PUNJAB MUNICIPAL INFRASTRUCTURE DEVELOPMENT COMPANY,CHANDIGARH vs. DCIT EXEMPTION CIRCLE 1, CHANDIGARH, CHANDIGARH
Facts
The assessee accumulated funds exceeding 15% of income but did not e-file Form No.10 as required by Section 11(2) r.w. Rule 17, although a manual form was filed. The Assessing Officer denied the benefit of accumulation, a decision upheld by the CIT(A), who noted that a CBDT Circular (No.06/2020) provided a mechanism for condonation under Section 119(2)(b), which the assessee had not utilized.
Held
The Tribunal noted that e-filing was procedural and the requirement arose from 01-04-2016. Given it was the first year of new rules and a condonation mechanism exists, the Tribunal set aside the CIT(A)'s order and restored the matter back to the CIT(A) for fresh adjudication, allowing the assessee to seek condonation from the appropriate authority. The appeal was allowed for statistical purposes.
Key Issues
Whether the benefit of accumulation of funds can be denied solely due to non-e-filing of Form No.10, despite manual filing and the availability of a condonation process through a CBDT circular.
Sections Cited
143(3), 11(2), 119(2)(b)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “B” BENCH, CHANDIGARH
Before: HON’BLE SHRI LALIET KUMAR, JM & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM
IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, CHANDIGARH PHYSICAL HEARING BEFORE HON’BLE SHRI LALIET KUMAR, JM AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकर अपील सं. / ITA No.593/CHANDI/2025 (िनधा�रण वष� / Assessment Year: 2016-17) M/s Punjab Municipal Infrastructure DCIT Exemption Circle 1, 5th Floor Development Company बनाम/ Plot No. 3, 5th Floor C. R. Building, Vs. Punjab Municipal Bhawan, Sector – 17E Chandigarh - 160022 Chandigarh �थायीलेखासं./जीआइआरसं./PAN/GIR No. AAFCP-8185-M (अपीलाथ�/Appellant) (��थ� / Respondent) : अपीलाथ�कीओरसे/ Appellant by : Sh. Navdeep Monga (Advocate) – Ld. AR ��थ�कीओरसे/Respondent by : Smt. Meenakshi Vohra (CIT) – Ld. DR सुनवाईकीतारीख/Date of Hearing : 25-02-2026 घोषणाकीतारीख /Date of Pronouncement 25-02-2026 : आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2016-17 arises out of an order of learned Commissioner of Income Tax (Appeals), NFAC [CIT(A)] dated 25-02-2025 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s 143(3) of the Act on 26-11-2018. Having heard rival submissions, the appeal is disposed-off as under.
During assessment proceedings, it was noted by Ld. AO that the assessee accumulated / set apart funds exceeding 15% of the income. However, the assessee did not e-file Form No.10 as required u/s 11(2) r.w. Rule 17. The assessee stated that it filed manual Form on 17-10- 2016. However, since the form was not e-filed as required under extant rules, the benefit of accumulation was denied to the assessee. 3. The Ld. CIT(A), in para 5.1 noted that for such condonation / lapses, CBDT had issued Circular No.06/2020 on 19-02-2020 wherein ther assessee could seek condonation from appropriate authority u/s 119(2)(b) of the Act. The assessee did not seek any such condonation and therefore, the view of Ld. AO was endorsed. Aggrieved, the assessee is in further appeal before us. 4. The Ld. AR has stated that e-filing of this form was procedural in natural and a manual form was duly filed before culmination of assessment proceedings. It was further stated that the requirement of e-filing arose only w.e.f. 01-04-2016. Accordingly, Ld. AR sought condonation of the delay. 5. Undisputedly, extant rules mandate the assessee to file this form electronically to lay claim on the benefit of accumulation. If the prescribed procedure is not followed and the claim is allowed, the same would make the provisions redundant. Once condonation procedure has been established by CBDT in the stated circular, the assessee should follow the same. To enable the assessee to seek condonation before appropriate authority, we set aside the impugned order and restore the appeal back to the file of Ld. CIT(A) for fresh adjudication in
the light of outcome of condonation petition, if so advised to the assessee. It would be appreciated that a sympathetic view is taken by appropriate authority on the condonation application of the assessee since this is the first year of introduction of new rules. 6. The appeal stand allowed for statistical purposes. Order pronounced on 25th February, 2026.
-Sd- -Sd- (LALIET KUMAR) (MANOJ KUMAR AGGARWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER AS Dated: 25-02-2026 आदेश की �ितिलिप अ�ेिषत /Copy of the Order forwarded to : 1. अपीलाथ�/Appellant 2. ��थ�/Respondent 3. आयकरआयु�/CIT 4. िवभागीय�ितिनिध/DR 5. गाड�फाईल/GF ASSISTANT REGISTRAR ITAT CHANDIGARH
