BLUFAB FASHION FABRICS LLP,ANDHERI (EAST) vs. DCIT CC 2(2), PRATISTHA BHAVAN

PER OM PRAKASH KANT, AM

Both these appeals by the assessee are directed against two separate order dated 10.02.2025 and 21.03.2025, passed by the Ld.
Commissioner of Income-tax (Appeals) – 48, Mumbai [in short ‘the Ld.
CIT(A)’]
for assessment year
2018-19
and 2019-2020
respectively. As identical issue-in-dispute is involved in both these appeals and therefore, same were heard together and disposed off by way of this consolidated order for the sake of convenience.

e up the appeal of the assessee grounds raised by the assessee
T(A) has erred in law and in fact by not a A.O. has passed an order u/s 143(3) in law and illegal.
IT(A) has erred in law and in facts in pa he Act and confirming the addition made ting effective opportunity of hearing to the IT(A) has erred in law and in facts in con account of unexplained money Rs. 1,90,4
ct as under valuation of stock.
IT(A) has erred in law and in facts in con s. 3,82,099/- on account of short fall in the Act.
d, the learned counsel for the a defective memo issued by the R days in filing the present appe larified that as per the compu on application supported by delay in filing the appeal is delay has occurred due to stances beyond the control of th eliberate or contumacious cond
. The learned counsel further irs of the assessee-firm, M/s eing handled by a chartered ac ernal disputes amongst its par
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for assessment are reproduced appreciating of the Act assing order by Ld. A.O.
e assessee.
nfirming the 40,291/-u/s nfirming the cash found assessee invited
Registry pointing eal. The learned utation enclosed a duly sworn of 82 days. He bona fide and he assessee and duct warranting submitted that Blufab Fashion ccountancy firm rtners, failed to make effective re
Consequently, the or not communicated appointment of a ne portal that the asses preferred the presen reproduced as under 1. I say that LLP along wit
Mr. Kush Har
2. I say that f on 30.10.201
3. 1 say tha
31.01.2018
Subsequently centralization issued.
4. I say tha partners of th that subsequ filed a comm before the Ho were illegally to the firm.
5. I further sta the firm by on NCLT on 04.1
6. I say that carrying out t
May 2021 to J
7. I say that Covid-19 pan said period."
B
ITA No.

epresentation before the le rder passed by the first appellat to the assessee. It was o ew counsel and verification of t ssee became aware of the orde nt appeal. The relevant part of :
I am one of the partners of Blufab Fash th other partners, namely Mr. Luv Harish rish Arya.
for A.Y. 2018-19, the firm filed its return
8 3 declaring total income at Rs. 1,98,93, at a survey action was conducted on t wherein certain discrepancies we y, the case was selected for scrutiny. I sa n of the case on 23.04.2021, various no at in the meantime, a dispute arose be he firm and we accordingly separated in 2
ently on 03.12.2020, I, as the partner mercial arbitration petition against othe on'ble Bombay High Court on the ground selling raw materials and finished good ate that IBC proceedings were also initia ne of the creditors of the firm before the 2.2019. meanwhile, notices were issued by the L the assessment proceedings for A.Y. 2018
June 2021. these notices could not be attended due ndemic (2nd phase) which was prevalent
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earned
CIT(A).
te authority was only upon the the Income Tax er and promptly f the affidavit is hion Fabrics h Arya and n of income
,236/-.
the firm on ere found.
ay that after otices were etween the 2018. I say of the firm, er partners d that they s belonging ated against
Hon'ble the Ld. A.O. for 8-19 during e to ongoing t during the 8. I say that Arya and Mr.
the help of th their persona email ID of th
AD Atul Gup say that the address of the 9. I say tha proceedings d informing the the fact that therefore requ be done by ot
10. I say tha sought from t the assessme u/s. 143(3) additions and 11. ⁠I say that of the C.A. Atu visited the I- found the said
12. I say tha asked him to filed on 20.09
13. I say sin affairs of the communicatio position to o appeal. 1 the and carry out
14. I say that not obtain th
CIT(A). He file
October, 2022
15. I say that passed by th vide his orde
Immediately,
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ITA No.

