Section 10(5) of the Income Tax Act
The decision most relied on for Section 10(5) is DIT (E) v. Apparel Export Promotion Council (245 ITR 492), cited in 193 of the 45 judgments on BharatTax that turn on this section.
Leading authorities on Section 10(5)
The rule of consistency applies when facts or legal positions remain unchanged in earlier assessment years, preventing the Revenue from adopting a divergent stance in subsequent years without new material. This ensures stability and predictability in tax assessments.
Section 201 is attracted only when an employer fails to deduct or pay tax on employee salaries as required by the Act. An employer has a duty to make an honest and fair estimate of the employee's tax liability when deducting TDS on salary income.
An employer is not an 'assessee in default' under Section 201(1) if short or non-deduction of TDS on employee salaries or exempt income was due to a bona fide belief. The Assessing Officer must compute TDS liability based on the employee's actual income, and no interest under Section 201(1A) is leviable when such a bona fide belief exists.
An employer is not statutorily obligated to collect evidence from employees regarding the actual utilization of amounts paid towards leave travel concession or conveyance allowance, unless specific requirements are mandated by law or a CBDT circular.
An assessee is required to deduct tax at source on reimbursements, even if the assessee acted under a bona fide belief that such reimbursements were exempt.
Judgments on Section 10(5)
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