Seized From Someone Else, Certified by Nobody

A man bought a flat. The department searched the builder, not him. Out of that search came a document and some statements, and out of those came an addition against the buyer under section 69A, taxed at the rate in section 115BBE.

He never saw the document authenticated. He never got to question the people whose statements described him.

On 30 September 2026, in Avinash Arora v. ITO, ITA No. 221/Agr/2026 for AY 2020-21, ITAT Agra set the matter aside on both counts.

The first limb: a file is not a document until someone certifies it

The seized material included an electronic document. It was relied on without the certificate the law requires for electronic records, which the Tribunal recorded as an irregularity.

This is not a technicality invented for tax cases. A printout, an image, an Excel file taken off a hard disk is secondary evidence of what is on that disk. The certificate is what connects the copy in the file to the device it came from: who operated it, that it was working, that the copy is faithful. Without it nobody has established that the document is what it is said to be.

In Arjun Panditrao Khotkar v. Kailash Kushanrao Gorantyal, (2020) 7 SCC 1, the Supreme Court settled that the certificate is a mandatory pre-requisite to admissibility where the original device is not produced.

And the requirement has got harder, not easier

Worth knowing, because the order speaks of section 65B of the Indian Evidence Act and that Act is no longer in force.

From 1 July 2024, section 65B of the Evidence Act 1872 has been replaced by section 63 of the Bharatiya Sakshya Adhiniyam, 2023. The certificate survives, and it now asks for more:

• it must be signed by the person in charge of the device and by an expert, not one responsible official alone;
• it must state the hash value of the record;
• it must follow the format prescribed in the Schedule to the Act.

So for anything seized and relied on from here, the question is not only whether a certificate exists but whether it carries two signatures and a hash. That is a materially harder document for a department to produce after the event, and it is worth asking for by name.

The second limb: statements you cannot test

The addition also rested on statements by the developer’s director and accountant.

The assessee was not allowed to cross-examine them. That mattered especially here because their status at the relevant time was itself disputed — whether they were directors or shareholders when the transaction is said to have happened was part of what was in issue. A witness whose position is contested is precisely the witness you need to question.

The authority is Andaman Timber Industries v. CCE, 2015 (324) ELT 641 (SC). Where statements are made the basis of the demand, refusing cross-examination is a serious flaw, and it renders the order a nullity. It is not cured by the adjudicating authority thinking the questioning would have produced nothing useful — that was the very reasoning the Supreme Court overturned.

Why this one was remanded and the others were quashed

Three other appeals decided by the same bench on the same day were quashed outright for a mechanical sanction under section 151 — see The Sanction That Says Nothing.

This one was sent back. The difference is worth understanding, because it decides what you should be asking for.

A defective sanction goes to jurisdiction. The power to reopen never arose, so there is nothing to repair and nothing to send anywhere. A missing certificate and a denied cross-examination go to procedure: the material might still be provable and the witnesses might still be produced. The Tribunal called the certificate failure an irregularity, and an irregularity is curable — by doing it properly, with the assessee present.

Which is why a jurisdictional ground, where you have one, is worth more than an evidentiary one. It ends the matter. An evidentiary ground buys you a second round, conducted fairly.

What to do with an addition built on somebody else’s search

• Ask what the document actually is. A printout from a seized computer is not the computer. Ask for the certificate, and now ask whether it carries two signatures and the hash value.
• Ask for the material itself, not a summary of it in the assessment order. You cannot test an extract.
• Demand cross-examination in writing, and early. A request made and refused is a ground; a request never made is an argument you have to explain away later.
• Attack the witness’s standing where it is doubtful. Here the directorship and shareholding at the relevant date were disputed, which made the refusal more serious, not less.
• Check the sanction and the notice as well. A jurisdictional defect, if it is there, ends the proceeding instead of restarting it — see Six Days Is Not Seven and the section 151 note above.

This note is general information drawn from a reported decision and the statute, not advice on your matter. The order discussed was decided on its own record, and the provision governing electronic evidence depends on when the question arises.