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Barkha (None)     12 May 2021

Return is defective

Received notification

"The return of income filed by you as per the above details is considered as defective with-in the meaning of section 139(9) of the IT Act for the following reason:

Taxpayer is offering Income under the head Profits and gains from Business or Profession. Hence, as per the provisions of Sec.44AA, the taxpayer is required to maintain books of accounts. However, as seen from the return, the taxpayer has not filled up Part A of the Profit and Loss Account and Balance Sheet. Further, income from business has not been offered under presumptive taxation, if eligible."

Income reported in ITR3 is 16,75,000 with business code 16019

What to do, please advise



 35 Replies

Raghavendra Kamath

Raghavendra Kamath   12 May 2021

Every 9 out of 10 has received it. refile with 44AD
Barkha

Barkha (None)     12 May 2021

Which category? I am a freelance translator. Can't find the appropriate code for 44AD

Raghavendra Kamath

Raghavendra Kamath   12 May 2021

No need to mention code for 44ad filing
Barkha

Barkha (None)     12 May 2021

But 44ada requires filling section 62 in ITR 3. Without code, form counts it as error. Or are you saying that ITR4 needs to be filled now?

Raghavendra Kamath

Raghavendra Kamath   12 May 2021

Check thoroughly itr3 doesn't require business code for 44ad.
1 Like
Sourav

Sourav (Student)     12 May 2021

Agree with Kamath
Raghavendra Kamath

Raghavendra Kamath   12 May 2021

Use schema of IT dept. you will find there. Avoid using ready software
sabyasachi mukherjee

sabyasachi mukherjee   12 May 2021

The notice says there is inconsistency .
The profit loss account and balance sheet is not audited.
Get your accounts signed by a certified accountant or authenticated .
Then file a revised return in response the notice received from the Income tax department.
Barkha

Barkha (None)     12 May 2021

I am using the ITR3 excel utility. But the question is if I say "Yes" to "Whether assessee is declaring income only under section 44AE/44B/44BB/44AD/44ADA/44BBA/44BBB " on the General tab, then I am supposed to fill "COMPUTATION OF PRESUMPTIVE INCOME FROM PROFESSIONS UNDER SECTION 44ADA " on the Profit and Loss tab. And if I fill this, ITR3 asks for a business code or doesn't proceed.

 

Barkha

Barkha (None)     12 May 2021

Originally posted by : sabyasachi mukherjee
The notice says there is inconsistency .The profit loss account and balance sheet is not audited.Get your accounts signed by a certified accountant or authenticated .Then file a revised return in response the notice received from the Income tax department.

But my total gross receipts were around 16 lakhs and as far as I understand I don't need to maintain accounts book or an audit is not required.. So, I am not sure why the IT dept is asking me for this?

Raghavendra Kamath

Raghavendra Kamath   12 May 2021

Gross receipts may be < 20L but income if it is > 2.50L provisions of 44Aa is attracted
sabyasachi mukherjee

sabyasachi mukherjee   12 May 2021

Since in the query you hv not mentioned anything about the details of turnover.
In any case if you forward the details , I can certainly advise you future course of action.
Compare the details with your accounts prepared.
I am a qualified accountant and hv relevant experience in filing returns.
veerendar singh

veerendar singh (tax consultant)     12 May 2021

This time cpc has got very vigorous with these kinds of errors. many erroneous practices will have to be now stopped. in each case we have to carefully examine applicability and requirements of 44aa, 44ab, 44ad and 44ada
Barkha

Barkha (None)     12 May 2021

Originally posted by : Raghavendra Kamath
Gross receipts may be 2.50L provisions of 44Aa is attracted

In that 44ADA seems to be best option because I don't have books of account maintained or an audit. Will need to keep this in mind from this year. But as I said in a previous message, if I say "Yes" to "Whether assessee is declaring income only under section 44AE/44B/44BB/44AD/44ADA/44BBA/44BBB " on the General tab, then I am supposed to fill "COMPUTATION OF PRESUMPTIVE INCOME FROM PROFESSIONS UNDER SECTION 44ADA " on the Profit and Loss tab. And if I fill this, ITR3 asks for a business code or doesn't proceed.

 


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