BLUFAB FASHION FABRICS LLP,ANDHERI KURLA ROAD V. DCIT CC 2(2), PRATISHTHA BHAVAN

ITA 4367/MUM/2025

AI Insights

The case involves appeals by Blufab Fashion Fabrics LLP against the orders of the Commissioner of Income-tax (Appeals) for the assessment years 2018-19 and 2019-20. The appeals were consolidated due to the similarity of issues involved. The primary contention was the non-provision of an effective opportunity of hearing and the legality of the orders passed under sections 143(3) and 250 of the Income Tax Act. The Tribunal noted the procedural lapses and the impact of internal disputes among the partners and ongoing IBC proceedings on the firm's ability to comply with procedural requirements. The Tribunal found that the assessee was prevented by reasonable cause from preferring the appeals within the prescribed period and thus admitted the appeals for adjudication on merits.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 779907 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2019-2020
• Appeal Filed On: 02-07-2025
• Other Referred Cases: Collector, Land Acquisition v. Mst. Katiji [(1987) 167 ITR 471 (SC)], CIT v. B.N. Bhattacharjee [(1979) 118 ITR 461 (SC)]
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: LEYAQAT ALI AAFAQUI
• Assessee Lawyers: DHARMESH SHAH; MITALI M. PAREKH
• Keywords: Condonation of delay; Set aside; Reasonable cause; Unexplained expenditure; Audi alteram partem
• Section: 147; 143(3); 69C

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “B” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI NARENDER KUMAR CHOUDHRY (JUDICIAL MEMBER) ITA No. 4366 & 4367/MUM/2025 Assessment Year: 2018-19 & 2019-2020 Blufab Fashion Fabrics LLP, 1st floor, Roop Industries, Andheri Kurla Road, Sakinaka, Mumbai-400072. Vs. DCIT CC-2(2), 806, 8th floor, Maharishi Karve Road, Mumbai-400020. PAN NO. AAOFB 4908 J Appellant Respondent Assessee by : Mr. Dharmesh Shah & Ms. Mitali M. Parekh Revenue by : Mr. Leyaqat Ali Aafaqui, Sr. DR Date of Hearing : 03/09/2025 Date of pronouncement : 14/10/2025 ORDER 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. Printed from counselvise.com 2. Firstly, we take up the appeal of the assessee for assessment year 2018-19. The grounds raised by the assessee are reproduce as under: 1. The Ld. CIT(A) has erred in law and in fact by not appreciating that the Ld. A.O. has passed an order u/s 143(3) of the Act which is bad in law and illegal. 2. The Ld. CIT(A) has erred in law and in facts in passing order u/s 250 of the Act without granting effective opportunity of hearing to the assessee. 3. The Ld. CIT(A) has erred in law and in facts in confirming the addition on account of unexplained money Rs. 1,90,40,291/ 69B of the Act 4. The Ld. CIT(A) has erred in law and in facts in confirming the addition of Rs. 3,82,099/ u/s 69C of 3. At the threshold our attention to the defective memo issued by the Registry pointing out a delay of 63 days in filing the present appeal. The learned counsel, however, clarified that as per the computation enclosed with the condonation application supported by a duly sworn affidavit, the actual delay in filing the appeal is of 82 days. He submitted that the delay has occurred due to bona fide and unavoidable circumstances beyond the control of the assessee and that there was no deliberate or contumacious conduct warranting penal consequences. the Income-tax affairs of the assessee Fabrics LLP, were being handled by a chartered accountancy firm which, owing to internal disputes amongst its partners, failed to Blufab Fashion Fabrics LLP ITA No. 4366 & 4367/MUM/2025 Firstly, we take up the appeal of the assessee for assessment 19. The grounds raised by the assessee are reproduce 1. The Ld. CIT(A) has erred in law and in fact by not appreciating that the Ld. A.O. has passed an order u/s 143(3) of the Act which is bad in law and illegal. 2. The Ld. CIT(A) has erred in law and in facts in passing order u/s 250 of the Act and confirming the addition made by Ld. A.O. without granting effective opportunity of hearing to the assessee. 3. The Ld. CIT(A) has erred in law and in facts in confirming the addition on account of unexplained money Rs. 1,90,40,291/ 69B of the Act as under valuation of stock. 4. The Ld. CIT(A) has erred in law and in facts in confirming the addition of Rs. 3,82,099/- on account of short fall in cash found the Act. At the threshold, the learned counsel for the assessee invited attention to the defective memo issued by the Registry pointing out a delay of 63 days in filing the present appeal. The learned counsel, however, clarified that as per the computation enclosed with the condonation application supported by a duly sworn idavit, the actual delay in filing the appeal is of 82 days. He submitted that the delay has occurred due to bona fide and unavoidable circumstances beyond the control of the assessee and that there was no deliberate or contumacious conduct warranting l consequences. The learned counsel further submitted that tax affairs of the assessee-firm, M/s Blufab Fashion , were being handled by a chartered accountancy firm which, owing to internal disputes amongst its partners, failed to Blufab Fashion Fabrics LLP 2 ITA No. 4366 & 4367/MUM/2025 Firstly, we take up the appeal of the assessee for assessment 19. The grounds raised by the assessee are reproduced 1. The Ld. CIT(A) has erred in law and in fact by not appreciating that the Ld. A.O. has passed an order u/s 143(3) of the Act 2. The Ld. CIT(A) has erred in law and in facts in passing order and confirming the addition made by Ld. A.O. without granting effective opportunity of hearing to the assessee. 3. The Ld. CIT(A) has erred in law and in facts in confirming the addition on account of unexplained money Rs. 1,90,40,291/-u/s 4. The Ld. CIT(A) has erred in law and in facts in confirming the on account of short fall in cash found , the learned counsel for the assessee invited attention to the defective memo issued by the Registry pointing out a delay of 63 days in filing the present appeal. The learned counsel, however, clarified that as per the computation enclosed with the condonation application supported by a duly sworn idavit, the actual delay in filing the appeal is of 82 days. He submitted that the delay has occurred due to bona fide and unavoidable circumstances beyond the control of the assessee and that there was no deliberate or contumacious conduct warranting The learned counsel further submitted that M/s Blufab Fashion , were being handled by a chartered accountancy firm which, owing to internal disputes amongst its partners, failed to Printed from counselvise.com make effective representation before the learned CIT(A). Consequently, the order passed by the first appellate authority was not communicated to the assessee. It was only upon the appointment of a new counsel and verification of the Income Tax portal that the assessee became aware of the order and promptly preferred the present appeal. reproduced as under: 1. I say that I am one of the partners of Blufab Fashion Fabrics LLP along with other partners, namely Mr. Luv Harish Mr. Kush Harish Arya. 2. I say that for A.Y. 2018 on 30.10.2018 3 declaring total income at Rs. 1,98,93,236/ 3. 1 say that a survey action was conducted on the firm on 31.01.2018 wherein certain discrepan Subsequently, the case was selected for scrutiny. I say that after centralization of the case on 23.04.2021, various notices were issued. 4. I say that in the meantime, a dispute arose between the partners of the firm and we accordingly se that subsequently on 03.12.2020, I, as the partner of the firm, filed a commercial arbitration petition against other partners before the Hon'ble Bombay High Court on the ground that they were illegally selling raw materials and fini to the firm. 5. I further state that IBC proceedings were also initiated against the firm by one of the creditors of the firm before the Hon'ble the NCLT on 04.12.2019. 6. I say that meanwhile, notices were issued by the Ld. A.O. for carrying out the assessment proceedings for A.Y. 2018 May 2021 to June 2021. 7. I say that these notices could not be attended due to ongoing Covid-19 pandemic (2nd phase) which was prevalent during the said period.\" Blufab Fashion Fabrics LLP ITA No. 4366 & 4367/MUM/2025 e effective representation before the learned CIT(A). Consequently, the order passed by the first appellate authority was not communicated to the assessee. It was only upon the appointment of a new counsel and verification of the Income Tax assessee became aware of the order and promptly preferred the present appeal. The relevant part of the affidavit is reproduced as under: I say that I am one of the partners of Blufab Fashion Fabrics LLP along with other partners, namely Mr. Luv Harish Mr. Kush Harish Arya. I say that for A.Y. 2018-19, the firm filed its return of income on 30.10.2018 3 declaring total income at Rs. 1,98,93,236/ 3. 