PRATHIMA INFRASTRUCTURE LIMITED,HYDERABAD vs. DCIT., CENTRAL CIRCLE-2(4), HYDERABAD

Facts

A search and seizure operation was conducted on the assessee, Prathima Infrastructure Limited, based on a joint warrant. Incriminating material, including cash sheets and emails, was found. The assessee argued that the assessment order was time-barred as the search concluded on February 12, 2020, while the Revenue contended that the search concluded on July 23, 2020, with the revocation of a prohibitory order, making the assessment within the prescribed limit. Additions were made based on the seized material concerning alleged unexplained cash transactions.

Held

The Tribunal held that the conclusion of the search, for the purpose of computing the limitation period under Section 153B, is determined by the date of the last panchnama drawn in relation to any person covered by the joint warrant. The Tribunal noted that while the assessee claimed the search concluded on February 12, 2020, the Revenue presented evidence of a later conclusion on July 23, 2020, after the revocation of a prohibitory order. The Tribunal found that the assessment order was passed within the extended time limit considering the provisions of Section 153B and the impact of COVID-19 related extensions. Regarding the additions, the Tribunal observed that the assessee failed to provide satisfactory explanations for the cash transactions and directed the Assessing Officer to identify overlapping entries.

Key Issues

1. Whether the assessment order is barred by limitation under Section 153B. 2. Validity of additions made on the basis of electronic evidence and photocopied documents without proper corroboration.