compliances were looked after by Mr. K
. Kush Harish Arya, other partners of th he chartered accountant who was also lo al affairs. In order to have effective comp he partners of the Arya family and the sa ta being atul.o.gupta@gmail.com was re notices Would have been served upon e said partners and the said chartered ac at when I realized about the ongoing a during June, 2021, I immediately sen e Ld. A.O. of the dispute amongst the pa the records of the firm were with other uested that the compliance to the I-T noti ther partners of the Arya family.
at since the details and the documents co the other partners, I could not make a co ent proceedings and assessment was of the Act on 15.06.2021 making t d determining the total income at Rs. 3,93
t even the said order was served upon th ul Gupta and hence was not received by T portal to verify the status of the ass d order issued on 15.06.2021. at I immediately contacted the CA Atul file the appeal immediately which was 9.2021. nce the said C.A. Atul Gupta was lookin e firm since past few years and he w on of other partners of Arya family, he wa obtain records from them and also rep erefore requested him to represent the s t compliance.
t however, even the said chartered accou he records and could not represent befo ed reply to one of the notices issued in a 2 requesting for adjournment.
t in the meantime, the assessment order e Ld. A.O. also in case of the firm for A.
r u/s. 147 r.w.s. 144 of the Act dated 0
on noticing the said order, I requested t
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Kush Harish he firm with ooking after pliance, the aid C.A. Mr.
egistered. I n the email ccountant.
assessment nt an email artners and r partner. 1
ices was to ould not be mpliance to completed the several
3,15,626/-.
he email ID me. When I sessment, I
Gupta and accordingly ng after the was also in as in better present the said appeal untant could fore the Ld.
and around came to be Y. 2019-20
05.03.2024. the said CA

Atul Gupta to that necessar
16. say that not getting an withdrew him his intentions
17. I say tha himself from a the notices ar filed, I appoin
Laddha in an appellate mat
18. I say that Atul Gupta w access to the new chartered check the issu
The receipt of the reply to th
19. 1 also sa
High Court, th prayed that inventory be p and inventory have been m under impres could not m moratorium p unable to go a 20. I say th requests filed dismissing th
21. 1 say tha email as the s
Atul Gupta w partners of Ar
22. I say tha u/s. 147 r.w
05.03.2024 w the order was B
ITA No.

o file the appeal against the said order a ry action is taken to resolve the said dema thereafter, since the said CA Atul Gupta ny co- Operation from the partners of Arya mself from handling the said matters and s to the partners of the Arya family.
at, upon knowing that he has willingly attending the appeal matters, in order to re attended and atleast request for adjo nted another chartered accountant, CA M nd around October, 2024, to take care tters.
t since the email ID of the Arya family and was registered in the I-T Portal, I was una e notices issued by the Ld. CIT(A). Henc d accountant used to occasionally visit th ue to notices in appeal. I say that when f notice for hearing during November, 202
he said notice requesting for adjournment ay that in the petition filed before Hon'b he issue was w.r.t. illegal sale of the stock all documents w.r.t. said stock as w provided to the firm. I say that until such y were provided to the firm, no submiss ade before the Ld. CIT(A). I further say ssion that until the CIRP was appointe make any submissions before the Ld.
period would be declared due to which ahead with the proceedings.
hat the Ed. CIT(A) disregarded the a d and passed an order u/s. 250 on e appeal filed by the firm.
at even the said order was not received same would have been received by the er whose email ID was registered on the I-T P rya family.
at subsequently, even the appeal agains w.s. 143(3) of the Act for A.Y. 2019
was also disposed off due to non- atten s passed on 21.03.2025. Blufab Fashion Fabrics LLP
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and ensure ands.
a was also a family, he informed of y withdrew ensure that ournment is Mr. Rajendra of the said d earlier CA able to have ce, the said he portal to n he noticed
24, he filed t.
ble Bombay k and I had well as all documents sions could that I was ed, the firm
CIT(A) as I would be adjournment
10.02.2025
d by me in rstwhile CA
Portal or by st the order
9-20 dated ndance and 23. "I say tha
Laddha visite found that th already disp
21.03.2025 re
24 say that requested the the both the y
25. I say that as well as de not intentiona the control of of the firm or 26. I say tha explained in filed before H to be true an 3.1 The learned cou the Hon’ble Suprem
Katiji [(1987) 167 ITR justice and technical the cause of substa delay in the present and not by negligence
4. We have caref perused the record. T detailed affidavit of unmistakably shows on account of peculia between partners, o
B
ITA No.