1 say that a survey action was conducted on the firm on 31.01.2018 wherein certain discrepancies were found. Subsequently, the case was selected for scrutiny. I say that after centralization of the case on 23.04.2021, various notices were 4. I say that in the meantime, a dispute arose between the partners of the firm and we accordingly separated in 2018. I say that subsequently on 03.12.2020, I, as the partner of the firm, filed a commercial arbitration petition against other partners before the Hon'ble Bombay High Court on the ground that they were illegally selling raw materials and finished goods belonging 5. I further state that IBC proceedings were also initiated against the firm by one of the creditors of the firm before the Hon'ble the NCLT on 04.12.2019. 6. I say that meanwhile, notices were issued by the Ld. A.O. for arrying out the assessment proceedings for A.Y. 2018 May 2021 to June 2021. 7. I say that these notices could not be attended due to ongoing 19 pandemic (2nd phase) which was prevalent during the Blufab Fashion Fabrics LLP 3 ITA No. 4366 & 4367/MUM/2025 e effective representation before the learned CIT(A). Consequently, the order passed by the first appellate authority was not communicated to the assessee. It was only upon the appointment of a new counsel and verification of the Income Tax assessee became aware of the order and promptly The relevant part of the affidavit is I say that I am one of the partners of Blufab Fashion Fabrics LLP along with other partners, namely Mr. Luv Harish Arya and 19, the firm filed its return of income on 30.10.2018 3 declaring total income at Rs. 1,98,93,236/-. 3. 1 say that a survey action was conducted on the firm on cies were found. Subsequently, the case was selected for scrutiny. I say that after centralization of the case on 23.04.2021, various notices were 4. I say that in the meantime, a dispute arose between the parated in 2018. I say that subsequently on 03.12.2020, I, as the partner of the firm, filed a commercial arbitration petition against other partners before the Hon'ble Bombay High Court on the ground that they shed goods belonging 5. I further state that IBC proceedings were also initiated against the firm by one of the creditors of the firm before the Hon'ble the 6. I say that meanwhile, notices were issued by the Ld. A.O. for arrying out the assessment proceedings for A.Y. 2018-19 during 7. I say that these notices could not be attended due to ongoing 19 pandemic (2nd phase) which was prevalent during the Printed from counselvise.com 8. I say that complia Arya and Mr. Kush Harish Arya, other partners of the firm with the help of the chartered accountant who was also looking after their personal affairs. In order to have effective compliance, the email ID of the partners of t AD Atul Gupta being [e-mail] was registered. I say that the notices Would have been served upon the email address of the said partners and the said 9. I say that when I realized about proceedings during June, 2021, I immediately sent an email informing the Ld. A.O. of the dispute amongst the partners and the fact that the records of the firm were with other partner. 1 therefore requested that the compliance to th be done by other partners of the Arya family. 10. I say that since the details and the documents could not be sought from the oth the assessment proceedings and assessment was completed u/s. 143(3) of the Act on 15.06.2021 making the several additions and determining the total income at Rs. 3,93,15,626/ 11. ⁠I say that even the said order was served upon the email ID of the C.A. Atul Gupta and hence was not received by me. When I visited the I-T portal to verify the status of the assessment, I found the said order issued on 15.06.2021. 12. I say that I immediately contacted the CA Atul Gupta and asked him to file the appeal immediately which was accordingly filed on 20.09.2021. 13. I say since the said C.A. Atul Gupta was looking after the affairs of the firm since past few years and he was also in communication of other partners of Arya family, he was in better position to obtain records from them and also represent the appeal. 1 therefore and carry out compliance. 14. I say that however, even the said chartered accountant could not obtain the records and could not represent before the Ld. CIT(A). He filed reply to one of the notices issued in and October, 2022 requesting for adjournment. 15. I say that in the meantime, the assessment order came to be passed by the Ld. A.O. also in case of the firm for A.Y. 2019 vide his order u/s. 147 r.w.s. 144 of the Act dated 05.03.2024. Immediately, o Blufab Fashion Fabrics LLP ITA No. 4366 & 4367/MUM/2025 I say that compliances were looked after by Mr. Kush Arya and Mr. Kush Harish Arya, other partners of the firm with the help of the chartered accountant who was also looking after their personal affairs. In order to have effective compliance, the email ID of the partners of the Arya family and the said C.A. Mr. AD Atul Gupta being [e-mail] was registered. I say that the notices Would have been served upon the email address of the said partners and the said chartered accountant. I say that when I realized about the ongoing assessment proceedings during June, 2021, I immediately sent an email informing the Ld. A.O. of the dispute amongst the partners and the fact that the records of the firm were with other partner. 1 therefore requested that the compliance to the I-T notices was to be done by other partners of the Arya family. say that since the details and the documents could not be sought from the other partners, I could not make a compliance to the assessment proceedings and assessment was completed 143(3) of the Act on 15.06.2021 making the several additions and determining the total income at Rs. 3,93,15,626/ ay that even the said order was served upon the email ID of the C.A. Atul Gupta and hence was not received by me. When I T portal to verify the status of the assessment, I found the said order issued on 15.06.2021. 12. I say that I immediately contacted the CA Atul Gupta and asked him to file the appeal immediately which was accordingly filed on 20.09.2021. ince the said C.A. Atul Gupta was looking after the affairs of the firm since past few years and he was also in communication of other partners of Arya family, he was in better position to obtain records from them and also represent the appeal. 1 therefore requested him to represent the said appeal and carry out compliance. 14. I say that however, even the said chartered accountant could not obtain the records and could not represent before the Ld. CIT(A). He filed reply to one of the notices issued in and October, 2022 requesting for adjournment. 15. I say that in the meantime, the assessment order came to be passed by the Ld. A.O. also in case of the firm for A.Y. 2019 vide his order u/s. 147 r.w.s. 144 of the Act dated 05.03.2024. Immediately, on noticing the said order, I requested the said CA Blufab Fashion Fabrics LLP 4 ITA No. 4366 & 4367/MUM/2025 Kush Harish Arya and Mr. Kush Harish Arya, other partners of the firm with the help of the chartered accountant who was also looking after their personal affairs. In order to have effective compliance, the he Arya family and the said C.A. Mr. AD Atul Gupta being [e-mail] was registered. I say that the notices Would have been served upon the email hartered accountant. the ongoing assessment proceedings during June, 2021, I immediately sent an email informing the Ld. A.O. of the dispute amongst the partners and the fact that the records of the firm were with other partner. 1 T notices was to say that since the details and the documents could not be compliance to the assessment proceedings and assessment was completed 143(3) of the Act on 15.06.2021 making the several additions and determining the total income at Rs. 3,93,15,626/-. ay that even the said order was served upon the email ID of the C.A. Atul Gupta and hence was not received by me. When I T portal to verify the status of the assessment, I 12. I say that I immediately contacted the CA Atul Gupta and asked him to file the appeal immediately which was accordingly ince the said C.A. Atul Gupta was looking after the affairs of the firm since past few years and he was also in communication of other partners of Arya family, he was in better position to obtain records from them and also represent the requested him to represent the said appeal 14. I say that however, even the said chartered accountant could not obtain the records and could not represent before the Ld. CIT(A). He filed reply to one of the notices issued in and around 15. I say that in the meantime, the assessment order came to be passed by the Ld. A.O. also in case of the firm for A.Y. 2019-20 vide his order u/s. 147 r.w.s. 144 of the Act dated 05.03.2024. n noticing the said order, I requested the said CA Printed from counselvise.com Atul Gupta to file the appeal against the said order and ensure that necessary action is taken to resolve the said demands. 