The Income Tax Appellate Tribunal (ITAT) has quashed proceedings initiated under Section 153C of the Income-tax Act and deleted a Rs 32.14 crore addition treated as unexplained income in a case linked to Maharashtra Deputy Chief Minister Ajit Pawar, holding that the evidence relied upon by the tax department was insufficient and legally unsustainable.
The relief came in a ruling where Sunetra Ajit Pawar, acting in her capacity as the legal heir of her late husband, was brought on record during the pendency of the appeal following his death in a plane crash.
The tribunal observed that the jurisdictional conditions required to invoke Section 153C—where proceedings are initiated against a person based on material seized during a search on another entity—had not been satisfied in the case. It held that the addition could not stand in the absence of a clear and credible link between the seized material and the assessee.
The case stemmed from a July 2020 search on the Triton Group, during which tax authorities recovered handwritten diaries and digital material. Based on entries found in the documents, the department treated Rs 32.14 crore as unexplained income in financial year 2019-20, alleging it was received by Ajit Pawar and subjecting it to a tax rate exceeding 70%.
According to the tax department, the seized diaries contained references to cash transactions against the initials “DD”, which it claimed referred to Ajit Pawar. The inference was drawn using a combination of WhatsApp chats, SMS records, mobile contact details and other digital material.
The department argued that a phone number stored as “DD Personal” in an associate’s device appeared on the Truecaller app as “Ajit Pawar Baramati”, while additional chats referenced “Dada”, a nickname commonly associated with him. It contended that these elements formed a corroborative chain linking him to the entries.
However, counsel representing Sunetra Ajit Pawar disputed the applicability of Section 153C itself, arguing that the seized material neither belonged to nor directly related to Ajit Pawar. It was further submitted that he was neither the author nor custodian of the diaries, and his name did not appear in the documents. The defence maintained that the reference to “DD” was speculative and lacked legal validity.
The ITAT bench, comprising judicial member Amit Shukla and accountant member Makarand Vasant Mahadeokar, upheld the order of the Commissioner (Appeals) and rejected the department’s reliance on indirect digital indicators. It specifically noted that the diaries, recovered from Jiten Pujari of the Triton Group, did not identify Ajit Pawar as “DD”, and that the author had described such abbreviations as generic markers for high-value transactions.
The tribunal held that in the absence of a “primary evidentiary link” between the seized material and the taxpayer, the assessment could not be sustained. It further observed that WhatsApp messages and other electronic records did not explicitly refer to the diary entries under dispute.
It also dismissed reliance on Truecaller data and indirect digital traces as insufficient, noting that such information, without proper authentication and corroboration, could not form the sole basis for tax additions.
Concluding that the tax officer’s satisfaction was not supported by legally admissible evidence establishing a clear nexus between the seized material and the assessee, the ITAT set aside the addition and quashed the proceedings under Section 153C.
(With inputs from TOI)
The relief came in a ruling where Sunetra Ajit Pawar, acting in her capacity as the legal heir of her late husband, was brought on record during the pendency of the appeal following his death in a plane crash.
The tribunal observed that the jurisdictional conditions required to invoke Section 153C—where proceedings are initiated against a person based on material seized during a search on another entity—had not been satisfied in the case. It held that the addition could not stand in the absence of a clear and credible link between the seized material and the assessee.
The case stemmed from a July 2020 search on the Triton Group, during which tax authorities recovered handwritten diaries and digital material. Based on entries found in the documents, the department treated Rs 32.14 crore as unexplained income in financial year 2019-20, alleging it was received by Ajit Pawar and subjecting it to a tax rate exceeding 70%.
According to the tax department, the seized diaries contained references to cash transactions against the initials “DD”, which it claimed referred to Ajit Pawar. The inference was drawn using a combination of WhatsApp chats, SMS records, mobile contact details and other digital material.
The department argued that a phone number stored as “DD Personal” in an associate’s device appeared on the Truecaller app as “Ajit Pawar Baramati”, while additional chats referenced “Dada”, a nickname commonly associated with him. It contended that these elements formed a corroborative chain linking him to the entries.
However, counsel representing Sunetra Ajit Pawar disputed the applicability of Section 153C itself, arguing that the seized material neither belonged to nor directly related to Ajit Pawar. It was further submitted that he was neither the author nor custodian of the diaries, and his name did not appear in the documents. The defence maintained that the reference to “DD” was speculative and lacked legal validity.
The ITAT bench, comprising judicial member Amit Shukla and accountant member Makarand Vasant Mahadeokar, upheld the order of the Commissioner (Appeals) and rejected the department’s reliance on indirect digital indicators. It specifically noted that the diaries, recovered from Jiten Pujari of the Triton Group, did not identify Ajit Pawar as “DD”, and that the author had described such abbreviations as generic markers for high-value transactions.
The tribunal held that in the absence of a “primary evidentiary link” between the seized material and the taxpayer, the assessment could not be sustained. It further observed that WhatsApp messages and other electronic records did not explicitly refer to the diary entries under dispute.
It also dismissed reliance on Truecaller data and indirect digital traces as insufficient, noting that such information, without proper authentication and corroboration, could not form the sole basis for tax additions.
Concluding that the tax officer’s satisfaction was not supported by legally admissible evidence establishing a clear nexus between the seized material and the assessee, the ITAT set aside the addition and quashed the proceedings under Section 153C.
(With inputs from TOI)
