Defective Return Notices

A notice that a return is “defective” looks like a request to tidy up a form. The consequence of ignoring it is far more serious. If the defect is not cured in time, the law treats the return as never having been filed at all. Interest, late fee, the loss of carried-forward losses and other consequences of non-filing can then follow. The reader’s difficulty is telling a genuine defect from a disagreement about income, and knowing the time allowed.

Which Act governs which years

Under section 536(2)© of the Income-tax Act, 2025, proceedings for any tax year beginning before 1 April 2026 continue under the Income-tax Act, 1961. That holds even for proceedings begun after that date. A return for assessment year 2026-27 or earlier is therefore tested under section 139(9) of the 1961 Act. A return for tax year 2026-27 onwards will be tested under section 263(7) of the 2025 Act, read with rule 166 of the Income-tax Rules, 2026.

Point	1961 Act	2025 Act
Notice of defect, 15 days to cure	s.139(9)	s.263(7)(a)
Uncured defect: return invalid	s.139(9)	s.263(7)(b)
Late cure condoned before assessment	proviso to s.139(9)	s.263(7)©
What counts as a defect	Explanation to s.139(9)	rule 166, Income-tax Rules, 2026
Returns filed under a s.119(2)(b) order	s.139(9A)	s.263(8)(a)

What the law treats as a defect

Under the 1961 Act, the Explanation to section 139(9) regards a return as defective “unless all the following conditions are fulfilled”. In summary, they are:

• the annexures, statements and columns for computing income under each head, gross total income and total income have been filled in (clause (a));
• a statement of the computation of tax payable accompanies the return (clause (b));
• the section 44AB audit report accompanies it, or has already been furnished (clause (bb));
• there is proof of tax deducted or collected at source, advance tax and self-assessment tax claimed (clause ©). The proviso to clause © rescues a return where the TDS or TCS certificate was not furnished to the filer and is produced within the two years allowed by section 155(14);
• for an updated return under section 139(8A), there is proof of payment of the tax required by section 140B (clause (ca));
• copies of accounts, partners’ or proprietor’s accounts, audited accounts and reports, or (where no books are kept) a statement of turnover, gross profit, expenses, net profit and key balances (clauses (d) to (f)).

The proviso to the Explanation lets the Board relax any of these conditions for a class of assessees by notification.

The 2025 Act takes a different approach. Section 263(7) treats a return as defective “if it is not in conformity with all the conditions as may be prescribed”. Rule 166(1) of the Income-tax Rules, 2026 then lists four situations, any one of which makes a return defective:

• all applicable fields, parts, schedules, statements and columns have not been filled in, including those for computing income under each head, gross total income and total income;
• in an auditable case, the audit report under section 63 was not furnished before the return;
• for an updated return under section 263(6), the details of tax payment under section 267 are not filled in;
• the brought-forward credit of minimum alternate tax or alternate minimum tax claimed does not match the credit allowed in the latest return.

Rule 166(2) keeps the Board’s power to exclude or modify any of these for classes of persons.

A defect notice concerns the form and completeness of the return. Whether an item of income is taxable, or a deduction is allowable, is not a defect. Those questions belong to processing, which is covered in the guide on section 143(1), or to scrutiny.

The time allowed, and what happens if it is missed

• Fifteen days. The Assessing Officer “may intimate the defect to the assessee and give him an opportunity to rectify the defect within a period of fifteen days from the date of such intimation”. The period may be extended “on an application made in this behalf” (section 139(9); section 263(7)(a)). The fifteen days run from the date of the intimation, not from its receipt.
• Invalid return. If the defect is not cured within that period or the extended period, “the return shall be treated as an invalid return and the provisions of this Act shall apply as if the assessee had failed to furnish the return” (section 139(9); section 263(7)(b)).
• Late cure. Where the defect is cured after the period but “before the assessment is made”, the Assessing Officer “may condone the delay and treat the return as a valid return” (proviso to section 139(9); section 263(7)©). The word is “may”: condonation is discretionary.

An invalid return carries the consequences of non-filing for that year:

• interest under section 234A (section 423 of the 2025 Act);
• the fee for late filing (section 234F of the 1961 Act; section 428 of the 2025 Act);
• losses cannot be carried forward if no return was filed by the due date;
• deductions that depend on a return filed by the due date are lost.

The time limits for a belated or revised return are discussed in Belated and Revised Returns.

What to have ready

• The defect notice: downloaded from the portal. It states the defect code or description and the date of issue.
• The return as filed and its JSON: from the filer’s account on the portal. The corrected return is a full replacement.
• The audit report and its acknowledgement, where the defect concerns the audit report. The report must already be on the portal.
• Challan details for advance tax, self-assessment tax or the tax on an updated return, from the challans or Form 26AS.
• TDS and TCS certificates, where the defect concerns credit claimed.
• The previous year’s return, where the defect concerns brought-forward minimum alternate tax or alternate minimum tax credit.

Responding on the portal

The e-filing portal’s user manual for e-Proceedings lists “Defective Notice u/s 139(9)” among the notices answered through that service. It describes the steps:

1. Log in and go to Pending Actions > e-Proceedings.
2. Select View Notice against the defective notice, and download it if needed.
3. Click Submit Response and select Agree or Disagree.
4. If the filer agrees: select the mode of response, select the ITR type, upload the corrected JSON file and submit.
5. If the filer disagrees: write the reason for disagreeing with the defect and submit.
6. Tick the declaration.

A Transaction ID is displayed and a confirmation is sent to the registered e-mail. According to the portal’s FAQs, a response cannot be edited after submission. For CPC notices, the Submit option is disabled once the response due date has passed.

The corrected return is verified like any return. See E-Verifying a Return.

What can and cannot be done after the notice

• Curing the defect is not a revision. The corrected return replaces the defective one for this purpose. A revised return under section 139(5) is a separate remedy with its own time limit.
• Disagreeing does not stop the clock. If the Assessing Officer does not accept the disagreement, the statutory consequence still follows once the time has run. Asking for an extension under the words “such further period” keeps the position open.
• After assessment, condonation is no longer available. The proviso is limited to a cure made “before the assessment is made”.

Summary

1. Identify the Act. For assessment year 2026-27 and earlier it is section 139(9) of the 1961 Act. For tax year 2026-27 onwards it is section 263(7) of the 2025 Act with rule 166.
2. Read the notice and confirm that the stated defect falls within the Explanation (1961) or rule 166 (2025).
3. Within fifteen days of the notice’s date, either upload a corrected return through e-Proceedings or record a reasoned disagreement. Apply for more time if needed.
4. Verify the corrected return.
5. If the time has passed, cure the defect before assessment and ask for condonation under the proviso.

The next guide in this set covers faceless scrutiny assessment.