16. say that thereafter, since the said CA Atul Gupta was also not getting any co withdrew himself from handling the said matters and informed of his intentions to the partners of the Arya family. 17. I say that, upon knowing that he has willingly withdrew himself from attending the appea the notices are attended and atleast request for adjournment is filed, I appointed another chartered accountant, CA Mr. Rajendra Laddha in and around October, 2024, to take care of the said appellate matters. 18. I say that since the email ID of the Arya family and earlier CA Atul Gupta was registered in the I access to the notices issued by the Ld. CIT(A). Hence, the said new chartered accountant used to occasionally visit the portal to check the issue to notices in appeal. I say that when he noticed The receipt of notice for hearing during November, 2024, he filed the reply to the said notice requesting for adjournment. 19. 1 also say that in the petition filed before Hon'ble Bombay High Court, the issue was w.r.t. illegal sale of the stock and I had prayed that all documents w.r.t. said stock as well as all inventory be provided to the firm. I say that until such documents and inventory were provided to the firm, no submissions could have been made before the Ld. CIT(A). I further say that I was under impression that until the CIRP was appointed, the firm could not make any submissions before the Ld. CIT(A) as moratorium period would be declared due to which I would be unable to go ahead with 20. I say that the Ed. CIT(A) disregarded the adjournment requests filed and passed an order u/s. 250 on 10.02.2025 dismissing the appeal filed by the firm. 21. 1 say that even the said order was not received by me in email as the same wo Atul Gupta whose email ID was registered on the I partners of Arya family. 22. I say that subsequently, even the appeal against the order u/s. 147 r.w.s. 143(3) of the Act for A.Y. 2019 05.03.2024 was also disposed off due to non the order was passed on 21.03.2025. Blufab Fashion Fabrics LLP ITA No. 4366 & 4367/MUM/2025 Atul Gupta to file the appeal against the said order and ensure that necessary action is taken to resolve the said demands. 16. say that thereafter, since the said CA Atul Gupta was also not getting any co- Operation from the partners of Arya family, he withdrew himself from handling the said matters and informed of his intentions to the partners of the Arya family. 17. I say that, upon knowing that he has willingly withdrew himself from attending the appeal matters, in order to ensure that the notices are attended and atleast request for adjournment is filed, I appointed another chartered accountant, CA Mr. Rajendra Laddha in and around October, 2024, to take care of the said appellate matters. at since the email ID of the Arya family and earlier CA Atul Gupta was registered in the I-T Portal, I was unable to have access to the notices issued by the Ld. CIT(A). Hence, the said new chartered accountant used to occasionally visit the portal to k the issue to notices in appeal. I say that when he noticed The receipt of notice for hearing during November, 2024, he filed the reply to the said notice requesting for adjournment. 19. 1 also say that in the petition filed before Hon'ble Bombay rt, the issue was w.r.t. illegal sale of the stock and I had prayed that all documents w.r.t. said stock as well as all inventory be provided to the firm. I say that until such documents and inventory were provided to the firm, no submissions could en made before the Ld. CIT(A). I further say that I was under impression that until the CIRP was appointed, the firm could not make any submissions before the Ld. CIT(A) as moratorium period would be declared due to which I would be unable to go ahead with the proceedings. 20. I say that the Ed. CIT(A) disregarded the adjournment requests filed and passed an order u/s. 250 on 10.02.2025 dismissing the appeal filed by the firm. 21. 1 say that even the said order was not received by me in email as the same would have been received by the erstwhile CA Atul Gupta whose email ID was registered on the I-T Portal or by partners of Arya family. 22. I say that subsequently, even the appeal against the order u/s. 147 r.w.s. 143(3) of the Act for A.Y. 2019 03.2024 was also disposed off due to non- attendance and the order was passed on 21.03.2025. Blufab Fashion Fabrics LLP 5 ITA No. 4366 & 4367/MUM/2025 Atul Gupta to file the appeal against the said order and ensure that necessary action is taken to resolve the said demands. 16. say that thereafter, since the said CA Atul Gupta was also Operation from the partners of Arya family, he withdrew himself from handling the said matters and informed of 17. I say that, upon knowing that he has willingly withdrew l matters, in order to ensure that the notices are attended and atleast request for adjournment is filed, I appointed another chartered accountant, CA Mr. Rajendra Laddha in and around October, 2024, to take care of the said at since the email ID of the Arya family and earlier CA T Portal, I was unable to have access to the notices issued by the Ld. CIT(A). Hence, the said new chartered accountant used to occasionally visit the portal to k the issue to notices in appeal. I say that when he noticed The receipt of notice for hearing during November, 2024, he filed the reply to the said notice requesting for adjournment. 19. 1 also say that in the petition filed before Hon'ble Bombay rt, the issue was w.r.t. illegal sale of the stock and I had prayed that all documents w.r.t. said stock as well as all inventory be provided to the firm. I say that until such documents and inventory were provided to the firm, no submissions could en made before the Ld. CIT(A). I further say that I was under impression that until the CIRP was appointed, the firm could not make any submissions before the Ld. CIT(A) as moratorium period would be declared due to which I would be 20. I say that the Ed. CIT(A) disregarded the adjournment requests filed and passed an order u/s. 250 on 10.02.2025 21. 1 say that even the said order was not received by me in uld have been received by the erstwhile CA T Portal or by 22. I say that subsequently, even the appeal against the order u/s. 147 r.w.s. 143(3) of the Act for A.Y. 2019-20 dated attendance and Printed from counselvise.com 23. \"I say that on my request, when the said new C.A. Rajendra Laddha visited the Portal to verify the status of the appeal; he found that the appeals for A.Y. 201 already disposed off vide orders dated 10.02.2025 and 21.03.2025 respectively. 24 say that immediately knowing of the said orders passed, I requested the said CA Rajendra Laddha to file the appeals for the both the years before 25. I say that the non as well as delay in filing the appeal before Hon'ble Tribunal was not intentional but was purely due to genuine reasons beyond the control of the firm. There is no malafide inte of the firm or its partners. 26. I say that the reasons for delay in filing the appeal are also explained in detail in the prayer for condonation of delay being filed before Hon'ble Tribunal and I affirm the facts stated therein to be true and 3.1 The learned counsel relied upon the principles laid down by the Hon’ble Supreme Court in Katiji [(1987) 167 ITR 471 (SC)] to contend that when substantial justice and technical considerations are pitted against each other, the cause of substantial justice must prevail. He urged that the delay in the present case, being occasioned by genuine difficul and not by negligence or indifference, deserves to be condoned. 4. We have carefully considered the rival submissions and perused the record. The chronology of events, as evidenced by the detailed affidavit of one of the partners of the assessee unmistakably shows that the delay in filing the appeal has occurred on account of peculiar circumstances involving internecine disputes between partners, ongoing litigation before the Hon’ble Bombay Blufab Fashion Fabrics LLP ITA No. 4366 & 4367/MUM/2025 23. \"I say that on my request, when the said new C.A. Rajendra Laddha visited the Portal to verify the status of the appeal; he found that the appeals for A.Y. 2018-19 and A.Y. 2019 already disposed off vide orders dated 10.02.2025 and 21.03.2025 respectively. 