorily.

@ Mukesh Kuriyal:

Have you filled the p&l schedule - no account case. And the balancesheet schedule - no account case. If not filled, fill it up and upload the changes. Also check the notice properly, was this the sole defect., update accordingly

P/l needs to be filled and filed as in case of firm from the presumptive rate partners salary and interest can be deducted and calculation for the same p/l is needed. Kindly fill the p/l and file.

Can you please quote the income tax act regarding what you mentioned Where for filing the return of a firm, taking presumptive business under section 44 AD you have to fill the P & L account. I need the act.. Thanks

@ Mukesh:

Whom is it addressed to? If its addressed to me, read the instructions  for filling of itr5. It is mandatory to fill p&l and balancesheet schedule - no account case where books of accounts are not maintained (i.e if you are claiming presumptive income) 

But if you have maintained books or you are not claiming presumptive taxation or required to maintain books of accounts as per sec44AA, then you need to fill actual p&l

In either case, p&l and balancesheet schedule is required to be filed

It depends which case you belong to. ( Here it seems you are falling under no account case. Hence fill that accordingly)

Sorry, I misinterpreted the provisions. @ Rinkal: Thanks for pointing out the error.

@ Rinkal.. I just want to know that under which section of income tax act I am liable to send P& L account if I am considering my business under section 44AD (Presumptive business) and I m showing my partners interest, profit share ratio,Remuneration etc... And the turn over is just 36 lakhs and the business is of retail sale of medicines. I need the act of income tax..

@ Mukesh:

I m not telling you to file p&l account. But instead telling you to submit p&l schedule - no account case. But you need to provide basic details of turnover and total expenses claimed. So that AO can assess your case accordingly.

And for that you can refer section 44AA read with 44AD and 44AB. Regarding format of itr, you need to refer instructions related to that itr. That are not given in any section of income tax act

@ Poornima:

That's OK. Mistakes happen. We are human beings at last.

@ Rinker Why should anybody go what are the instructions in ITR-5?? I suppose when ever we go to assessing officer he ask for the ACT rather than instructions how to fill ITR-5.. MY submission is very clear my assessee is a firm and he is having a retail business which I have considered US 44 AD.I have shown interest,profit share ratio, Remuneration etc etc... So which section of IT ACT says that "PRESUMPTIVE BUSINESS WHICH IS COVERED UNDER SEC 44AD IF ITS A FIRM P&L ACCOUNT WITH BALANCESHEET IS MUST" What instructions say they must be according to the act???? Thanks Rinkal

For your kind information, instructions to fill the itr are also issued by cbdt only along with itr which are notified on a year on year basis. When you are filling an itr, they have presumed that you have read the instructions as well. 

With your permission, Can I ask you 1 question?

You must have filled nature of business schedule also. Or you said you have filled psr details. Why did you fill that? Was that mentioned in any section of the act that you filled it. 

The answer to it is no. Just in similar manner, you are required to fill basic details to enable the AO to assess your case.

How will the AO come to know what are your gross receipts and have you claimed 8% and above income or below 8% income. For that purpose basic details are required like gross receipts/ turnover, total expenses claimed only in case of p&l. Because if turnover exceeds 1 cr or income is discloses below 8% then the assessee is subjected to tax audit.

If you go by the section 44AD of the act, it says gross receipts or turnover which you have not disclosed anywhere in your return. When you are opting for presumptive taxation, the fundamental rule is that your turnover should not exceed 1 cr. How can 1 say that he has opted for 44AD when turnover, the basic details is only missing in the itr

And I m not telling you to maintain books or fill p&l account, what I m telling is where an assessee has business income and has turnover less than 1 cr, then he has an option not to maintain books and claim 8% or above of gross receipts or turnover. And in such case required to fill no account case. I.e you have not maintained books and just have details of turnover, total expenses incurred, total debtors, cash balance, total creditors etc. In that case, each and every single item of expense is not required to be given.

In context to itr, I m talking to fill row 54 of p&l schedule. There are two seperate parts - 1-53 of p&l to be filled by either who is liable for tax audit or who are liable to maintain books. Row 54 has to be filled by those persons who have opted for presumptive taxation. Similarly Part c of balance sheet schedule has to be filled by those persons who has opted for presumptive taxation. They are not required to fill Part a or b of balancesheet schedule.

And as per the notice issued to you, it must have been said to fill p&l account schedule and not give p&l account. I.e fill no account case details of p&l schedule to be more precise. Also fill no account case of balancesheet schedule also to avoid any further tax notices. 

Also please get it done within the time prescribed of 15 days as it is likely if you don't respond to the notice and do according to the notice, it may presume that return is invalid and not filed for the said year

Hope you find it in order.