Response to notice u/s 139(9)

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Naveen Kumar Jain

Chartered Accountant

641 Points Joined April 2008

CPC has declared ITR 4 (Revised Return ) for AY 2012-13 as defective under sec 139(9) on following grounds:

1 error code 23 --Where assessee furnish total of amount deducted in Sl.no.2,3,4 and 5 of Schedule BP should be consistent with Total credits in the P and L Slno.5

As the ITR was for a case where Books of account were not maintained (individual), no figures were entered in sl no. 2,3,4,and 5 of schedule BP (they are zeros) and total credits in P&L sl no 5 are also zero. Only serial no 51 of P & L were filled. Please advise how can I correct this defect?

2. Error code 14 -- Assessee entering negative amount in gross profit or net profit.

Here I only filled figures in sl no 51 a,b and c (Gross receipts, gross profit and expenses). Net profit is a negative figure computed by the excel utility. The solution provided in notice u/s 139 (9) is Assessee is required to furnish all the details in the Part B of Part A - P and L

However there is no part B of Part A of P &L in the excel utility. So how do I provide whatever details are required - I do not even know what details they are wanting. I seek advice from members how to rectify this defect

3 error code 30 --In schedule BP, assessee claiming expenses equal to the business income.

I have not entered any figure in BP -- it is all computed by excel utility from figures in sl no 51 of PartA of P&L and Schedule DEP. So how can I correct it?

I also have a query whether I am allowed to once again revise my Return and modify the figures by foregoing a small loss? Can I file a revised return after receiving a notice u/s 139(9) so as to avoid the defects rather than rectifying the same?

Other alternative is that I file a fresh return after prescribed period of 15 days when present return will be treated as invalid for no response. What is your suggestion please?

I also wish to know , apart from online e-filing of revised return in response to 139(9) is there any way to contact CPC CIT (who has issued the Notice) either on e-mail or post to seek such clarifications?

Replies (35)

rajesh sharma

retired

142 Points Joined June 2011

I also received exactly the same notice. I do future trading in shares and reported loss and I too filled up exactly the same columns. Though I am not CA, but I too wish to know what the solution is? Kindly keep me posted if you get any information. email: rsat195 @ gmail.com

Arun Bhatt

Project Manager

26 Points Joined June 2013

I too have received the same kind of notice for filling the loss in derivatives (futures & options) trading. Please let me know the solution for the same.

Thanks,

Arun

GD

55 Points Joined January 2012

Hello Folks... I and two others here have received the same circular. While ITO accepted ITR4 for FNO and Equity investing last year and even issued refund, this year this circular indicates there is a change in their stand. We called up the helpline and were asked to fill up ITR-2 instead of ITR-4. When asked where to specify FNO and Equity details... he said he doesnt have the answer to that question.

Sl.No - Error Code - Error Descripttion - "PROBABLE RESOLUTION"

1 - 23 - Where assessee furnish total of amount deducted in Sl.no.2,3,4 and 5 of Schedule BP should be consistent with Total credits in the P and L Sl no.5

2 - 32 - Assessee has claimed loss under the head “Profits and gains of Business or Profession”; however, he has not filled Balance Sheet and Profit and Loss Account and has not got the books of account audited

3 - 14 - Assessee is entering negative amount is gross profit or net profit without giving details in Part B of P and L. In Sl. No. 51b and 51d. - "Assessee is required to furnish all the details in the Part B of Part A - P and L in the new xml which will be filed in response to this communication."

If anyone figures out what needs to be modified, it would be great!

Regards,

Naveen Kumar Jain

Chartered Accountant

641 Points Joined April 2008

It seems this is a general problem in situations where a loss figure is posted and books of account are not kept.

Since it is not known how to rectify the defect pointed out by authorities, will it be in order to revise the return in ITR2 which may also have the impact of changing total income? Can revised return, modifying total income be filed in response to Notice u/s 139(9)? Please suggest.

KR

SDM

33 Points Joined June 2013

I've also received the exact same notice with the 3 error codes mentioned by GD above. When I called up efiling helpdesk today, initially, he said it was erroneously sent to many people and will be corrected soon. However, when I told him that the notice period has a due date of 15 days (received it in email yesterday although the notice date mentioned in the pdf is last week which means only 1 more week left to file rectified return), he asked me to wait until Monday and download the latest version of excel utility which they are going to release to calculate and file the rectified return which will take care of some of the issues. I don't really know if that will really solve all the issues, but really hoping they are going to release the latest version on Monday which will address the major issue i'm facing with PartB-TI since it's not automatically updating "Profit and gains from business or profession" which should actually pull the information from A37 of Schedule BP(we cannot manually change that in the excel tool utility).This might actually solve the error code 14 issue. Anyone currently facing issue with PartB-TI (3i,3ii,3iii) not automatically updating data from schedule BP? Thanks KR

Naveen Kumar Jain

Chartered Accountant

641 Points Joined April 2008

The figures in Part B - TI are pulled from schedule BFLA and not directly from A 37 of BP. Figures from BP go to CYLA and then to BFLA and then to Part B - TI. Part B - TI will show only positive figures. Any loss is adjusted in Cyla- BFLA and any unadjusted loss is carried over in Schedule CFL

The problem is the errors pointed out by CPC are not visible in excel utility, nor there is any Part B of Part A - P&L, which CPC is referring to in their Notice.

ajayy

54 Points Joined July 2010

hii guys

Even i have received the same notice of defective return u/s 139(9) error code 14 only?

what shud i do? I had filled columns 51 b only and iit had comuted 51 d itself.

what in case we r unable to file the rectified return in 15 days and itbecomes invalid.