24 say that immediately knowing of the said orders passed, I requested the said CA Rajendra Laddha to file the appeals for the both the years before Hon'ble ITAT. 25. I say that the non-appearance before Ld. A.O. and Ld. CIT(A) as well as delay in filing the appeal before Hon'ble Tribunal was not intentional but was purely due to genuine reasons beyond ntrol of the firm. There is no malafide intention on the part of the firm or its partners. say that the reasons for delay in filing the appeal are also explained in detail in the prayer for condonation of delay being filed before Hon'ble Tribunal and I affirm the facts stated therein and correct. The learned counsel relied upon the principles laid down by the Hon’ble Supreme Court in Collector, Land Acquisition v. Mst. [(1987) 167 ITR 471 (SC)] to contend that when substantial justice and technical considerations are pitted against each other, the cause of substantial justice must prevail. He urged that the delay in the present case, being occasioned by genuine difficul and not by negligence or indifference, deserves to be condoned. We have carefully considered the rival submissions and perused the record. The chronology of events, as evidenced by the detailed affidavit of one of the partners of the assessee unmistakably shows that the delay in filing the appeal has occurred on account of peculiar circumstances involving internecine disputes between partners, ongoing litigation before the Hon’ble Bombay Blufab Fashion Fabrics LLP 6 ITA No. 4366 & 4367/MUM/2025 23. \"I say that on my request, when the said new C.A. Rajendra Laddha visited the Portal to verify the status of the appeal; he 19 and A.Y. 2019-20 were already disposed off vide orders dated 10.02.2025 and 24 say that immediately knowing of the said orders passed, I requested the said CA Rajendra Laddha to file the appeals for appearance before Ld. A.O. and Ld. CIT(A) as well as delay in filing the appeal before Hon'ble Tribunal was not intentional but was purely due to genuine reasons beyond ntion on the part say that the reasons for delay in filing the appeal are also explained in detail in the prayer for condonation of delay being filed before Hon'ble Tribunal and I affirm the facts stated therein The learned counsel relied upon the principles laid down by Collector, Land Acquisition v. Mst. [(1987) 167 ITR 471 (SC)] to contend that when substantial justice and technical considerations are pitted against each other, the cause of substantial justice must prevail. He urged that the delay in the present case, being occasioned by genuine difficulties and not by negligence or indifference, deserves to be condoned. We have carefully considered the rival submissions and perused the record. The chronology of events, as evidenced by the detailed affidavit of one of the partners of the assessee-firm, unmistakably shows that the delay in filing the appeal has occurred on account of peculiar circumstances involving internecine disputes between partners, ongoing litigation before the Hon’ble Bombay Printed from counselvise.com High Court, insolvency proceedings before the Hon’ble NC lack of access to firm records and email credentials. 4.1. The affidavit elaborately narrates how notices and orders were sent to the email ID of the erstwhile chartered accountant and the other partners of the Arya family, which effectively depriv assessee of notice and opportunity at various stages. Upon appointment of new counsel, the assessee took immediate corrective steps and filed the appeal without any undue lapse of time. 4.2. On a conspectus of these facts, we are of the considered opinion that the delay was neither deliberate nor attributable to gross negligence. It is settled law that “sufficient cause” should receive a liberal construction to advance the ends of justice, as laid down by the Hon’ble Supreme Court in Mst. Katiji (supra 4.3. In the totality of the circumstances, we are satisfied that the assessee was prevented by reasonable cause in not preferring the appeal within the prescribed period. Accordingly, the delay in filing the appeal is condoned and the appeal is admitted for adjudication on merits. 5. Upon perusal of the impugned appellate order, it is seen that the learned CIT(A) had issued multiple notices between July 2022 and January 2025, but no effective compliance was made by the Blufab Fashion Fabrics LLP ITA No. 4366 & 4367/MUM/2025 High Court, insolvency proceedings before the Hon’ble NC lack of access to firm records and email credentials. 4.1. The affidavit elaborately narrates how notices and orders were sent to the email ID of the erstwhile chartered accountant and the other partners of the Arya family, which effectively depriv assessee of notice and opportunity at various stages. Upon appointment of new counsel, the assessee took immediate corrective steps and filed the appeal without any undue lapse of time. 4.2. On a conspectus of these facts, we are of the considered pinion that the delay was neither deliberate nor attributable to gross negligence. It is settled law that “sufficient cause” should receive a liberal construction to advance the ends of justice, as laid down by the Hon’ble Supreme Court in Collector, Land 4.3. In the totality of the circumstances, we are satisfied that the assessee was prevented by reasonable cause in not preferring the appeal within the prescribed period. Accordingly, the delay in filing oned and the appeal is admitted for adjudication Upon perusal of the impugned appellate order, it is seen that the learned CIT(A) had issued multiple notices between July 2022 and January 2025, but no effective compliance was made by the Blufab Fashion Fabrics LLP 7 ITA No. 4366 & 4367/MUM/2025 High Court, insolvency proceedings before the Hon’ble NCLT, and 4.1. The affidavit elaborately narrates how notices and orders were sent to the email ID of the erstwhile chartered accountant and the other partners of the Arya family, which effectively deprived the assessee of notice and opportunity at various stages. Upon appointment of new counsel, the assessee took immediate corrective steps and filed the appeal without any undue lapse of time. 4.2. On a conspectus of these facts, we are of the considered pinion that the delay was neither deliberate nor attributable to gross negligence. It is settled law that “sufficient cause” should receive a liberal construction to advance the ends of justice, as laid Collector, Land Acquisition v. 4.3. In the totality of the circumstances, we are satisfied that the assessee was prevented by reasonable cause in not preferring the appeal within the prescribed period. Accordingly, the delay in filing oned and the appeal is admitted for adjudication Upon perusal of the impugned appellate order, it is seen that the learned CIT(A) had issued multiple notices between July 2022 and January 2025, but no effective compliance was made by the Printed from counselvise.com assessee. The learned CIT(A), therefore, proceeded to dispose of the appeal ex parte, relying upon the ratio of and Another [(1979) 118 ITR 461 (SC)], that filing an appeal implies an obligation to prosecute it effectively. Ld. CIT(A) is reproduced as under: “7. During the course of appellate proceedings, the following hearing notices u/s 250 of the Income to the appellant: 1. Notice dated 20.07.2022 asking the appellant to attend hearing on or before 25.08.2022 by 03:00 PM. 2. Notice dated 13.09.2022 asking the appellant to attend the hearing on or before 26.09.2022 by 03:00 PM. 3. Notice dated 04.10.2022 asking the appellant to attend the hearing on or before 11.10.2022 by 03: 4. Notice dated 03.10.2023 asking the appellant to attend the hearing on or before 12.10.2023 by 04:00 PM. 5. Notice dated 23.10.2023 asking the appellant to attend the hearing on or before 12.12.2023 by 03:00 PM. 6. ⁠Notice dated 27.06.2024 asking hearing on or before 12.07.2024 by 11:00 AM. 7. Notice dated 13.11.2024 asking the appellant to attend the hearing on or before 19.11.2024 by 12:20 PM. 8. Notice dated 22.01.2025 asking the appellant to attend the hearing on or It is pertinent to note that in order to decide this appeal in a timely manner, a number of notices/communications through the ITBA portal were sent to the appellant, viz., communications dated 20.07.2022, 13.09.2022, 04.10. 