New Delhi, Dec. 2 -- As digital footprints become increasingly central to financial investigations, WhatsApp chats have quietly emerged as one of the most frequently-cited forms of evidence in income-tax proceedings.

Over the past few years, smartphones seized during search operations have routinely yielded screenshots, forwarded messages and fragments of conversations that the tax department believes point toward unreported cash transactions or unrecorded business income. These chats have been used as evidence to issue notices, justify additions, initiate reassessment proceedings and, in several cases, form the basis of protective assessments. In tax parlance, an "addition" refers to the inclusion of an amount in an assessee's taxable i...