Does it carries some penalty?

can anybody plz help

Chetan

PgM

36 Points Joined March 2013

Dear all - I have recieved a rectification notice under sec 139 (9) for AY 12 -13

Background - Salaried professional also trading in F&O. Return filed using ITR4.

Error codes:

1. error code 30 - "In schedule BP, assessee claiming expenses equal to the business income". All fields are taken automatically from the file

Field 1 - Item 51d from Part A of P&L

Field 2i - I had a loss in day trading, I have identified it here

Field 23 - Should I fill this with my salary numbers? Its part of form 16 and I have detailed it in other places

2. error code 14 - "Assessee entering negative amount in gross profit or net profit". Further it mentions " Assessee is entering negative amount is gross profit or net profit without giving details in Part B of P and L. In Sl. No. 51b and 51d. I have mentioned the detail in the Sl no 51b and 51d.

3. error code 23 - "Where assessee furnish total of amount deducted in Sl.no.2,3,4 and 5 of Schedule BP should be consistent with Total credits in the P and L Slno.5". I have not maintained book of accounts so not sure why they are asking for these details.

4. error code 32 - "Assessee has claimed loss under the head “Profits and gains of Business or Profession”; however,he has not filled Balance Sheet and Profit and Loss Account and has not got the books of account audited". The total trading turnover is less then 2 lacs, I guess audting is not required.

Please help me as I am not very sure what to do and my tax consultant is on vaccation

rajesh sharma

retired

142 Points Joined June 2011

This seems to be problem faced by persons who have declared loss in business (due to trading in F&O). Has anybody's assessment been declared OK by CPC Bangalore who e-filed ITR4 for AY2012-13 & reported business loss due to trading in F&O. It will be very kind of such a person to upload his excel file (he can delete his personal details before uploading the file). There will be many people who will benefit from his/her gesture. please make urgent because rectification needs to be filed within next week.

Anil

Sec

29 Points Joined May 2013

My wife too got the identical notice with errors 14,23,32. Same FnO trading loss case. Just got the books of account made and audited by the CA. Spent 6000/-. Will wait 1-2 days to see if there's any update before I submit the revised return with Audit under Sec 44AB. Didn't find this thread earlier, otherwise would have waited on the audit. BTW, there are few CAs who confirm that books need to be audited in reporting business loss in ITR-4. Anybody with futher clarifications, please post in everyone's interest.

GD

55 Points Joined January 2012

Hello...

Here is my logic for not getting a tax audit done and entering my details in Part P&L-"No account case" 51, 52, 53 - my gross receipts(51) derivative turnover (total sell + total buy) + cash sales add up to less than Rs. 40 lacs. Since I had a loss, I entered a negative figure in gross profits (52)

There are supporting threads here:

/experts/f-o-transactions-turnover-for-sec-44ab--122521.asp

/experts/income-of-future-and-option-6501.asp

However I came across another thread, which says that if tax audit is not applicable u/s 44AB, then 44AD applies (/experts/applicability-of-sec-44ab-1277744.asp), which likely means that Sched BP-A-33(i) needs to be filled, but this cell doesnt allow negative value, although Sched BP-A-4 which gets auto-populated to include data entered in Sched BP-A-33(i) mentions "Profit or loss".

So not sure what needs to be done about Section 44AD... any comments on this one?

Many Thanks!

(PS: I called the CPC helpline 18004252229 today and he said, if you think your return is correct, file the original one back again.. thats the only way out. I said that is a very generic/arbitrary solution & asked if other people are also reporting this... he said many people have reported, without commenting further)

Anil

Sec

29 Points Joined May 2013

I know there are conflicting views on the interpretation of Audit criteria. Have a look at this one: https://trak.in/tags/business/2012/07/09/tax-return-filing-futures-options-fo-trades/

Naveen Kumar Jain

Chartered Accountant

641 Points Joined April 2008

A friend of mine was in service and he had 3 months salary income, when he resigned and started his consultancy as professional. During 2011-12 he had small business income, but had to incurr larger expenses trying to establish, resulting in business loss. He did not keep all books of account but filed his return taking income and expenses by analysing his bank account where whatever income he could generate was banked and all major expenses were through bank or credit card. He mentioned gross receipts and expenses in sl 51 of P &L, net figure being net loss which excel utility auto calculated.

He has also received Notice u/s 139(9) with same clauses i.e. 14, 23 etc. It does not fall in tax audit case. It is professional loss (not a case of trading) where rule of 8% will apply.

What should he do? Can he file ITR 2 now in response to 139(9) ignoring business loss, or taking it in Income from other sources (loss)? or as some one suggested, refile original return with out any change in response to sec 139(9) notice?

Any views please?