23.10.2023, 27.06.2024, 13.11.2024, and 22.01.2025.In response to the notices sent, the appellant is merely seeking adjournment. There is no gainsaying that once the appeal is filed by the appellant, it is obligatory on his part to purpos co- operatively pursue the same in a worthwhile manner, which Blufab Fashion Fabrics LLP ITA No. 4366 & 4367/MUM/2025 ssee. The learned CIT(A), therefore, proceeded to dispose of the appeal ex parte, relying upon the ratio of CIT v. B.N. Bhattacharjee [(1979) 118 ITR 461 (SC)], that filing an appeal implies an obligation to prosecute it effectively. The relevant finding of the Ld. CIT(A) is reproduced as under: 7. During the course of appellate proceedings, the following hearing notices u/s 250 of the Income-tax Act, 1961, were issued to the appellant: 1. Notice dated 20.07.2022 asking the appellant to attend hearing on or before 25.08.2022 by 03:00 PM. 2. Notice dated 13.09.2022 asking the appellant to attend the hearing on or before 26.09.2022 by 03:00 PM. 3. Notice dated 04.10.2022 asking the appellant to attend the hearing on or before 11.10.2022 by 03:00 PM. 4. Notice dated 03.10.2023 asking the appellant to attend the hearing on or before 12.10.2023 by 04:00 PM. 5. Notice dated 23.10.2023 asking the appellant to attend the hearing on or before 12.12.2023 by 03:00 PM. Notice dated 27.06.2024 asking the appellant to attend the hearing on or before 12.07.2024 by 11:00 AM. 7. Notice dated 13.11.2024 asking the appellant to attend the hearing on or before 19.11.2024 by 12:20 PM. Notice dated 22.01.2025 asking the appellant to attend the before 28.01.2025 by 03:43 PM. It is pertinent to note that in order to decide this appeal in a timely manner, a number of notices/communications through the ITBA portal were sent to the appellant, viz., communications dated 20.07.2022, 13.09.2022, 04.10.2022, 03.10.2023, 23.10.2023, 27.06.2024, 13.11.2024, and 22.01.2025.In response to the notices sent, the appellant is merely seeking adjournment. There is no gainsaying that once the appeal is filed by the appellant, it is obligatory on his part to purpos operatively pursue the same in a worthwhile manner, which Blufab Fashion Fabrics LLP 8 ITA No. 4366 & 4367/MUM/2025 ssee. The learned CIT(A), therefore, proceeded to dispose of the CIT v. B.N. Bhattacharjee [(1979) 118 ITR 461 (SC)], that filing an appeal implies nt finding of the 7. During the course of appellate proceedings, the following tax Act, 1961, were issued 1. Notice dated 20.07.2022 asking the appellant to attend the 2. Notice dated 13.09.2022 asking the appellant to attend the 3. Notice dated 04.10.2022 asking the appellant to attend the 4. Notice dated 03.10.2023 asking the appellant to attend the 5. Notice dated 23.10.2023 asking the appellant to attend the the appellant to attend the 7. Notice dated 13.11.2024 asking the appellant to attend the Notice dated 22.01.2025 asking the appellant to attend the It is pertinent to note that in order to decide this appeal in a timely manner, a number of notices/communications through the ITBA portal were sent to the appellant, viz., communications 2022, 03.10.2023, 23.10.2023, 27.06.2024, 13.11.2024, and 22.01.2025.In response to the notices sent, the appellant is merely seeking adjournment. There is no gainsaying that once the appeal is filed by the appellant, it is obligatory on his part to purposefully and operatively pursue the same in a worthwhile manner, which Printed from counselvise.com the appellant has evidently failed to do. It clearly appears that the appellant has not even bothered to pursue this appeal in any productive manner. Hence, in view of the aforesaid t compliance/non prosecution of the instant appeal on the part of the appellant, the instant appeal is adjudicated and disposed off, ex-parte, primarily on the basis documents/details available on record, which is as under. 8. At the outset, that in case, as evidently seen from the above, this appeal is liable to be dismissed in terms of the ratio of the judgements of the Hon'ble Apex Court and the various High Courts including the Hon'ble Apex Court which hel (10 CTR 354) that an appeal means an effective appeal and that to \"prefer an appeal\" would mean effectively prosecuting an appeal. \"Purposefully and constructively interpreted, preferring an appeal means more th pursuing it and if a party retreats before the contest begins, it is as good as not having entered the fray. 9. It is pertinent to add here that laws assist those who are vigilant and not those who sleep over their rig is embodied in the well dormientibus jura subveniunt\". It means equity comes to the aid of the vigilant and not the slumbering. In all actions, suits and other proceedings at law and in equity, the diligent plaintiff is favoured and prejudicial of him who is careless. Viewed thus, it is presumed that the appellant has no further cogent reasoning or/and evidence to substantiate the grounds taken in this impugned appeal. It is trite that the onus i person making the claim, and the primary responsibility/onus/burden for proving the claim made before the tax authorities (Assessing Officers/Appellate Authorities) lies with the appellant/appellant. In the present case, the appellant has not been abl statutorily & judicially cast upon him to substantiate the claims made in the grounds of appeal in spite of adequate time and opportunities given as brought out in the foregoing paras. 10. It is, thus, evident th substantiate the grounds taken and it has not even once argued with any supporting, relevant and cogent arguments/averments, constraining me to, therefore, go through the extremely brief non speaking submission appearing statement of facts filed along on the merits while adjudicating the same. I am constrained to concur with the AO's findings of fact and decisions thereof, more Blufab Fashion Fabrics LLP ITA No. 4366 & 4367/MUM/2025 the appellant has evidently failed to do. It clearly appears that the appellant has not even bothered to pursue this appeal in any productive manner. Hence, in view of the aforesaid t compliance/non prosecution of the instant appeal on the part of the appellant, the instant appeal is adjudicated and disposed off, parte, primarily on the basis documents/details available on record, which is as under. 8. At the outset, that in the situation as obtained in the instant case, as evidently seen from the above, this appeal is liable to be dismissed in terms of the ratio of the judgements of the Hon'ble Apex Court and the various High Courts including the Hon'ble Apex Court which held in CIT v. B. N. Bhattarcharjee and Another (10 CTR 354) that an appeal means an effective appeal and that to \"prefer an appeal\" would mean effectively prosecuting an appeal. \"Purposefully and constructively interpreted, preferring an appeal means more than formally filing it but effectively pursuing it and if a party retreats before the contest begins, it is as good as not having entered the fray. 9. It is pertinent to add here that laws assist those who are vigilant and not those who sleep over their rights. This principle is embodied in the well-known maxim \"Vigilantibus non dormientibus jura subveniunt\". It means equity comes to the aid of the vigilant and not the slumbering. In all actions, suits and other proceedings at law and in equity, the diligent and careful plaintiff is favoured and prejudicial of him who is careless. Viewed thus, it is presumed that the appellant has no further cogent reasoning or/and evidence to substantiate the grounds taken in this impugned appeal. It is trite that the onus i person making the claim, and the primary responsibility/onus/burden for proving the claim made before the tax authorities (Assessing Officers/Appellate Authorities) lies with the appellant/appellant. In the present case, the appellant has not been able to even discharge the primary onus/burden statutorily & judicially cast upon him to substantiate the claims made in the grounds of appeal in spite of adequate time and opportunities given as brought out in the foregoing paras. 