The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) has held that the data retrieved from the pen drive seized during the search cannot be a sole basis for re-assessment under section 147/148 of the Income Tax Act, 1961 in the absence of certificate required under section 65B (4) of The Indian Evidence Act, 1872.
As per the provision, under Section 65B(1), any information contained in an electronic record, which has been stored, recorded, or copied as computer output, shall also be deemed as a ‘document’ and shall be admissible as evidence without further proof or production of the originals, if the conditions mentioned are satisfied.
The department initiated re-assessment proceedings against the assessee, Shri Anand Jaikumar Jain on the basis of the incriminating document found from the premises of Dalmia Group as the same revealed unaccounted cash transactions between Dalmia Group and Jain Group of which the assessee is the main person.
The assessee contended that the material relied on by the Assessing officer was the information contained on a pen drive and the Dalmia Group have disown the seized data while filing the application before Settlement Commission and therefore, the order need to be quashed. It was contended that the pen drive (an electronic record), being relied upon by the department, is not admissible as evidence as certificate u/s 65B (4) has not been produced.
Shri Amarjit Singh, Judicial Member, and Shri S. Rifaur Rahman, Accountant Member have observed that the AO has not conducted any independent inquiry or made any efforts to corroborate the seized pages or link them to the assessee.
“The entire assessment has been made without bringing on record any evidence but merely relying on statements made by persons from Dalmia Group and AO’s perceptions/presumptions,” the Tribunal said.
With regard to the admissibility of digital evidence, the Tribunal relied on theSupreme Court decision wherein it was held that certificate under Section 65B (4) of The Indian Evidence Act, 1872 is a condition precedent to the admissibility of evidence by way of electronic record as S. 65B (4) of The Indian Evidence Act, 1872 is mandatory.
Dismissing the department’s appeal, the Tribunal held that “This action of the AO is completely improper, more particularly so when Dalmia Group have disputed the contents of the pen-drive. Further reliance is placed upon the decision of the Mumbai Bench of the Tribunal in the case of Simtools P. Ltd. v. DOT in ITA No. 1574/Mum/2020 dated 09.02.2022 wherein following the above-referred decision of the Supreme Court, it was held that the electronic data cannot be relied upon in the absence of a requisite certificate.”
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
