Received a notice under section 139(9) for defective returns
I have received a notice from IT department for having filed defective return for AY 2016-17. The notice says: Error Code 86
As per Section 44AD(6) of the Income Tax Act, 1961, the provisions of Sec.44AD are not applicable to – (1) persons carrying on professions that are referred to in Sec.44AA(1), (2) persons earning income in the nature of commission or brokerage, and (3) persons carrying on any agency business. As seen from the return of income filed, the nature of business code mentioned is which falls in the categories mentioned above. Hence, the provisions of Sec.44AD are not applicable, in your case.
Possible resolution: As the provisions of Section 44AD are not applicable, in your case, the claim of computing profits and gains of business on presumptive basis, under this special provision is not allowable. Hence, the above defect has to be corrected by way of computing the profits and gains of business under the normal provisions and not under Sec.44AD and offering the same.
I am a salaried employee and sometimes I work as a consultant also and the organizations pay me after deducting 10% TDS. I have filed ITR 4 and show my consultant income in that. For all previous year the return was processed but for this year they have sent the notice. Please let me know what am I missing.