10. It is, thus, evident that the appellant has no evidence to substantiate the grounds taken and it has not even once argued with any supporting, relevant and cogent arguments/averments, constraining me to, therefore, go through the extremely brief non speaking submission appearing in the grounds of appeal and statement of facts filed along-with the impugned appeal to decide on the merits while adjudicating the same. I am constrained to concur with the AO's findings of fact and decisions thereof, more Blufab Fashion Fabrics LLP 9 ITA No. 4366 & 4367/MUM/2025 the appellant has evidently failed to do. It clearly appears that the appellant has not even bothered to pursue this appeal in any productive manner. Hence, in view of the aforesaid total non- compliance/non prosecution of the instant appeal on the part of the appellant, the instant appeal is adjudicated and disposed off, parte, primarily on the basis documents/details available on the situation as obtained in the instant case, as evidently seen from the above, this appeal is liable to be dismissed in terms of the ratio of the judgements of the Hon'ble Apex Court and the various High Courts including the Hon'ble d in CIT v. B. N. Bhattarcharjee and Another (10 CTR 354) that an appeal means an effective appeal and that to \"prefer an appeal\" would mean effectively prosecuting an appeal. \"Purposefully and constructively interpreted, preferring an formally filing it but effectively pursuing it and if a party retreats before the contest begins, it is 9. It is pertinent to add here that laws assist those who are hts. This principle known maxim \"Vigilantibus non dormientibus jura subveniunt\". It means equity comes to the aid of the vigilant and not the slumbering. In all actions, suits and and careful plaintiff is favoured and prejudicial of him who is careless. Viewed thus, it is presumed that the appellant has no further cogent reasoning or/and evidence to substantiate the grounds taken in this impugned appeal. It is trite that the onus is on person making the claim, and the primary responsibility/onus/burden for proving the claim made before the tax authorities (Assessing Officers/Appellate Authorities) lies with the appellant/appellant. In the present case, the appellant e to even discharge the primary onus/burden statutorily & judicially cast upon him to substantiate the claims made in the grounds of appeal in spite of adequate time and opportunities given as brought out in the foregoing paras. at the appellant has no evidence to substantiate the grounds taken and it has not even once argued with any supporting, relevant and cogent arguments/averments, constraining me to, therefore, go through the extremely brief non- in the grounds of appeal and with the impugned appeal to decide on the merits while adjudicating the same. I am constrained to concur with the AO's findings of fact and decisions thereof, more Printed from counselvise.com particularly in the absence of submissions/documentations even during the instant appellate proceedings in this case to counter effectively the position adopted by the AO on the concerned issues and reduced in writing in the assessment order. 11. I have carefully perused the facts of the appellant's case and the order of the Assessing Officer. It is observed from the facts of the case that the appellant has failed to furnish any documentary evidence to the issue raised by them in the appeal In connection made on account unexplained money and unexplained expenditure Considering the above facts, I decide the appeal on the basis of facts mentioned by AO in the assessment order and facts submitted by appellant 12. APPELLATE DECISION: 12.1 Decision on Ground No. 1: This ground is genera nature and all the adjudicated in subsequent paragraphs, therefore, no separate adjudication of this no. 1 of appeal is dismissed. 12.2 Decision on Ground No. 2: In ground no. 2, the appellant urged that the AO has erred in making addition of Rs.1,90,40,291 u/s.698 as unexplained money on account of undervaluation of closing stock. 12.2.1 I have carefully considered the facts mentioned by the AO, facts of the appellant submitted alongwith Form No. 35 and the other materials on the record on these issues. The AO has pointed out that during the survey proceedings appellant's case, the inventory of the stock taken during the survey action conducted on 31.01.2018 was Rs.6,91,55,437/ and total stock as per the books amounted to Rs.5,01,15,146/ There was a difference of Rs. 1,90,40,291/ statement of Shri. Luv Arya (partner) during the survey action, he admitted that excess stock amounting to Rs.1,90,40,291/ not recorded as those were lying outstation. 12.2.2. In the above connection, the appellant was showcaused as to why R unexplained money u/s.698 of the IT Act. In response the appellant submitted that the proceedings are pending in the court Blufab Fashion Fabrics LLP ITA No. 4366 & 4367/MUM/2025 particularly in the absence of any meaningful and worthwhile submissions/documentations even during the instant appellate proceedings in this case to counter effectively the position adopted by the AO on the concerned issues and reduced in writing in the assessment order. carefully perused the facts of the appellant's case and the order of the Assessing Officer. It is observed from the facts of the case that the appellant has failed to furnish any documentary evidence to the issue raised by them in the appeal In connection with additions made by the AO regarding additions made on account unexplained money and unexplained expenditure Considering the above facts, I decide the appeal on the basis of facts mentioned by AO in the assessment order and facts submitted by appellant along-with Form No. 35. 12. APPELLATE DECISION: 12.1 Decision on Ground No. 1: This ground is genera nature and all the detailed ground raised by the appellant are adjudicated in subsequent paragraphs, therefore, no separate adjudication of this ground is required. Accordingly, the ground no. 1 of appeal is dismissed. 12.2 Decision on Ground No. 2: In ground no. 2, the appellant urged that the AO has erred in making addition of Rs.1,90,40,291 u/s.698 as unexplained money on account of tion of closing stock. 12.2.1 I have carefully considered the facts mentioned by the AO, facts of the appellant submitted alongwith Form No. 35 and the other materials on the record on these issues. The AO has pointed out that during the survey proceedings conducted on the appellant's case, the inventory of the stock taken during the survey action conducted on 31.01.2018 was Rs.6,91,55,437/ and total stock as per the books amounted to Rs.5,01,15,146/ There was a difference of Rs. 1,90,40,291/- Further, a statement of Shri. Luv Arya (partner) during the survey action, he admitted that excess stock amounting to Rs.1,90,40,291/ not recorded as those were lying outstation. 12.2.2. In the above connection, the appellant was showcaused as to why Rs. 1,90,40,291/-should not be treated as unexplained money u/s.698 of the IT Act. In response the appellant submitted that the proceedings are pending in the court Blufab Fashion Fabrics LLP 10 ITA No. 4366 & 4367/MUM/2025 any meaningful and worthwhile submissions/documentations even during the instant appellate proceedings in this case to counter effectively the position adopted by the AO on the concerned issues and reduced in carefully perused the facts of the appellant's case and the order of the Assessing Officer. It is observed from the facts of the case that the appellant has failed to furnish any documentary evidence to the issue raised by them in the appeal with additions made by the AO regarding additions made on account unexplained money and unexplained expenditure Considering the above facts, I decide the appeal on the basis of facts mentioned by AO in the assessment order and 12.1 Decision on Ground No. 1: This ground is genera general in detailed ground raised by the appellant are adjudicated in subsequent paragraphs, therefore, no separate ground is required. Accordingly, the ground 12.2 Decision on Ground No. 2: In ground no. 2, the appellant urged that the AO has erred in making addition of Rs.1,90,40,291 u/s.698 as unexplained money on account of 12.2.1 I have carefully considered the facts mentioned by the AO, facts of the appellant submitted alongwith Form No. 35 and the other materials on the record on these issues. The AO has conducted on the appellant's case, the inventory of the stock taken during the survey action conducted on 31.01.2018 was Rs.6,91,55,437/- and total stock as per the books amounted to Rs.5,01,15,146/-. Further, as per the statement of Shri. Luv Arya (partner) during the survey action, he admitted that excess stock amounting to Rs.1,90,40,291/-were 12.2.2. In the above connection, the appellant was showcaused should not be treated as unexplained money u/s.698 of the IT Act. In response the appellant submitted that the proceedings are pending in the court Printed from counselvise.com of law for taking the custody of all the documents and stock and the matter is sub judice. T kept in abeyance just because the matter is pending before the Hon'ble Courts, until and unless there is such specific directions from the Court. Hence in the absence of source of genuineness of the above transactions Rs.1,90,40,291/ 12.2.3 Further, in the appellate proceedings before me, the appellant even after so many opportunities, neither attended the hearing nor submitted any documents to substantiate his ground, nor offered a shred of evidence to the contrary, to indicate that the above addition was not justified. It is, thus, evident that the appellant has no evidence to substantiate the grounds taken. Hence, considering the totality of above facts, I am of the opin that the AO has rightly made addition of Rs. 1,90,40,291/ u/s.69B of the IT Act. Accordingly, addition of Rs. 1,90,40,291/ made by AO is hereby confirmed. Thus, ground no. 2 of appeal raised by appellant is dismissed. 