Technical Issues in Income Tax Returns Processing has put Taxpayers in Trouble

The Goa Chamber of Commerce and Industry (GCCI) has urged the Union Ministry of Finance to provide a clarification and expedite the resolution of the erroneous processing, as well as facilitate the smooth filing of Income Tax Returns by Goan taxpayers as soon as possible.

The GCCI has written to the Union Finance Minister, the Principal Income Tax Commissioner of Bangalore, and the Income Tax Commissioner of Goa regarding notices received by Goan taxpayers submitting returns under Section 5A of the Income Tax Act under the Portuguese Civil Code.

As per the Chamber, many taxpayers in the state who filed their income tax returns for the financial year 2023-24 recently received a message from the Income Tax Department claiming that their return is defective.

The Income Tax Department notified the reason for the defect is that the taxpayer/spouse is subject to an audit under Section 44AB but has not filed an audit report. If the defect is not remedied within the specified time frame, the income return will be considered invalid.

The GCCI has indicated that due to incorrect return processing, many taxpayers are receiving defective return notices when they do not need to file the audit report.

This error in the electronic processing of Income Tax Returns is causing unnecessary problems because taxpayers are now required to respond to this defective return and spend too much time on the matter in order to avoid their returns being invalid, it stated.

Even if the taxpayer agrees with the defect, the only way to resolve it is to file the spouse’s audit report. The taxpayer has no alternative choice to correct the error in the return.

Furthermore, many of these defective notices were received during the festive season of Diwali, causing anguish among taxpayers and professionals in the state. The GCCI has asked the Income Tax Department not to contact taxpayers during non-business hours or on holidays.