The Rajasthan High Court has upheld the validity of search assessment proceedings under section 153C of the Income Tax Act based on WhatsApp chats.
The bench of Justice Pushpendra Singh Bhati and Justice Chandra Prakash Shrimali has observed that the big size plots were purchased by the petitioner. The unaccounted money paid are reflected in the chats. The purchase of the plots was also found from the extracted digital data. The on-money etc. are reflected in the WhatsApp chats and images. The unaccounted cash transactions were found as reflected in the pictures.
The bench observed that the incriminating chats between the parties in question regarding the unaccounted cash component was clearly reflected. The WhatsApp Chats reflected the details of cash amounting to Rs.48,00,000/- on 08.02.2019. The unaccounted cash of about Rs.52,00,000. The cash transactions are also reflected in the satisfaction note.
The petitioner filed his usual returns declaring an income of Rs.41,89,700 for the Assessment Year 2019-20 and was not having any kind of dissatisfaction on the part of the respondent regarding the same. Subsequently, while a search and seizure action was conducted upon one Om Kothari Group on 13.07.2020 by the Investigation Directorate, Jaipur, Rajasthan, the petitioner was served upon the impugned notice dated 16.06.2023 under Section 153C of the Act of 1961, whereby the petitioner was required to file the return of income. In pursuance of the same, the petitioner again filed a return on 03.07.2023.
The petitioner, in the meanwhile, also sought a satisfaction note of the respondent, which would have been the basis of issuance of the impugned notice, and the said satisfaction note was sought for, by filing an application dated 19.12.2024. The satisfaction note was provided by the respondent, reflecting that it was a fit case where the proceedings under Section 153C of the Income Tax Act, 1961 were to be initiated against the present petitioner.
The satisfaction note indicated that during the course of search proceedings, it came to the notice that there were certain WhatsApp chats between the Directors and Associates of the Om Kothari Group, vide which an inference was drawn that certain plots have been purchased by the petitioner from Om Metal Infotech Private Limited (a group concern of Om Kothari Group), and towards such purchase, the petitioner paid money in cash, which were not recorded in the books of account. Except for such WhatsApp chats, no other incriminating document was found against the petitioner, when the search and seizure in question took place.
The petitioner contended that Section 153C has a mandatory condition of the dereliction arising out of the books of account or the documents or assets seized, and cannot be on the basis of WhatsApp chats. The WhatsApp chats did not even indicate the petitioner’s name or telephone number and only indicated a surname which is very common in the State of Rajasthan.
The petitioner contended that the whole jurisprudence of Section 153C of the Act of 1961 requires strict compliance, and unless there was such an adherence, the notice under Section 153C and the consequential performance note cannot be sustained in the eyes of law.
The court while dismissing the petition held that the satisfaction note is having satisfactory details for initiation of the proceedings under Section 153C of Income Tax Act, 1961.
Case Details
Case Title: Giriraj Pugalia Versus Assistant Commissioner Of Income Tax
Case No.: D.B. Civil Writ Petition No. 3152/2025
Date: 04/03/2025
Counsel For Petitioner: Aditya Vijay
Counsel For Respondent: K.K. Bissa
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