12.3 Decision on Ground No. 3: I urged that the AO has erred in making addition of Rs.3,82,099/ u/s.69C as unexplained expenditure. 12.3.11 have carefully considered the facts mentioned by the AO, facts of the appellant submitted alongwith Form No. 35 and th other materials on the record on these issues. On perusal of the assessment order, it was seen that the AO has mentioned that during the survey proceedings it was seen that the cash in hand as per book of account was stated as Rs.4,16,399/ actual cash found in the premises was only Rs.34,300/ there was a difference of Rs.3,82,099/ showcaused as to why the shortfall in the cash found should not be treated as unexplained expenditure u/s.69C of the IT Act. In response the appellant did not file any submissions. Hence, in the absence of any evidences the AO treated the sum of Rs.3,82,099/ the total income u/s.69C of the IT Act. 12.3.2 Further, in the appellate proceedings appellant even after so many opportunities, neither attended the hearing nor submitted any documents to substantiate his ground, nor offered a shred of evidence to the contrary, to indicate that the above addition was not justified. It is, appellant has no evidence to substantiate the grounds taken. Hence, considering the totality of above facts, I am of the opinion that the AO has rightly made addition of Rs. 3,82,099/ Blufab Fashion Fabrics LLP ITA No. 4366 & 4367/MUM/2025 of law for taking the custody of all the documents and stock and the matter is sub judice. The AO stated that the matter cannot be kept in abeyance just because the matter is pending before the Hon'ble Courts, until and unless there is such specific directions from the Court. Hence in the absence of source of genuineness of the above transactions the AO made an addition o Rs.1,90,40,291/- u/s.69B of the Act. 12.2.3 Further, in the appellate proceedings before me, the appellant even after so many opportunities, neither attended the hearing nor submitted any documents to substantiate his ground, offered a shred of evidence to the contrary, to indicate that the above addition was not justified. It is, thus, evident that the appellant has no evidence to substantiate the grounds taken. Hence, considering the totality of above facts, I am of the opin that the AO has rightly made addition of Rs. 1,90,40,291/ u/s.69B of the IT Act. Accordingly, addition of Rs. 1,90,40,291/ made by AO is hereby confirmed. Thus, ground no. 2 of appeal raised by appellant is dismissed. 12.3 Decision on Ground No. 3: In ground no. 3, the appellant urged that the AO has erred in making addition of Rs.3,82,099/ u/s.69C as unexplained expenditure. 12.3.11 have carefully considered the facts mentioned by the AO, facts of the appellant submitted alongwith Form No. 35 and th other materials on the record on these issues. On perusal of the assessment order, it was seen that the AO has mentioned that during the survey proceedings it was seen that the cash in hand as per book of account was stated as Rs.4,16,399/- whereas the ctual cash found in the premises was only Rs.34,300/ there was a difference of Rs.3,82,099/-. The appellant was showcaused as to why the shortfall in the cash found should not be treated as unexplained expenditure u/s.69C of the IT Act. In the appellant did not file any submissions. Hence, in the absence of any evidences the AO treated the sum of Rs.3,82,099/- as unexplained expenditure and made addition to the total income u/s.69C of the IT Act. 12.3.2 Further, in the appellate proceedings before me, the appellant even after so many opportunities, neither attended the hearing nor submitted any documents to substantiate his ground, nor offered a shred of evidence to the contrary, to indicate that the above addition was not justified. It is, thus, evident that the appellant has no evidence to substantiate the grounds taken. Hence, considering the totality of above facts, I am of the opinion that the AO has rightly made addition of Rs. 3,82,099/ Blufab Fashion Fabrics LLP 11 ITA No. 4366 & 4367/MUM/2025 of law for taking the custody of all the documents and stock and he AO stated that the matter cannot be kept in abeyance just because the matter is pending before the Hon'ble Courts, until and unless there is such specific directions from the Court. Hence in the absence of source of genuineness of the AO made an addition o 12.2.3 Further, in the appellate proceedings before me, the appellant even after so many opportunities, neither attended the hearing nor submitted any documents to substantiate his ground, offered a shred of evidence to the contrary, to indicate that the above addition was not justified. It is, thus, evident that the appellant has no evidence to substantiate the grounds taken. Hence, considering the totality of above facts, I am of the opinion that the AO has rightly made addition of Rs. 1,90,40,291/- u/s.69B of the IT Act. Accordingly, addition of Rs. 1,90,40,291/- made by AO is hereby confirmed. Thus, ground no. 2 of appeal n ground no. 3, the appellant urged that the AO has erred in making addition of Rs.3,82,099/- 12.3.11 have carefully considered the facts mentioned by the AO, facts of the appellant submitted alongwith Form No. 35 and the other materials on the record on these issues. On perusal of the assessment order, it was seen that the AO has mentioned that during the survey proceedings it was seen that the cash in hand whereas the ctual cash found in the premises was only Rs.34,300/-. Hence . The appellant was showcaused as to why the shortfall in the cash found should not be treated as unexplained expenditure u/s.69C of the IT Act. In the appellant did not file any submissions. Hence, in the absence of any evidences the AO treated the sum of as unexplained expenditure and made addition to before me, the appellant even after so many opportunities, neither attended the hearing nor submitted any documents to substantiate his ground, nor offered a shred of evidence to the contrary, to indicate that thus, evident that the appellant has no evidence to substantiate the grounds taken. Hence, considering the totality of above facts, I am of the opinion that the AO has rightly made addition of Rs. 3,82,099/- u/s. 69C Printed from counselvise.com of the Income tax Act to the total inco unexplained expenditure. Accordingly, addition of Rs. 3,82,099/ made by AO is hereby confirmed. Thus, ground no. 3 of appeal raised by appellant is 5.1 We have noticed that the reasons for non part of the assessee have already been referred in the affidavit filed. In our opinion, the assessee was prevented by way of sufficient reason for not complying before the Ld. CIT(A) of ld CIT(A) is legally permissible where the appellant remains recalcitrant, the judicial conscience of this Tribunal cannot remain unresponsive to the peculiar circumstances emerging from the affidavit and the material placed before us. The affidavit explains, in cogent detail, that due to partner disputes, IBC proce control of records by other partners, the assessee could not access documents or correspondences necessary for compliance. These facts, in our view, constitute a “sufficient cause” within the meaning of section 249(3) of the Act, read with the justice. 