SHILPKARS CLOTHING COMPANY,MUMBAI vs. ACIT-22(2) , MUMBAI

The assessee has raised the following grounds before us: (Grounds) “1. The Ld. CIT(A) erred in law and in facts in not appreciating that the reopening of assessment was bad in law.

The Ld. CIT(A) has erred in law and in facts in confirming the addition of alleged bogus purchases by working of peak credit amounting to Rs.1,17,10,542/-

The Ld. CIT(A) has erred in law and in facts in not granting adequate opportunity to the appellant and dismissing the appeal.

The Appellant craves leaves to add, amend, alter, delete all or any of the forgoing grounds of appeal.”

There was a delay in filing this appeal by 347 days. To condone the delay in filing the appeal the assesse has filed petition dated 11.07.2023 along with affidavit. In the petition the assessee submitted that delay in filing the given appeal was occurred on account of the fact that partner of the assesse firm Shri Mehul Parikh was occupied with the legal and criminal matters initiated against him by M/s RNA Cargo Pvt. Ltd. and M/s G.A. Builders Pvt. Ltd. as a result of which he could not devote his time and attention for filing the impugned appeal. The aforesaid parties have filed the FIR against the partner on 11.07.2021. Therefore, Shri Mehul Parikh filed application for anticipatory bail before the Session Court Bombay on 23.07.2021 however, vide order dated 21.10.2021 the session court has denied the anticipatory bail to the partner of the firm Shri Mehul Parikh. Therefore, he filed anticipatory bail application before the hon’ble Bombay High Court which was also rejected vide order dated 16.11.2021 thereafter Mr. Mehul Parikh had surrendered before the Additional Metropolitan Magistrate Kurla Mumbai on 11.04.2022. In support of their contention the assessee has placed in the paper book the following relevant evidences:

Fact in brief is that return of income declaring total income of Rs.504,33,592/- was filed on 27.04.2022. The return was processed u/s 143(1) of the Act. Subsequently, the case was reopened by issuing of notice u/s 148 of the Act on 19.02.2023. The assessee firm is a partnership firm engaged in the business of retail trade of readymade garments. There was a survey action u/s 133A of the Act on 19.12.2022 at various business premises of the assessee firm. At the time of survey it was noticed that certain bills from various parties were not accompanied by delivery challans, transportation bills etc. On further verification it was noticed that assesse firm had made purchases from many of those parties which was declared as hawala operators by the sales tax department, Maharashtra State. The assessing officer has also listed such parties at page no. 2 & 3 of the assessment order. The assessing officer further stated that assessee has neither produced these parties nor filed delivery challans. Therefore, for want of verification the assessing officer has treated the purchases made from the hawala parties listed by the Maharashtra Sale Tax Department as bogus and treated the combined peak of the credit standing in the name

Aggrieved, the assessee filed the appeal before the ld. CIT(A). However, the ld. CIT(A) vide order u/s 250 of the Act dated 21.03.2022 has dismissed the appeal of the assessee on the ground that assessee has not made compliance during the course of appellate proceedings to the notices issued by the ld. CIT(A).

During the course of appellate proceedings before us the ld. Counsel submitted that assessee could not make compliance before the ld. CIT(A) because of criminal proceedings filed against the assessee and assessee was not granted anticipatory bail as reported in the affidavit filed for condonation of delay in filing the impugned appeal. Therefore, he submitted that more opportunity should be given to the assessee for deciding their case on merit. On the other hand, the ld. DR supported the order of lower authorities.

Heard both the sides and perused the material on record. The assessee firm is a partnership firm and Shri Mehul M. Parikh and Smt. Geeta M. Parikh were the two partners of the firm. It is undisputed fact that main partners of the assessee firm Shri Mehul M. Parikh has surrendered before the Additional Metropolitan Magistrate on 11.04.2022 and his anticipatory bail application was rejected by the Session Court and Hon’ble Bombay High Court as evident from the copies of various orders as elaborated supra in this order while considering the petition for condoning the delay in filing the impugned appeal. After considering the such extraordinary circumstances which were beyond the control of the assessee we consider that there is a bonafide reason as discussed supra because of which the required

In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 26.07.2023 (Aby T Varkey) (Amarjit Singh) Judicial Member Accountant Member Place: Mumbai Date 26.07.2023 Rohit: PS