Electronic data in pen drives can support assessment when supplied to the assessee and natural justice is not breached.

Electronic data in pen drives may be relied on in assessment where the material forms part of the assessee group's books or records and the relied-upon data is supplied to the assessee. On these facts, the Tribunal found no denial of natural justice because an opportunity to examine the employee had been given, but he did not appear, and rejected the challenge to cross-examination and evidentiary value. It also held that additional grounds or evidence require sufficient cause, bona fides, and necessity for just adjudication; a belated, self-serving cyber-expert opinion was not admitted, particularly where hash-value reports had already been generated in the presence of the assessee and witnesses.

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Issues: (i) Whether the pen-drive data used in assessment could be relied on without granting effective cross-examination of the person from whose premises the devices were found and whether the material had evidentiary value; (ii) whether the Tribunal should admit the additional ground and additional evidence challenging the forensic handling and admissibility of the pen-drive material.

Issue (i): Whether the pen-drive data used in assessment could be relied on without granting effective cross-examination of the person from whose premises the devices were found and whether the material had evidentiary value.

Analysis: The data in the pen drives, not the statement of the employee, formed the basis of the assessment. The assessee had been supplied with the data relied on, and the record showed that an opportunity to examine the employee had been afforded but he did not appear. The Tribunal held that the material belonged to the assessee group, that the pen drive contents constituted part of the books of account within the statutory definition, and that no violation of natural justice was made out on these facts.

Conclusion: The objection to use of the pen-drive material and the complaint regarding denial of cross-examination were rejected, against the assessee.

Issue (ii): Whether the Tribunal should admit the additional ground and additional evidence challenging the forensic handling and admissibility of the pen-drive material.

Analysis: The Tribunal held that admission of a new ground or evidence depends on sufficient cause, bona fides, and necessity for just adjudication. It found no satisfactory explanation for the delayed plea, treated the cyber-expert opinion as belated and self-serving, and held that the department had already generated hash-value reports in the presence of the assessee and witnesses. On that basis, the Tribunal declined to admit the additional ground and additional evidence.

Conclusion: The additional ground and additional evidence were not admitted, against the assessee.

Final Conclusion: The assessment based on the pen-drive material was upheld and the appeals failed in entirety.

Ratio Decidendi: Electronic data used in assessment may be relied upon when it forms part of the assessee's books or records and the assessee has been supplied the relied-upon material, while admission of fresh grounds or evidence before the Tribunal requires a bona fide explanation and sufficient cause.

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