Section 139(5) of the Income Tax Act
Income-tax Act, 2025: s.263
Section 139(5) falls under section 139 of the Income-tax Act, 1961, which corresponds to section 263 (Return of income) of the Income-tax Act, 2025.
Read section 263 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 139(5) is CIT v. Yokogawa India Ltd. (391 ITR 274), cited in 290 of the 830 judgments on BharatTax that turn on this section.
Leading authorities on Section 139(5)
Deduction under Section 10A or 10AA of the Income-tax Act is computed on the profits of the eligible unit without first setting off losses from other units or non-eligible units. Conversely, losses incurred by an eligible unit are allowed to be set off against the assessee's other taxable business profits.
Exemption provisions under Chapter III, such as Section 10B(8), must be interpreted strictly, and any claim for such exemptions must be made in the return of income. The principles governing Chapter III (incomes not forming part of total income) differ from those for Chapter VIA (deductions in computing total income).
Interest, sales tax, and purchase tax subsidies received by an assessee are generally considered capital receipts, not revenue income, for income tax purposes.
If an assessee possesses sufficient interest-free own funds to cover investments yielding exempt income, it is presumed that such investments are made from these own funds, precluding any disallowance of interest expenditure under Section 14A, even when borrowed funds are also available.
The Kerala High Court held that charitable institutions claiming exemption under Section 11 are not entitled to claim depreciation on assets used for charitable purposes, taking a view contrary to most other High Courts.
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.
A subsidy is classified as a capital receipt if its object is to enable the assessee to set up or expand a new or existing unit. Conversely, it is a revenue receipt if its purpose is to help the assessee run the business more profitably.
No disallowance for investments made out of surplus funds can be made if tax-free dividends are earned on such investments.
The Assessing Officer must grant the correct deduction after due verification of claims made by the assessee, even if not perfectly articulated initially. This principle applies in assessment proceedings, including those involving specific deductions like those for export-oriented units under Section 10B.