Can the Income Tax Department use electronic evidence in assessments or appeals without a Section 65B certificate of the Indian Evidence Act ?
One may note that section 65B of the Indian Evidence Act and section 65 of the Bharatiya Sakshya Adhiniyam, 2023 both govern the admissibility of electronic records, requiring a certificate from an expert to validate such evidence in legal proceedings.
The question that arose in this case was whether a Section 65B certificate is required to admit digital evidence in income tax assessment proceedings as well?
The Madras High Court has held that the Income Tax Department can use digital evidence without a Section 65B certificate as Income-tax proceedings are not judicial court proceedings. They are quasi-judicial-more administrative in nature-so they are not strictly bound by the rules of the Evidence Act. It ruled that assessment proceedings are not governed by the Evidence Act and hence, electronic records can be admitted even without a 65B certificate. Even if departmental manuals (like the Digital Evidence Manual) recommend compliance with Section 65B, such instructions cannot override the law or Supreme Court rulings which exempt quasi-judicial authorities from strict evidentiary rules.
However, the court clarified that assessees can still challenge the authenticity or reliability of electronic records, but not on the technical ground of absence of certification.
The recent Trend in tax proceeding:
Gone are the days when technicalities could triumph over truth. As courts embrace the spirit of substantive justice, procedural rigidity-like demanding certificates meant for courts-will no longer invalidate assessment proceedings. It seems Courts are broadly taking a view that in the age of digital evidence, what matters is credibility, not certification.
The Madras High Court’s reasoning is aligned with established tax jurisprudence. However, in an era where electronic evidence is often central and complex, a complete exemption from foundational safeguards like 65B certification could lead to a dilution of evidentiary fairness.
Perhaps the way forward lies not in blindly applying or ignoring Section 65B, but in developing tax-specific evidentiary standards-balancing flexibility with procedural integrity.
The copy of the order is as under:
