The Pune Bench of Income Tax Appellate Tribunal upheld the addition against the assessee while addressing the issue of evidentiary value of pen drive in absence of certificate under section 65B(4) of Indian Evidence Act.
The bench of Rama Kanta Panda (Vice President) and Astha Chandra (Judicial Member) has observed that there was a certificate drawn under section 65B(4) of the Indian Evidence Act for the pen-drive seized from the cabin of Shri Shrikant S. Dalvi which was relied upon by the Assessing Officer while making the impugned addition and since such a copy of the certificate was provided to the assessee for its comments and the assessee could not make any counter-comments to the certificate so issued by the Assessing Officer under section 65B(4) of the Indian Evidence Act, therefore, in absence of any contrary material, the CIT(A) was justified in upholding addition.
The assessee is a Public Limited Company and provides solutions in aquaculture cage nets, fishing nets, sports nets, safety nets, agricultural nets, coated fabrics, polymer ropes and geo-synthetics etc.
During the course of search action in the case of the assessee at its head office, a pen drive was found from the cabin of the Head-Cashier Shri Shrikant S Dalvi.
In the pen drive, various data including excel sheets were found wherein certain unaccounted transactions in the form of cash receipts and cash payments were mentioned.
The print outs of these excel sheets found in the computer and the pen drive of Shri S.S. Dalvi were taken and subsequently seized.
The Assessing Officer further observed that Shri Shrikant S Dalvi, on being confronted by the authorized officer during the course of the search, had in his statement recorded had accepted that the sales appearing in bundle contain the year-wise summary of sales made in cash by GTFL and payments made in cash by GTFL.
Shrikant S Dalvi further stated that these cash receipts are on account of sale of scrap materials and the payments made in cash are on account of GEO Project BD [Business Development] payments, sales incentive payments, miscellaneous payments for official work and the same are unaccounted.
The assessee contended that there was neither any seizure of cash nor any unaccounted cash found at the office or factory premises of the assessee company or with Mr. Dalvi. Other than the excel sheets working as contained in the pen drive, no other documents such as invoices, bills, vouchers, etc. were found/seized which supported the excel sheets. There is no corroborative evidence found to support the excel sheets having some figures alleged to be cash receipts and payments. Therefore, there is no “relatable” material or information having any direct relation or nexus with the excel sheets.
The assessee took a ground that the entire case has been built-up by the Assessing Officer on the basis of data retrieved from the pen drive in the form of print-outs of excel sheets and subsequent statement of Shri Shrikant S. Dalvi.
Therefore, the authenticity of such data and admissibility of electronic evidence is very much essential to substantiate the allegations of unaccounted cash receipts and cash payments against the assessee. The contents of the pen drive being electronic evidence have to be certified in terms of section 65B of the Indian Evidence Act. However, the Assessing Officer, before relying upon such electronic evidence, has not brought the mandatory certificate u/s.65B(4) of Indian Evidence Act, on record.
Before relying upon evidence, a certificate under section 65B(4) is a condition precedent to the admissibility of evidence by way of electronic record. Since the Assessing Officer has not obtained such certificate, it was argued that the entire addition made by the Assessing Officer should be deleted.
The assessee contended that no certificate under section 65B(4) of the Indian Evidence Act was drawn at the time of search and, therefore, the said data does not have any evidentiary value. No addition can be made on the basis of data found from electronic devices in absence of certificate under section 65B(4) of the Indian Evidence Act.
The department contended that the CIT(A) had asked the Assessing Officer to forward the copy of the certificate drawn under section 65B(4) of the Indian Evidence Act for the pen-drive seized from the cabin of Shri Shrikant S Dalvi which had been relied upon while making the additions. In response to the same, the Assessing Officer forwarded a copy of the certificate which was forwarded to the assessee for its comments. However, the assessee could not give any comment on the certificate.
The tribunal dismissed the assessee’s appeal.
Case Details
Case Title: Garware Technical Fibres Limited Versus DCIT
Case No.: I.T.A.Nos.1696 to 1703/PUN./2024
Date: 09.01.2025
Counsel For Appellant: CA Ritu Kamal Kishore
Counsel For Respondent: Amol Khairnar
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