WhatsApp Chats Used as Key Evidence in Rs 4.5 Crore Tax Evasion Case

Jaipur: In a ruling with implications for digital privacy and evidence, the Rajasthan High Court has upheld the admissibility of WhatsApp chats as valid evidence in a tax evasion case. The court dismissed a petition by businessman Giriraj Punglia, whose WhatsApp messages became a key piece of proof in an ongoing probe led by the Income Tax Department.

The case revolves around the Om Kothari Group, which came under scrutiny after a raid by the Income Tax Department’s Jaipur Investigation Directorate on Jul 13, 2020. During the operation, officials recovered a mobile phone containing WhatsApp conversations that pointed to unaccounted transactions amounting to Rs 4.52 crore. The messages revealed details about property deals in Jaipur that had not been disclosed in financial records.

What made the chats especially telling was the use of code language. Investigators discovered that terms like “one file” were used to indicate Rs 1 lakh, and “100 gm gold bar” stood in for substantial cash sums. These encrypted messages, once decoded, laid bare a web of undeclared real estate transactions involving plots in Jaipur’s VKI area.

On Jun 16, 2023, the Income Tax Department issued a notice to the group, acting on the findings. In response, Punglia challenged the department’s reliance on WhatsApp chats, arguing that no physical documentation of the alleged transactions had been recovered. He insisted that his income tax returns showed an income of Rs 41,89,700, and that digital messages alone should not be considered sufficient evidence.

However, the court disagreed. A bench comprising Justices Pushpendra Singh Bhati and Chandraprakash Srimali ruled that the WhatsApp chats qualified as “other documents” under Section 153C of the Income Tax Act. The judges stated that the chats were neither vague nor ambiguous. Since both individuals in the conversations were linked to the Om Kothari Group and the messages clearly outlined cash dealings and land acquisitions, the court said they held evidentiary value.

The Income Tax department, represented by advocate K.K. Bissa, argued that the transactions mentioned in the chats were further backed by statements from employees and data from seized digital devices. These details included specifics of payments made and property locations, reinforcing the case that the group had engaged in undisclosed cash transactions.

Punglia’s lawyers, Aditya Vijay and Pankaj Arora, had maintained that WhatsApp messages without supporting physical documents couldn’t establish guilt. But the court found that the chats, supported by corroborative evidence, met the threshold of legality and relevance required by law.

With the court’s decision to dismiss the petition, the WhatsApp chats now stand as central evidence in the case, marking a notable instance where digital conversations played a decisive role in a financial investigation.