LORRY TRANSPORT AGENCIES UNION SECTOR 2,KOZHIKODE V. ITO,WARD 1(1), CALICUT

ITA 406/COCH/2025

AI Insights

The case involves Lorry Transport Agencies Union, an Association of Persons (AOP), which did not file a return of income for the assessment year 2018-19. Following the discovery of significant cash deposits and expenditures, the Assessing Officer initiated proceedings under section 147 and issued a notice under section 148. The assessee filed a return declaring a minimal income, which led to further scrutiny and the addition of unexplained expenditure to the assessee's income. The assessee's appeal to the CIT(A) was dismissed, prompting the appeal to the Tribunal. The primary issues revolved around the assessee's inability to fully comply with procedural requirements due to illiteracy and unfamiliarity with online compliance, and the appropriateness of penalties levied under sections 271B and 271AAC(1) of the Income Tax Act.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 633615 (ITAT-COCHIN)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2018-2019
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LEENA LAL; SNR
• Assessee Lawyers: M RAMKUMAR MENON
• Keywords: Set aside
• Section: 147; 148; 142(1); 69C

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN Before Shri Inturi Rama Rao, Accountant Member & Shri Sonjoy Sarma, Judicial Member ITA Nos.405 to 407/Coch/2025 Assessment Year: 2018-19 Lorry Transport Agencies Union A/160 HJ, Samar 7 Building, Lorry stand, Cherooty road, Kozhikode, Kerala – 673001. PAN : AABAL2537M. v. ITO, Ward-1(1), Calicut (Appellant) (Respondent) Appellant by : Shri M Ramkumar Menon, CA Respondent by : Smt. Leena Lal, Snr AR Date of Hearing : 03.06.2025 Date of Pronouncement : 10.06.2025 O R D E R Per Sonjoy Sarma: All the captioned appeals have been preferred by the assessee against separate orders by the National Faceless Appeal Centre [hereinafter referred to as ‘CIT(A)’] dated 06.03.25 and 07.03.25 arising out of assessment and penalty proceedings relating to assessment year 2018-19. Since, the issue involved in the appeals are interlinked and are arising from the same set of facts, therefore, these appeals were heard together and are being disposed of by this common order. For the sake of convenience, ITA No.405/Coch/2025 is taken as lead case. ITA Nos.405 to 407/Coch/2025 Lorry Transport Agencies Union 2 2. ITA No.405/Coch/2025 - Brief facts of the case are that the assessee is a AOP and has not filed return of income for the assessment year 2018-29. Based on information available, it was found that there was a cash deposit of Rs.6,89,810/- and cash expenditure of Rs.1,02,63,000/-. Consequently, proceedings u/s 147 were initiated and notice u/s 148 was issued and in response, the assessee filed a return of income declaring income of Rs.5,854/-. Subsequently, statutory notices u/s 143(2) and 142(1) were issued and after getting partial response from the assessee, the Assessing Officer treated the said cash expenditure of Rs.1,02,63,000/- as unexplained u/s 69C r.w.s 115BBE of the Act by assessing total income of the assessee at Rs.1,09,58,664/-. 3. Aggrieved by the above order, the assessee preferred an appeal before the ld. CIT(A), however, the appeal of the assessee was dismissed by the ld. CIT(A) 4. Dissatisfied with the above order, the assessee is in appeal before this Tribunal raising various ground. However, the primary contention of the assessee is that the assessee association is based on illiterate persons not familiar with online compliance, therefore, the assessee could partially make compliance with the notices and due to this lacking of awareness, the Assessing Officer made the impugned addition and confirmed by the ld. CIT(A). The ld. AR prayed one more opportunity may be given to the assessee to properly represent its case. 5. On the other hand, the ld. DR supported the orders of the authorities below. 6. We, after hearing the submission of the ld. DR and perusing the materials available on record, find that the assessee ITA Nos.405 to 407/Coch/2025 Lorry Transport Agencies Union 3 association is based on illiterate persons not familiar with online compliance, therefore, the assessee could partially make compliance with the notices before the Assessing Officer and also ld. CIT(A) and due to this lacking of awareness itself, the Assessing Officer made the impugned addition. Therefore, in the interests of justice and fair play, we deem it necessary to remand back the whole issue to the file of the Assessing Officer with a direction to re-examine the issue afresh in accordance with law after giving proper and due opportunities of hearing to the assessee. 7. In terms of the above, ITA No.405/Coch/2025 is allowed for statistical purposes. 8. ITA No.406/Coch/2025 – In this appeal, the Assessing Officer levied penalty u/s 271B of the Act for allegedly failure to get its accounts audited u/s 44AB of the Act. Since, the assessee is a AOP lorry brokers receiving brokerage payments from its transporters and the Assessing Officer was in belief that the entire payments were the turnover of the assessee and therefore, he levied the impugned penalty. The contention of the ld. AR is that the total credit amount in the bank account includes receipts of transporters and the same were not actually turnover of the assessee, therefore, the penalty u/s 271B of the Act is not sustainable. ld. DR supported the orders of the authorities below. We find that the actually receipts by way of commission/brokerage which were received by the assessee were below the limit prescribed u/s 44AB. Since the brokerage received by the assessee was below the prescribed limited, therefore, there is no requirement to get the accounts audited and hence the penalty u/s 271B is not sustainable and is hereby deleted. ITA Nos.405 to 407/Coch/2025 Lorry Transport Agencies Union 4 9. In terms of the above, ITA No.406/Coch/2025 is allowed. 10. ITA No.407/Coch/2025 – In this appeal, a penalty proceedings were initiated u/s 271AAC(1) of the Act which is consequential to the quantum addition made in ITA No.405/Coch/2025. Since, we already set aside the ITA No.405/Coch/2025 to the file of the Assessing Officer, therefore, the impugned penalty u/s 271AAC(1) cannot be survive at this stage. Accordingly, the instant appeal is remanded back to re- consider the penalty as it is depending on the outcome of the re- assessment proceedings in ITA No.405/Coch/2025. 11. In terms of the above, ITA No.407/Coch/2025 is allowed for statistical purposes. Order pronounced on 10.06.2025. Sd/- (Inturi Rama Rao) Sd/- (Sonjoy Sarma) Accountant Member Judicial Member Cochin, Dated: 10.06.2025. RS Copy to : 1. The Appellant. 2. The Respondent. 3. The CIT(A), Concerned. 4. The CIT Concerned. 5. The DR, ITAT, Cochin. 6. Guard File. Asst. Registrar/ITAT, Cochin "