HILLS VIEW BONDED WAREHOUSE,UPPER CHANDMARY vs. INCOME TAX OFFICER, ALAM COMPLEX

Brief facts of the case are that the assessee firm did not file the return of income as required under sub-section (1) of section 139 of the Act for A.Y. 2020-21. As per the information available with the Department, the assessee firm had entered into financial transaction during the F.Y. 2019-20 and therefore, the proceedings u/s 147 of the Act were initiated by the Assessing Officer (hereinafter referred to as Ld. 'AO') for the A.Y. 2020-21 and subsequently the assessment order was passed u/s 144 r.w.s. 147 r.w.s.144B of the Act after making addition of ₹2,48,57,295/- by estimating the business income at the rate of 25% on the total credits of ₹9,94,29,182/-. Aggrieved with the assessment order, the assessee filed an appeal before the Ld. CIT(A), who provided several opportunities of hearing to the assessee but the assessee remained non-compliant and the appeal was decided on the basis of facts and information available on record as per his findings as under:

Aggrieved with the order of the Ld. CIT(A), the assessee has filed the appeal before the Tribunal.

Rival contentions were heard and the submissions made have been examined. At the outset, the Ld. AR fairly submitted that the ITA No(s). 32/GTY/2026 Assessment Year(s) 2020-21 order passed by the Ld. CIT(A) is an ex parte order. Hence, the Ld. AR prayed before the Bench to set aside the order of the Ld. CIT(A) and restore the issue to the file of the Ld. AO for adjudication afresh. It was contended by the Ld. AR that the major portion of the receipts related to Excise and VAT which totalled up to 70% and the basic value of sales were only about 30% of the receipt. The assessee had a turnover of more than ₹ 3 Crore and the firm was claiming exemption under section 10(26) of the Act. The assessee owns liquor bonded warehouse and has to incur 25 to 30% as excise duty and 40% as VAT. The assessee had purchased liquor and supplied to Bars and wine stores etc. and the relevant evidence in this regard was filed in the paper book. The assessment order was ex parte and before the Ld. CIT(A) also the appeal was not pursued properly. Most of the receipts from the wine stores was stated to be in cash and the margin of profit was stated to be varying from 6 to 8%. The Ld. DR relied upon the order of the Ld. CIT(A) and requested that the same may be upheld as the marginal profit applied by the Ld. AO and upheld by the Ld. CIT(A) was quite reasonable.

We have considered the submissions made, gone through the facts of the case and perused the record and the order of the Ld. CIT(A). We find that the assessee, despite being provided sufficient opportunities of being heard before the Ld. CIT(A), did not present himself in the appellate proceedings and therefore, cannot agitate on account of violation of the principles of natural justice. Even the assessment order is ex parte. However, in the interest of justice and so as to grant the assessee adequate opportunity to substantiate his case, as it was contended that 70% of the bank credits represent statutory levies (VAT and Excise) and only 30% is the basic value of ITA No(s). 32/GTY/2026 Assessment Year(s) 2020-21 sales and the income is also being claimed to be exempt under section 10(26) of the Act and the margin of profit was much lower than what has been upheld by the Ld. CIT(A), the Bench was of the view that one more opportunity may be provided to the assessee so as to substantiate its claim that the income is exempt or is lower than that assessed. Thus, the order of the Ld. CIT(A) is set aside and the issues in this appeal are restored to the file of the Ld. AO for re-adjudication and framing of the assessment de novo after granting an opportunity of being heard to the assessee and subject to the cost of ₹ 10,000/- (Rupees ten thousand) only as there was non-compliant at both the assessment as well as at the appellate stage, which shall be payable to the Revenue under the relevant head within sixty days from the date of this order and to produce the challan as a proof for the payment of the same before the Ld. AO at the first hearing. Should the assessee not pay the abovementioned cost within the prescribed period of sixty days from the date of this order, the order of the Ld. CIT(A) shall stand confirmed. Hence, the Grounds of appeal are partly allowed for statistical purpose.

In the result, the appeal filed by the assessee is partly allowed for statistical purposes. Order pronounced in the open Court on 2nd June, 2026. [Sonjoy Sarma] [Rakesh Mishra] Judicial Member Accountant Member Dated: 02.06.2026 Bidhan (Sr. P.S.)

CIT-

CIT(DR), Guwahati Benches, Guwahati.

Guard File. //// By order