MUMBAI: In her capacity as legal heir of her late husband, deputy CM Sunetra Ajit Pawar has secured relief from the Income-tax Appellate Tribunal (ITAT), which quashed proceedings initiated under Section 153C of the Income-tax Act and deleted the addition of Rs 32.14 crore as unexplained income. While the tax department put forward diaries and digital material to prove that Ajit Pawar was the recipient of certain alleged transactions in financial year 2019-20, the ITAT bench found the evidence insufficient.Sunetra Pawar’s role in the proceedings was procedural. During the pendency of the appeal, Ajit Pawar passed away in a plane crash, following which she was brought on record. Section 153C proceedings are triggered when during a search on one person, the tax department finds material allegedly relating to another person and seeks to assess the other person’s income based on seized ‘evidence’. In this case, documents seized during a July 2020 search on the Triton Group led the department to treat Rs 32 crore as ‘unexplained income’ in the hands of Ajit Pawar, which would be subject to a harsh tax rate exceeding 70%.The ITAT bench comprising judicial member Amit Shukla and accountant member Makarand Vasant Mahadeokar upheld the order of the Commissioner (Appeals). They pointed out that section 153C proceedings were unsustainable in the absence of legally admissible and credible evidence. The tribunal, in particular, flagged the reliance on data from the Truecaller app as insufficient.During the search and seizure operation conducted on the Triton Group, handwritten diaries and notebooks were recovered from Jiten Pujari, who was associated with the group. The documents contained entries of alleged cash transactions of Rs 32 crore against a person identified only by the initials “DD”. Based on these entries and digital material such as WhatsApp chats, SMS exchanges and mobile contact details, the I-T officer concluded that “DD” referred to Ajit Pawar and initiated proceedings under Section 153C. The I-T officer treated this sum as unexplained income for Ajit Pawar in 2019-20.Before the tribunal, the I-T department argued that the identity of “DD” could be reasonably linked to Ajit Pawar through corroborative circumstances. It relied on a mobile number stored as “DD Personal” in the phone of an individual associated with the Triton group. This number, on the Truecaller app appeared as “Ajit Pawar Baramati”. The I-T department also cited WhatsApp chats referring to “Dada”, a name commonly associated with Ajit Pawar and contended that the diaries and digital records formed a coherent evidentiary chain pointing towards him.Counsel for Sunetra (legal heir) countered that the jurisdictional requirements for invoking Section 153C were not met. The provision requires that seized material must belong to or relate to a person other than the searched person. It was argued that these conditions were not satisfied in the present case. The seized diaries were recovered from Jiten Pujari’s possession, and Ajit Pawar was neither their author nor custodian. His name did not appear in the documents. The entire case, it was argued, rested on the assumption that the initials “DD” referred to him-an inference that was speculative and legally untenable.The ITAT bench agreed with this contention. It noted that the author of the diaries had not identified Ajit Pawar as the person denoted by “DD” and had instead explained that the abbreviation was used generically for high-value transactions. In the absence of any direct evidence linking Pawar to the entries, the tax tribunal held that the “primary evidentiary link” was missing.It further observed that once the jurisdictional requirement of establishing a legally sustainable nexus between the seized material and the taxpayer failed, the entire assessment collapsed. Consequently, the addition could not be sustained. Rejecting the reliance on digital evidence, the tax tribunal held that WhatsApp chats and other electronic material did not contain explicit references to the diary entries. It also found the attempt to link the initials “DD” with a mobile contact and to rely on crowd-sourced Truecaller data to be tenuous and far-fetched. Digital information, the bench emphasised, cannot form the sole basis of tax additions unless supported by credible authentication and corroboration.The ITAT concluded that the I-T officer’s satisfaction on the evidence relied upon by him, failed to establish a clear and legally sustainable link between the seized material and Ajit Pawar. Accordingly, the action of the I-T officer was set aside.
