Bijoy Das – [2026] 186 taxmann.com 522 (Article)
ITAT Delhi—ITA Nos. 3214 & 3215/DEL/2025—May 7, 2026—JM Satbeer Singh Godara—Section 69A, Section 65B, CBDT Digital Evidence Manual, and the Income-Tax Act 2025’s New Electronic Evidence Powers
1. The Problem – A Screenshot, a Suspicion, and a Crore-Sized Addition
On 7 May 2026, the Delhi Bench of the Income Tax Appellate Tribunal (‘ITAT’), in ITA Nos. 3214 and 3215/DEL/2025, deleted an addition of Rs. 89.50 lakh made under Section 69A of the Income-tax Act, 1961 (‘the 1961 Act’) against an assessee who had received gifts from his Dubai-based father-in-law. The Assessing Officer (‘AO’) had treated the gifts as unexplained money—invoking Section 69A on the ground that the source and genuineness of the gifts could not be established. The primary basis for the AO’s suspicion was a set of WhatsApp messages found on a mobile phone during search proceedings. The ITAT, per Judicial Member Satbeer Singh Godara, held that mere WhatsApp chats, suspicion, and presumptions cannot justify invoking Section 69A without corroborative evidence. The addition was deleted in full.
The ruling is part of a clear and growing ITAT jurisprudence—from Mumbai to Delhi to Surat—establishing that digital messages alone, without independent corroboration, are insufficient to sustain additions under Section 69A or related provisions. What makes the Delhi ITAT’s May 2026 ruling particularly significant is its timing – it arrives precisely as the Income-tax Act, 2025 (‘the 2025 Act’) has, for the first time, expressly armed tax authorities with statutory power to access WhatsApp chats, social media, and emails as evidence during search and survey operations (Section 247 of the 2025 Act, effective 1 April 2026). The ruling thus sets the standard for what authorities must do with such digital evidence once they have it—not merely how to obtain it.
This article analyses the May 2026 ITAT Delhi ruling, traces the complete judicial evolution on digital evidence in Indian tax proceedings, maps the six-condition test for a legally sustainable digital evidence-based addition, and examines how the 2025 Act’s new framework changes the evidentiary landscape from Assessment Year 2026-27 onwards.
2. Statutory Architecture—Section 69A, Section 65B, and the 2025 Act
2.1 Section 69A—Unexplained Money – The Charging Provision
Section 69A of the 1961 Act (corresponding to Section 118 of the 2025 Act) provides:
‘Where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article, or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the money and the value of bullion, jewellery or other valuable article may be deemed to be the income of the assessee for such financial year.’
Three elements must be established before Section 69A can be invoked:
(i) the assessee is found to be the ‘owner’ of the money or valuable article;
(ii) it is not recorded in the books; and
(iii) the assessee cannot explain the source. The first element—ownership—is the gateway.
A WhatsApp message that mentions a sum of money does not establish that the assessee owns that money. The message is hearsay evidence of a transaction; it is not the transaction itself. The ITAT has consistently held—and the Delhi May 2026 ruling reaffirms—that the foundational requirement of ‘ownership’ cannot be inferred from digital messages without corroborating evidence of actual receipt.
2.2 Section 65B of the Indian Evidence Act—Electronic Evidence Admissibility
Section 65B of the Indian Evidence Act, 1872 (now Section 63 of the Bharatiya Sakshya Adhiniyam, 2023, ‘BSA’) provides that a computer-generated document is admissible as evidence of any fact stated therein, subject to specified conditions—including the requirement that a certificate be provided by a person responsible for the operation of the computer, certifying that the output was produced in the normal course of activities and that the computer was in good working condition. The Supreme Court in Anvar P.V. v. P.K. Basheer [2014] SCC Online SC 732/(2014) 10 SCC 473 held that this certification is mandatory for electronic evidence in court proceedings.
The Madras High Court in ACIT v. Vetrivel Minerals (VV Minerals) [2025] 174 taxmann.com 110 (Madras) held that Section 65B of the Evidence Act does not strictly apply to income-tax assessment proceedings, which are quasi-judicial and not ‘court’ proceedings within Section 1 of the Evidence Act. However—and this is the critical caveat—the Court simultaneously held that the absence of formal Section 65B certification does not mean that electronic evidence can be used without any authentication. The conditions of extraction, the method used, and the identity of the device from which the evidence was taken must all be established. Unauthenticated, uncertified electronic evidence extracted without documented provenance carries very little evidentiary weight.
2.3 Section 247 of the Income-Tax Act, 2025—The New Digital Evidence Power
The Income-tax Act, 2025, effective from 1 April 2026, contains a significant addition to the search powers in Section 247 (corresponding to and expanding Section 132 of the 1961 Act). For the first time in Indian direct tax legislation, Section 247 of the 2025 Act expressly empowers authorised officers to access ‘information stored in electronic form, including in email, social media accounts, cloud-based platforms, instant messaging applications and similar digital repositories.’ This provision statutorily legitimises the use of WhatsApp chats, Instagram messages, and similar digital communications as sources of evidence in tax searches from AY 2026-27 onwards.
Critically, however, Section 247 confers the power to access—not the right to presume. The evidence obtained through this power must still satisfy the standard of corroboration, confrontation, and authenticity that the ITAT jurisprudence—and the Supreme Court’s electronic evidence doctrine—requires. The May 2026 ITAT Delhi ruling provides the benchmark – accessing a WhatsApp message during a search is the beginning of an evidentiary process, not its conclusion.
3. The Facts—The Dubai Father-in-Law and the Screenshot
The assessee in ITA Nos. 3214 and 3215/DEL/2025 was a salaried individual whose residential premises were searched under Section 132 of the 1961 Act. During the search, the officer found a mobile phone belonging to the assessee. On examination of the phone, a WhatsApp conversation was found between the assessee and his father-in-law, who was resident in Dubai. The conversation appeared to reference transfers of money from Dubai to India. On the basis of these messages alone, the AO made an addition of Rs. 89.50 lakh under Section 69A, treating the amount as unexplained money received by the assessee from his father-in-law.
The AO’s order did not:
(a) record whether the WhatsApp messages were sent by the assessee or received by him;
(b) confront the assessee with the specific messages and record his response;
(c) verify the Dubai father-in-law’s financial capacity to make such transfers;
(d) obtain bank account records corroborating any transfer of money;
(e) extract or produce bank statements of the assessee showing receipt of funds; or
(f) obtain a statement from the father-in-law or make any enquiry through the competent authority in the UAE.
The CIT(A) upheld the addition. The ITAT, in the May 2026 ruling, deleted it.
Click Here To Read The Full Article
The post [Opinion] WhatsApp Chats Alone Cannot Justify Section 69A Additions appeared first on Taxmann Blog.
