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TMI Blog2025 (4) TMI 672X X X X Extracts X X X X X X X X Extracts X X X X ..... sed. We now take up the appeal in ITA No. 524/VIZ/2024 for the A.Y.2014-15 as a lead appeal. ITA No. 524/VIZ/2024 (A.Y. 2014-15) 3. This appeal is filed by the assessee against order of Ld. CIT(A) vide DIN & Order No. ITBA/APL/S/250/2024-25/1069966844(1) dated 26.10.2024 for the A.Y.2014-15 arising out of order passed under section 153C r.w.s. 143(3) of the Income Tax Act, 1961 (in short „Act‟) dated 31.03.2022. 4. Brief facts of the case are that, assessee is an individual engaged in the business of development of educational facilities. Assessee is the Managing Trustee of Social Educational Society, which is running an Engineering College in the name and style of Vasireddy Venkatadri Institute of Technology (VVIT) and a School in the name and style of VIVA. Assessee filed his return of income for the A.Y.2014-15 admitting a total income of Rs. 6,92,130/-. A search and seizure operation was conducted in the case of M/s. Polisetty Somasundaram Group of cases on 28.01.2020. During the course of search and seizure proceedings conducted in the business premises of M/s. Polisetty Somasundaram Group on 28.01.2020, a pen drive was found which was seized vide annexure A/PS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pose of assessment in view of the legal infirmity in the certificate obtained under section 65B of the Indian Evidence Act. Ld. CIT(A) dismissed the legal ground raised by the assessee and also sustained the addition made by the Ld. AO, therefore dismissed the appeal of the assessee. 6. Aggrieved by the order of the Ld. CIT(A), assessee is in appeal before us by raising the following grounds in its appeal: - "1. The Learned CIT(Appeals) erred in both law and facts. 2. On the facts and circumstances of the case, the Learned Commissioner of Income Tax (Appeals) is not justified in confirming the addition made of Rs.11,17,507/-on account of alleged payment of interest on the loan. 3. On the facts and circumstances of the case, the Learned CIT(A) ought to have appreciated that the Assessment is made without proper satisfaction note drawn by the Assessing Officer. Further the Learned CIT(A) also ought to have observed that the Assessing Officer failed to prove the nexus between the incriminating material and the addition made/sustained. 4. On the facts and circumstances of the case the Learned CIT(A) ought to have appreciated that the receipts were found and seized in the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of Rs.11,17,507/- based on the digital evidence obtained in the form of pendrive Vide Annexure A/PSS/CORP/18. The Revenue has not brought any cogent evidence corroborating the Incriminating documents to support the payment of interest in cash by the assessee. Further, the Tribunal in ITA No. No. 172 to 180/VIZ/2020-23 dated 18.08.2023 has held as follows: "37. With respect to Ground No.5, regarding the violation of section 65B of the Indian Evidence Act, the Ld. AR submitted that the primary evidence from wherein the data was copied on the Pen Drive was not identified. The Ld. AR referred to the Digital Evidence Investigation Manual issued by the CBDT which clearly indicates the procedure for obtaining the Certificate U/s. 65B of the Indian Evidence Act. The Ld. AR further submitted that the Certificate obtained U/s. 65B of the Act is not in accordance with the procedures laid down in section 65B(2) of the Indian Evidence Act. The Ld. AR also submitted that the four conditions prescribed in sub-section (2) of section 65B of the Indian Evidence Act should be followed cumulatively while obtaining the Certificate U/s. 65B of the Indian Evidence Act. The Ld. AR vehemently argued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. By way of the THE SECOND SCHEDULE to the Information Technology Act Amendments to the Indian Evidence Act have been brought in so as to, incorporate reference to Electronic Records along with the document giving recognition to the electronic records as evidence. Further, special provisions as to evidence relating to electronic record have been inserted in the Indian Evidence Act, 1872 in the form of section 65A & 65B, after section 65. These provisions are very important. They govern the integrity of the electronic record as evidence, as well as, the process for creating electronic record. Importantly, they impart faithful output of computer the same evidentiary value as original without further proof or production of original. Accordingly, while handling any digital evidence, the procedure has to be in consonance of these provisions." 