at on my request, when the said new C.A ed the Portal to verify the status of the e appeals for A.Y. 2018-19 and A.Y. 20
posed off vide orders dated 10.02. espectively.
immediately knowing of the said orders e said CA Rajendra Laddha to file the a years before Hon'ble ITAT.
t the non-appearance before Ld. A.O. and elay in filing the appeal before Hon'ble Tr al but was purely due to genuine reaso f the firm. There is no malafide intention its partners.
t the reasons for delay in filing the appe detail in the prayer for condonation of d
Hon'ble Tribunal and I affirm the facts sta d correct.
unsel relied upon the principle e Court in Collector, Land Acq
R 471 (SC)] to contend that w l considerations are pitted agai antial justice must prevail. He case, being occasioned by gen e or indifference, deserves to be fully considered the rival su
The chronology of events, as ev f one of the partners of the that the delay in filing the appe ar circumstances involving inter ongoing litigation before the H
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A. Rajendra appeal; he
19-20 were .2025 and s passed, I appeals for d Ld. CIT(A) ribunal was ons beyond on the part eal are also delay being ated therein es laid down by quisition v. Mst.
hen substantial inst each other, urged that the nuine difficulties condoned.
ubmissions and videnced by the e assessee-firm, eal has occurred rnecine disputes
Hon’ble Bombay

High Court, insolven lack of access to firm
4.1. The affidavit ela sent to the email ID other partners of th assessee of notice appointment of new c steps and filed the ap
4.2. On a conspect opinion that the del gross negligence. It receive a liberal cons down by the Hon’ble
Mst. Katiji (supra
4.3. In the totality o assessee was preven appeal within the pre the appeal is condon on merits.
5. Upon perusal o the learned CIT(A) h and January 2025,
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ITA No.

ncy proceedings before the Hon m records and email credentials.
aborately narrates how notices a of the erstwhile chartered acco he Arya family, which effective and opportunity at various counsel, the assessee took imme ppeal without any undue lapse o us of these facts, we are of lay was neither deliberate nor is settled law that “sufficient struction to advance the ends of Supreme Court in Collector, Lan of the circumstances, we are sa nted by reasonable cause in no escribed period. Accordingly, th ned and the appeal is admitted f the impugned appellate order ad issued multiple notices betw but no effective compliance wa
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n’ble NCLT, and and orders were ountant and the ely deprived the stages. Upon ediate corrective of time.
the considered attributable to t cause” should f justice, as laid nd Acquisition v.
atisfied that the ot preferring the he delay in filing for adjudication r, it is seen that ween July 2022
as made by the assessee. The learned appeal ex parte, rely and Another [(1979) an obligation to pros
Ld. CIT(A) is reprodu
“7. During th hearing notice to the appella
1. Notice dat hearing on or 2. Notice dat hearing on or 3. Notice dat hearing on or 4. Notice dat hearing on or 5. Notice dat hearing on or 6. ⁠Notice dat hearing on or 7. Notice dat hearing on or 8. Notice dat hearing on or It is pertinen timely manne
ITBA portal dated
20.07
23.10.2023, response to adjournment.
by the appell co- operativel
B
ITA No.

d CIT(A), therefore, proceeded t ing upon the ratio of CIT v. B.N
118 ITR 461 (SC)], that filing an secute it effectively. The relevan ced as under:
he course of appellate proceedings, th es u/s 250 of the Income-tax Act, 1961, w ant:
ted 20.07.2022 asking the appellant to before 25.08.2022 by 03:00 PM.
ted 13.09.2022 asking the appellant to before 26.09.2022 by 03:00 PM.
ted 04.10.2022 asking the appellant to before 11.10.2022 by 03:00 PM.
ted 03.10.2023 asking the appellant to before 12.10.2023 by 04:00 PM.
ted 23.10.2023 asking the appellant to before 12.12.2023 by 03:00 PM.
ted 27.06.2024 asking the appellant to before 12.07.2024 by 11:00 AM.
ted 13.11.2024 asking the appellant to before 19.11.2024 by 12:20 PM.
ted 22.01.2025 asking the appellant to before 28.01.2025 by 03:43 PM.
nt to note that in order to decide this a er, a number of notices/communications t were sent to the appellant, viz., comm
7.2022,
13.09.2022,
04.10.2022,
0
27.06.2024,
13.11.2024, and 22. the notices sent, the appellant is mere
There is no gainsaying that once the app lant, it is obligatory on his part to purpo ly pursue the same in a worthwhile man
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to dispose of the N. Bhattacharjee n appeal implies nt finding of the he following were issued attend the attend the attend the attend the attend the attend the attend the attend the appeal in a through the munications
03.10.2023,
.01.2025.In ely seeking peal is filed sefully and nner, which the appellant the appellant productive m compliance/n the appellant, ex-parte, prim record, which 8. At the outs case, as evide dismissed in Apex Court a Apex Court w
(10 CTR 354) to "prefer an appeal. "Purp an appeal m pursuing it an as good as no 9. It is pertin vigilant and n is embodied dormientibus of the vigilan other proceed plaintiff is fa
Viewed thus, cogent reason taken in this person ma responsibility/
the tax autho with the appe has not been statutorily & j made in the opportunities
10. It is, thu substantiate with any supp constraining m speaking sub statement of f on the merits concur with th
B
ITA No.

t has evidently failed to do. It clearly ap has not even bothered to pursue this app manner. Hence, in view of the aforesaid non prosecution of the instant appeal on , the instant appeal is adjudicated and d marily on the basis documents/details a h is as under.
set, that in the situation as obtained in ently seen from the above, this appeal is terms of the ratio of the judgements of and the various High Courts including t which held in CIT v. B. N. Bhattarcharjee a that an appeal means an effective appe n appeal" would mean effectively pros posefully and constructively interpreted, means more than formally filing it but nd if a party retreats before the contest b ot having entered the fray.
nent to add here that laws assist thos not those who sleep over their rights. Th d in the well-known maxim "Vigilan jura subveniunt". It means equity comes nt and not the slumbering. In all actions dings at law and in equity, the diligent a avoured and prejudicial of him who i it is presumed that the appellant has ning or/and evidence to substantiate th s impugned appeal. It is trite that the aking the claim, and the /onus/burden for proving the claim m orities (Assessing Officers/Appellate Auth ellant/appellant. In the present case, th n able to even discharge the primary on judicially cast upon him to substantiate grounds of appeal in spite of adequate given as brought out in the foregoing para us, evident that the appellant has no e the grounds taken and it has not even o pporting, relevant and cogent arguments/
me to, therefore, go through the extremely bmission appearing in the grounds of a facts filed along-with the impugned appea s while adjudicating the same. I am con he AO's findings of fact and decisions th
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ppears that ppeal in any d total non- the part of isposed off, available on the instant liable to be the Hon'ble the Hon'ble and Another eal and that secuting an , preferring t effectively begins, it is se who are his principle ntibus non s to the aid s, suits and and careful is careless.
no further he grounds onus is on primary made before horities) lies he appellant nus/burden e the claims e time and as.
evidence to once argued
/averments, y brief non- appeal and al to decide nstrained to hereof, more particularly in submissions/
proceedings adopted by t writing in the 11. I have car the order of th the case th documentary
In connection made on a expenditure C the basis of f facts submitte
12. APPELLAT
12.1 Decision nature and a adjudicated i adjudication no. 1 of appea

n the absence of any meaningful and /documentations even during the instan in this case to counter effectively th the AO on the concerned issues and assessment order.
refully perused the facts of the appellant he Assessing Officer. It is observed from hat the appellant has failed to fu evidence to the issue raised by them in with additions made by the AO regardin account unexplained money and u
Considering the above facts, I decide the facts mentioned by AO in the assessmen ed by appellant along-with Form No. 35. TE DECISION:
n on Ground No. 1: This ground is genera all the detailed ground raised by the ap in subsequent paragraphs, therefore, n of this ground is required. Accordingly, al is dismissed.
n on Ground No. 2: In ground no. 2, th the AO has erred in making a 91 u/s.698 as unexplained money on on of closing stock.
carefully considered the facts mentioned appellant submitted alongwith Form No.
als on the record on these issues. Th hat during the survey proceedings condu ase, the inventory of the stock taken n conducted on 31.01.2018 was Rs.6,9
ck as per the books amounted to Rs.5,0
difference of Rs. 1,90,40,291/- Further,
Shri. Luv Arya (partner) during the survey t excess stock amounting to Rs.1,90,40
as those were lying outstation.
e above connection, the appellant was s
Rs. 1,90,40,291/-should not be t money u/s.698 of the IT Act. In res bmitted that the proceedings are pending
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worthwhile nt appellate he position reduced in t's case and the facts of urnish any the appeal ng additions unexplained e appeal on nt order and a general in ppellant are no separate the ground e appellant addition of account of d by the AO,
35 and the he AO has ucted on the during the 91,55,437/-
1,15,146/-.
as per the y action, he
0,291/-were howcaused treated as sponse the in the court of law for tak the matter is kept in abeya
Hon'ble Court from the Cour the above
Rs.1,90,40,29
12.2.3 Furth appellant eve hearing nor su nor offered a the above ad appellant has Hence, consid that the AO u/s.69B of th made by AO raised by app
12.3 Decision urged that the u/s.69C as u
12.3.11 have facts of the a other materia assessment o during the su as per book of actual cash fo there was a showcaused a be treated as response the the absence
Rs.3,82,099/
the total incom
12.3.2 Furth appellant eve hearing nor su nor offered a the above ad appellant has Hence, consid that the AO h
B
ITA No.

king the custody of all the documents and sub judice. The AO stated that the matte ance just because the matter is pending ts, until and unless there is such specifi rt. Hence in the absence of source of gen transactions the AO made an a 91/- u/s.69B of the Act.
er, in the appellate proceedings befor en after so many opportunities, neither a ubmitted any documents to substantiate shred of evidence to the contrary, to in dition was not justified. It is, thus, evide s no evidence to substantiate the grou dering the totality of above facts, I am of has rightly made addition of Rs. 1,9
he IT Act. Accordingly, addition of Rs. 1,9
is hereby confirmed. Thus, ground no. 2
pellant is dismissed.
n on Ground No. 3: In ground no. 3, th e AO has erred in making addition of Rs nexplained expenditure.
carefully considered the facts mentioned appellant submitted alongwith Form No.
als on the record on these issues. On per order, it was seen that the AO has men urvey proceedings it was seen that the ca of account was stated as Rs.4,16,399/- w found in the premises was only Rs.34,30
a difference of Rs.3,82,099/-. The app as to why the shortfall in the cash found s unexplained expenditure u/s.69C of th appellant did not file any submissions of any evidences the AO treated th
- as unexplained expenditure and made me u/s.69C of the IT Act.
er, in the appellate proceedings befor en after so many opportunities, neither a ubmitted any documents to substantiate shred of evidence to the contrary, to in dition was not justified. It is, thus, evide s no evidence to substantiate the grou dering the totality of above facts, I am of has rightly made addition of Rs. 3,82,099/
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d stock and er cannot be g before the c directions uineness of addition o re me, the ttended the his ground, ndicate that ent that the unds taken.
the opinion
90,40,291/-
90,40,291/-
2 of appeal e appellant
.3,82,099/- d by the AO,
35 and the rusal of the ntioned that ash in hand whereas the 00/-. Hence pellant was d should not he IT Act. In s. Hence, in he sum of addition to re me, the ttended the his ground, ndicate that ent that the unds taken.
the opinion
/- u/s. 69C of the Incom unexplained e made by AO raised by app
5.1 We have notice part of the assessee h
In our opinion, the reason for not compl of ld CIT(A) is lega recalcitrant, the judi unresponsive to the affidavit and the mat cogent detail, that d control of records by documents or corre facts, in our view, con of section 249(3) of justice.
5.2. The maxim audi unheard—is not an e procedure. When the was occasioned by ge contrary to equity an affording a meaningfu
B
ITA No.