5.2. The maxim audi alteram partem unheard—is not an empty ritual but a foundational postulate of fair procedure. When the assessee has shown that its non was occasioned by genuine and de contrary to equity and justice to sustain an order passed without affording a meaningful opportunity of hearing. Blufab Fashion Fabrics LLP ITA No. 4366 & 4367/MUM/2025 of the Income tax Act to the total income on account of unexplained expenditure. Accordingly, addition of Rs. 3,82,099/ made by AO is hereby confirmed. Thus, ground no. 3 of appeal raised by appellant is dismissed.” We have noticed that the reasons for non-compliance on the ssee have already been referred in the affidavit filed. In our opinion, the assessee was prevented by way of sufficient reason for not complying before the Ld. CIT(A). While an approach of ld CIT(A) is legally permissible where the appellant remains recalcitrant, the judicial conscience of this Tribunal cannot remain unresponsive to the peculiar circumstances emerging from the affidavit and the material placed before us. The affidavit explains, in cogent detail, that due to partner disputes, IBC proce control of records by other partners, the assessee could not access documents or correspondences necessary for compliance. These facts, in our view, constitute a “sufficient cause” within the meaning of section 249(3) of the Act, read with the principles of natural audi alteram partem—no one should be condemned is not an empty ritual but a foundational postulate of fair procedure. When the assessee has shown that its non was occasioned by genuine and demonstrable reasons, it would be contrary to equity and justice to sustain an order passed without affording a meaningful opportunity of hearing. Blufab Fashion Fabrics LLP 12 ITA No. 4366 & 4367/MUM/2025 me on account of unexplained expenditure. Accordingly, addition of Rs. 3,82,099/- made by AO is hereby confirmed. Thus, ground no. 3 of appeal compliance on the ssee have already been referred in the affidavit filed. In our opinion, the assessee was prevented by way of sufficient While an approach of ld CIT(A) is legally permissible where the appellant remains recalcitrant, the judicial conscience of this Tribunal cannot remain unresponsive to the peculiar circumstances emerging from the affidavit and the material placed before us. The affidavit explains, in cogent detail, that due to partner disputes, IBC proceedings, and control of records by other partners, the assessee could not access documents or correspondences necessary for compliance. These facts, in our view, constitute a “sufficient cause” within the meaning principles of natural no one should be condemned is not an empty ritual but a foundational postulate of fair procedure. When the assessee has shown that its non-appearance monstrable reasons, it would be contrary to equity and justice to sustain an order passed without Printed from counselvise.com 5.3. In such circumstances, we deem it just and proper to set aside the impugned order of the learned CIT(A) an his file for fresh adjudication in accordance with law, after affording adequate opportunity to the assessee to present its case. 5.4. The assessee is directed to extend full cooperation before the learned CIT(A) and to ensure that sought except for reasonable and bona fide cause. of the appeal of the assessee is accordingly allowed. The remaining grounds are rendered academic and therefore, we are not adjudicated upon at this stage. 6. In the appeal for assessment year 2019 has been pointed out by the Registry. The reasons for the delay, being identical to those discussed for the preceding assessment year, stand duly explained in the same affidavit. Following ou findings and reasoning rendered in para 4 above, the delay for this year is also condoned and the appeal is admitted. 6.1 It is further noticed that the learned CIT(A) has disposed of the appeal ex parte for want of compliance. Having regard to the parit of facts and the reasoning recorded while deciding the appeal for AY 2018–19, we similarly set aside the order of the learned CIT(A) for AY 2019–20 and restore the matter to his file for denovo adjudication after giving due opportunity to the assessee to evidence and arguments in support of its claim. Blufab Fashion Fabrics LLP ITA No. 4366 & 4367/MUM/2025 5.3. In such circumstances, we deem it just and proper to set aside the impugned order of the learned CIT(A) and restore the matter to his file for fresh adjudication in accordance with law, after affording adequate opportunity to the assessee to present its case. 5.4. The assessee is directed to extend full cooperation before the learned CIT(A) and to ensure that no unnecessary adjournments are sought except for reasonable and bona fide cause. The ground No. 2 of the appeal of the assessee is accordingly allowed. The remaining grounds are rendered academic and therefore, we are not adjudicated upon at this stage. In the appeal for assessment year 2019–20, a delay of 32 days has been pointed out by the Registry. The reasons for the delay, being identical to those discussed for the preceding assessment year, stand duly explained in the same affidavit. Following ou findings and reasoning rendered in para 4 above, the delay for this year is also condoned and the appeal is admitted. It is further noticed that the learned CIT(A) has disposed of the appeal ex parte for want of compliance. Having regard to the parit of facts and the reasoning recorded while deciding the appeal for AY 19, we similarly set aside the order of the learned CIT(A) for 20 and restore the matter to his file for denovo adjudication after giving due opportunity to the assessee to evidence and arguments in support of its claim. Blufab Fashion Fabrics LLP 13 ITA No. 4366 & 4367/MUM/2025 5.3. In such circumstances, we deem it just and proper to set aside d restore the matter to his file for fresh adjudication in accordance with law, after affording adequate opportunity to the assessee to present its case. 5.4. The assessee is directed to extend full cooperation before the no unnecessary adjournments are The ground No. 2 of the appeal of the assessee is accordingly allowed. The remaining grounds are rendered academic and therefore, we are not 20, a delay of 32 days has been pointed out by the Registry. The reasons for the delay, being identical to those discussed for the preceding assessment year, stand duly explained in the same affidavit. Following our findings and reasoning rendered in para 4 above, the delay for this It is further noticed that the learned CIT(A) has disposed of the appeal ex parte for want of compliance. Having regard to the parity of facts and the reasoning recorded while deciding the appeal for AY 19, we similarly set aside the order of the learned CIT(A) for 20 and restore the matter to his file for denovo adjudication after giving due opportunity to the assessee to submit Printed from counselvise.com 6.2. The assessee is again directed to respond to all notices issued by the first appellate authority with diligence and to refrain from seeking adjournments save in exceptional circumstances duly substantiated. The ground No. 3 of the appeal for assessment year 2019-2020 is accordingly allowed and the remaining grounds are rendered academic, therefore, we are not adjudicating upon at this stage. 7. In the result, both appeals are allowed for statisti The delay in filing the appeals stands condoned. The impugned orders of the learned CIT(A) for assessment years 2018 2019–20 are set aside, and the matters are restored to his file for fresh adjudication in accordance with law after af opportunity of hearing to the assessee. Order pronounced in the open Court on Sd/- (NARENDER KUMAR CHOUDHRY JUDICIAL MEMBER Mumbai; Dated: 14/10/2025 Rahul Sharma, Sr. P.S. Blufab Fashion Fabrics LLP ITA No. 4366 & 4367/MUM/2025 6.2. The assessee is again directed to respond to all notices issued by the first appellate authority with diligence and to refrain from seeking adjournments save in exceptional circumstances duly The ground No. 3 of the appeal for assessment year 2020 is accordingly allowed and the remaining grounds are rendered academic, therefore, we are not adjudicating upon at this In the result, both appeals are allowed for statisti The delay in filing the appeals stands condoned. The impugned orders of the learned CIT(A) for assessment years 2018 20 are set aside, and the matters are restored to his file for fresh adjudication in accordance with law after affording adequate opportunity of hearing to the assessee. ounced in the open Court on 14/10/2025. - Sd/ (NARENDER KUMAR CHOUDHRY) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Blufab Fashion Fabrics LLP 14 ITA No. 4366 & 4367/MUM/2025 6.2. The assessee is again directed to respond to all notices issued by the first appellate authority with diligence and to refrain from seeking adjournments save in exceptional circumstances duly The ground No. 3 of the appeal for assessment year 2020 is accordingly allowed and the remaining grounds are rendered academic, therefore, we are not adjudicating upon at this In the result, both appeals are allowed for statistical purposes. The delay in filing the appeals stands condoned. The impugned orders of the learned CIT(A) for assessment years 2018–19 and 20 are set aside, and the matters are restored to his file for fording adequate /10/2025. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER Printed from counselvise.com Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// Blufab Fashion Fabrics LLP ITA No. 4366 & 4367/MUM/2025 Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Blufab Fashion Fabrics LLP 15 ITA No. 4366 & 4367/MUM/2025 BY ORDER, (Assistant Registrar) ITAT, Mumbai Printed from counselvise.com "