40. Further, we find that section 65B(2) of the Indian Evidence Act clearly specifies the following conditions with respect to obtaining of Digital Evidence both for primary and secondary evidences. The relevant extract of section 65B(2), (3) and (4) are as follows: "(2) The conditions referred to in sub-section (1) in respect of a com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the electronic record was produced by a computer; (c) dealing with any of the matters to which the conditions mentioned in subsection (2) relate, and purporting to be signed by a person occupying a responsible official position in relation to the operation of the relevant device or the management of the relevant activities (whichever is appropriate) shall be evidence of any matter stated in the certificate; and for the purposes of this subsection it shall be sufficient for a matter to be stated to the best of the knowledge and belief of the person stating it." 41. We find from the written submissions of the Ld. AR that the provisions of section 65B(2)(d) as extracted above was not followed by the Revenue. The Revenue failed to identify the primary system giving particulars of the device involved in the production of the data was produced by a computer. 42 Further, we have also considered the cases referred to by the Ld. AR. In the case of Vetrivel Mineral vs. ACIT, Central Circle-2, Madurai reported in [2021] 129 taxmann.com 126 (Mad.)the Hon'ble Madras High Court has observed as under: "24. As contended by the writ petitioners, when the entire assessment has been fram ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red to give a statement in any proceedings pertaining to an electronic record, it is permissible provided the following conditions are satisfied: (a) There must be a certificate which identifies the electronic record containing the statement; (b) The certificate must describe the manner in which the electronic record was produced; (c) The certificate must furnish the particulars of the device involved in the production of that record; (d) The certificate must deal with the applicable conditions mentioned under section 65B(2) of the Evidence Act; and (e) The certificate must be signed by a person occupying a responsible official position in relation to the operation of the relevant device. 16. It is further clarified that the person need only to state in the certificate that the same is to the best of his knowledge and belief. Most importantly, such a certificate must accompany the electronic record like computer printout, Compact Disc (CD), Video Compact Disc (VCD), pen drive, etc., pertaining to which a statement is sought to be given in evidence, when the same is produced in evidence. All these safeguards are taken to ensure the source and authenticity, which ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nditions mentioned in the Section, the "deemed document" now becomes admissible in evidence without further proof or production of the original as evidence of any contents of the original, or of any fact stated therein of which direct evidence would be admissible. 31. The non-obstante clause in sub-section (1) makes itclear that when it comes to information contained in anelectronic record, admissibility and proof thereof mustfollow the drill of Section 65B, which is a specialprovision in this behalf - Sections 62 to 65 being irrelevant for this purpose. However, Section 65B(1) clearlydifferentiates between the "original" document - whichwould be the original "electronic record" contained inthe "computer" in which the original information is firststored - and the computer output containing suchinformation, which then may be treated as evidence ofthe contents of the "original" document. All thisnecessarily shows that Section 65B differentiatesbetween the original information contained in the"computer" itself and copies made therefrom - theformer being primary evidence, and the latter beingsecondary evidence. 32. Quite obviously, the requisite certificate in sub-section (4) is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as well as on perusal of the facts and circumstances of the case, we are of the considered we that the four conditions stipulated in section 65B(2) ie., (a) to (d) along with section 65B(4) were not followed while obtaining the Certificate U/s. 65B of the Indian Evidence Act 1872 in the case of the assessee which are to be followed mandatorily. Therefore, we have no hesitation to hold that this Certificate is not a valid Certificate as prescribed under the Indian Evidence Act 1872 and hence cannot be enforced. Therefore, the Certificate obtained in the case of the assessee cannot be regarded as a legally valid certificate U/s. 65B of the Indian Evidence Act and the same has no recognition in the eyes of law. The information contained in the seized pendrive is could not be considered as admissible evidence as per the provisions of section 65B of Indian Evidence Act. Therefore, we are of the considered view that such inadmissible seized material is not sustainable in the eyes of law. Thus, the assessment order passed in the case of the assessee on 31/3/2022 is not a valid assessment order in the eyes of law and it deserves to be set aside." 10. It can be observed that the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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