Section 10(5) of the Income Tax Act

Income-tax Act, 2025: s.11

Section 10(5) falls under section 10 of the Income-tax Act, 1961, which corresponds to section 11 (Incomes not included in total income) of the Income-tax Act, 2025.

Read section 11 of the 2025 Act

Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.

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 285 judgments on BharatTax that turn on this section.

Leading authorities on Section 10(5)

DIT (E) v. Apparel Export Promotion Council
245 ITR 492 · 2000 · High Court
193
citing judgments

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.

254 ITR 121 (Guj) ITO v. Gujarat Narmada Valley Fertilizers Co. Ltd.
243 ITR 435 · 2000 · High Court
173
citing judgments
247 ITR 305 (Guj) CIT v. Nestle India Ltd.
140 ITR 832 · 1983 · High Court
172
citing judgments

An employer is not in default under section 201 if they have made a bona fide estimate of employee income and deducted tax at source based on that estimate.

CIT vs. Nicholas Piramal India Ltd (2008) 299 ITR 0356 (BOMBAY); CIT v. Semiconductor Complex Ltd.
282 ITR 263 · 2006 · High Court
159
citing judgments

An employer making a bona fide estimate of taxable salary income is acting in accordance with established legal precedent.

CIT v. ITI Ltd.
313 ITR 1 · 2009 · Supreme Court
142
citing judgments

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.

State Bank of India v. Assistant Commissioner of Income-tax
144 Taxmann.com 131 · 2022 · Supreme Court
35
citing judgments

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.

CIT v. Alstom Projects India Ltd.
394 ITR 141 · 2017 · High Court
18
citing judgments

The Transfer Pricing Officer (TPO) lacks jurisdiction to propose adjustments on transactions with unrelated third parties, as Chapter X provisions apply only to specified domestic transactions.

(para 6). (b) Hero MotoCorp Ltd. v. Additional CIT, Range-12, New Delhi
156 TTJ 139 · 2013 · ITAT
14
citing judgments

Payments for sponsorship rights, such as title sponsorship or being an "Official Partner" of an event, are not considered royalty income for the use of trademarks or brand names under Section 9(1)(vi). Consequently, withholding tax obligations under Section 195 may not apply to such payments.

India Vs Assistant Commissioner of Income of India v. Assistant Commissioner of Income-tax, TDS
123 Taxmann.com 447 · 2021 · Reported
13
citing judgments

An assessee cannot be held in default for non-deduction of TDS if they held a bona fide belief that tax was not deductible on certain reimbursements, especially when the issue concerns LFC reimbursements to employees.

Lifestyle International (P.) Ltd. v. Assistant Commissioner of Income-tax
141 Taxmann.com 559 · 2022 · Reported
12
citing judgments

Orders passed under section 201(1)/201(1A) of the Income-tax Act are only applicable for financial year 2014-15 onwards and not for any prior financial year, as they are time-barred. Consequently, proceedings flowing from invalid orders are annulled.

Judgments on Section 10(5)

State Bank of India, Chennai vs. ACIT TDS, Chennai

In the result, the appeal filed by the assessee is dismissed

ITA 1465/CHNY/2024[2015-16]Status: DisposedITAT Chennai27 Jun 2025AY 2015-16

Bench: Shri S.S. Viswanethra Ravi & Shri Jagadishआयकर अपील सं./I.T.A. No.1465/Chny/2024 िनधा"रण वष"/Assessment Year: 2015-16 State Bank Of India Vs. The Assistant Commissioner Of Industrial Finance Branch, Income Tax, 103, Mount Road, Chennai 600 002. Tds Circle 3(1), [Tan:Ches02510E] Chennai. (अपीलाथ"/Appellant) (""थ"/Respondent) अपीलाथ" की ओर से / Appellant By : Ms. G. Vardini Karthik, Advocate (Virtual) ""थ" की ओर से/Respondent By : Shri N. Madan Kumar, Jcit सुनवाई की तारीख/ Date Of Hearing : 02.04.2025 घोषणा की तारीख /Date Of Pronouncement : 27.06.2025 आदेश /O R D E R Per S.S. Viswanethra Ravi: This Appeal Filed By The Assessee Is Directed Against The Order Dated 21.03.2024 Passed By The Addl/Jcit(1)-1, Coimbatore For The Assessment Year 2015-16. 2. The Assessee Raised 17 Grounds Of Appeal, Amongst Which, The Only Issue Emanates For Our Consideration As To Whether The Ld. Cit(A) Is Justified In Confirming The Order Passed Under Section 201/201(1A) Of The Income Tax Act, 1961 [“Act” In Short] In The Facts & Circumstances Of The Case.

For Appellant: Ms. G. Vardini Karthik, Advocate (virtual)For Respondent: Shri N. Madan Kumar, JCIT
Section 10(5)Section 192BSection 201

State Bank of India Linking Road, Mumbai vs. Assistant Comissioner of Income Tax-TDS2(2), Mumbai

In the result, the appeal of the assessee is allowed

ITA 2886/MUM/2024[2016-17]Status: DisposedITAT Mumbai30 May 2025AY 2016-17

Bench: Shri Sandeep Gosain & Smt. Renu Jauhriआयकर अपील सं./Ita No. 2887/Mum/2024 (निर्धारण वर्ष / Assessment Year :2016-17) State Bank Of India Administrative Officer West Mumbai Branch B Wing, Lic Complex, 1St Floor, Jeevan Seva Annex Building, S. V. Road, Santracruz (W.), Mumbai- 400054 V/S. बनाम Acit-Tds 2(2), Mumbai 3Rd Floor Cumballa Hill Mtnl Te Building, Pedder Road, Dr. Gopalrao Deshmukh Marg, Cumballa Hill, Mumbai-400026 स्थायी लेखा सं./जीआइआर सं./Pan/Gir No: Aaacs8577K Appellant/अपीलार्थी .. Respondent/प्रतिवादी आयकर अपील सं./Ita No. 2886/Mum/2024 (निर्धारण वर्ष / Assessment Year :2016-17) State Bank Of India, Linking Road Branch, Plot No. 533, Patwardhan House, Bandra West, Mumbai-400052 V/S. बनाम Acit-Tds 2(2), Mumbai 3Rd Floor Cumballa Hill Mtnl Te Building, Pedder Road, Dr. Gopalrao Deshmukh Marg, Cumballa Hill, Mumbai-400026 स्थायी लेखा सं./जीआइआर सं./Pan/Gir No: Aaacs8577K Appellant/अपीलार्थी .. Respondent/प्रतिवादी निर्धारिती की ओर से / Assessee By: Shri Ninad Patade राजस्व की ओर से /Revenue By: Shri Leyaqat Ali Afaqui Page 2

For Appellant: Shri Ninad PatadeFor Respondent: Shri Leyaqat Ali Afaqui
Section 10(5)Section 192Section 201Section 250