me tax Act to the total income on expenditure. Accordingly, addition of Rs.
is hereby confirmed. Thus, ground no. 3
pellant is dismissed.”
d that the reasons for non-com have already been referred in th assessee was prevented by w lying before the Ld. CIT(A). Wh ally permissible where the app cial conscience of this Tribunal e peculiar circumstances eme terial placed before us. The affid due to partner disputes, IBC pr y other partners, the assessee c spondences necessary for com nstitute a “sufficient cause” with the Act, read with the princi i alteram partem—no one should empty ritual but a foundational e assessee has shown that its n enuine and demonstrable reaso nd justice to sustain an order ul opportunity of hearing.
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account of 3,82,099/-
3 of appeal mpliance on the he affidavit filed.
way of sufficient hile an approach pellant remains l cannot remain erging from the davit explains, in roceedings, and could not access mpliance. These hin the meaning iples of natural d be condemned postulate of fair non-appearance ons, it would be passed without

tances, we deem it just and pro of the learned CIT(A) and restor udication in accordance with law y to the assessee to present its c directed to extend full coopera o ensure that no unnecessary ad asonable and bona fide cause. Th assessee is accordingly allowed ered academic and therefore this stage.
or assessment year 2019–20, a d ut by the Registry. The reason hose discussed for the preced xplained in the same affidavit ng rendered in para 4 above, th d and the appeal is admitted.
iced that the learned CIT(A) has want of compliance. Having rega oning recorded while deciding th ly set aside the order of the lea restore the matter to his f ving due opportunity to the ass ents in support of its claim.
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oper to set aside re the matter to w, after affording case.
ation before the djournments are he ground No. 2
. The remaining e, we are not delay of 32 days s for the delay, ding assessment
. Following our he delay for this s disposed of the ard to the parity he appeal for AY arned CIT(A) for file for denovo sessee to submit

again directed to respond to al e authority with diligence and nts save in exceptional circu round No. 3 of the appeal for a dingly allowed and the remaini therefore, we are not adjudicati oth appeals are allowed for stati the appeals stands condoned.
ed CIT(A) for assessment year de, and the matters are restore n accordance with law after affo ng to the assessee.
ced in the open Court on 14/
- AR CHOUDHRY)
(OM PRAK
MEMBER
ACCOUNTA

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ll notices issued to refrain from umstances duly assessment year ing grounds are ing upon at this istical purposes.
The impugned s 2018–19 and ed to his file for ording adequate
10/2025. /-
KASH KANT)
ANT MEMBER

Copy of the Order forward
1. The Appellant
2. The Respondent.
3. CIT
4. DR, ITAT, Mumbai
5. Guard file.

////

B
ITA No.

ded to :

BY ORDER

(Assistant Re

ITAT, Mu

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R, gistrar) umbai