No Additions Without Valid 65B Certificate | ITAT

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Section 65B electronic evidence

Case Details: Deputy Commissioner of Income-tax vs. Balar Marketing (P.) Ltd. - [2026] 184 taxmann.com 480 (Delhi-Trib.)

Judiciary and Counsel Details

  • Anubhav Sharma, Judicial Member & Manish Aggarwal, Accountant Member
  • Rajiv Khandelwal, CA, Jaind Kumar Jaiswal & Gagan R. Khandelwal, Advs. for the Appellant.
  • Jitender Singh, CIT-DR for the Respondent.

Facts of the Case

The assessee was a private limited company. A search was conducted at the premises of the assessee company’s administrative head. As a result of the search, two mobile phones were seized. Analysis of digital data extracted from these phones revealed WhatsApp/SMS chats and certain images of one software.

Assessing Officer (AO) examined said images and chats, which allegedly reflected the exchange of cash tokens through a hawala network, and concluded that the assessee had effected cash sales to various parties. He made additions over the years based on such electronic data and statements. The matter reached before the Delhi Tribunal.

ITAT Held

The Delhi Tribunal held that the incriminating material relied upon by the Assessing Officer was not primary evidence, as the original software was neither found nor retrieved from any device. The material consisted solely of images allegedly shared for transaction acknowledgement. Further, WhatsApp chats contained only numerical figures, allegedly treated as coded entries, without independent narration of transactions.

The copy of the 65B certificate, purportedly issued by the administrative head, was merely a certificate of expertise regarding the due process adopted. At the same time, the data was backed up from the impugned devices to devices that were cloned. However, subsequently, as to how data was retrieved, and relevant incriminating evidence was extracted from devices by whom, had not been certified.

Since images on mobile devices constitute secondary evidence, any reliance on them necessitates strict adherence to the Board’s instructions for establishing authenticity. In the present case, the absence of a proper extraction report, a valid certificate under section 65B, and an adequately documented chain of custody rendered the electronic evidence inadmissible. Accordingly, additions made solely based on such unauthenticated material could not be sustained.

List of Cases Reviewed

List of Cases Referred to

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied