Section 153C satisfaction and limitation block must be correctly recorded and computed before assessments can stand.

Proceedings under section 153C require prior recorded satisfaction in the file of the searched person that seized material belongs to another person; without that jurisdictional step, the assessment cannot be sustained. The six-year block under the proviso is computed from the date the books, documents or assets are received by the Assessing Officer of the other person, not from the search date. On the stated facts, no such satisfaction was recorded and the assessments were framed on an incorrect block basis, so the jurisdictional foundation failed and the issue was decided in favour of the assessee.

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Issues: Whether the assessments made under section 153C were valid in the absence of satisfaction recorded in the file of the searched person, and whether the assessments could be sustained when the relevant six-year block had to be reckoned from the date of receipt of documents rather than the date of search.

Analysis: The assessment under section 153C requires prior satisfaction to be recorded in the file of the searched person that the seized material belongs to another person. On the admitted facts, no such satisfaction had been recorded in the file of the searched person, and the Assessing Officer's remand report also accepted that position. The proviso to section 153C substitutes the date of search with the date on which the books of account, documents, or assets are received by the Assessing Officer of the other person, and the six preceding assessment years must therefore be determined with reference to that date. The assessments were framed on an incorrect assumption of the search year and the appellate authority did not properly consider the additional evidence placed on record. In these circumstances, the jurisdictional foundation of the assessments failed.

Conclusion: The assessments were unsustainable for want of the mandatory recorded satisfaction and for incorrect application of the six-year block under section 153C; the issue was decided in favour of the assessee.

Ratio Decidendi: For an assessment under section 153C to be valid, satisfaction must be recorded in the file of the searched person before proceedings are initiated against the other person, and the limitation block is to be computed from the date of receipt of the seized material by the Assessing Officer of the other person.

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