Section 153C satisfaction note requirement upheld; a single note suffices when one Assessing Officer handles both assessees.

For section 153C proceedings, the Assessing Officer must record mandatory satisfaction that seized material belongs to the other person. Where the same Assessing Officer handles both the searched person and the other person, one satisfaction note qua the other person is sufficient, and no separate note in the searched person's file is required. The absence of a note in the searched person's file is only an administrative lapse and does not invalidate the proceedings if the essential satisfaction note exists. The challenge to the validity of the section 153C proceedings therefore failed.

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Issues: Whether initiation of proceedings under section 153C of the Income-tax Act, 1961 was invalid merely because the satisfaction note was not recorded in the file of the searched person, where the Assessing Officer of the searched person and the other person was the same.

Analysis: The precondition for action under section 153C is that the Assessing Officer of the searched person must record satisfaction that the seized material belongs to the other person. That requirement is mandatory, even when the same Assessing Officer handles both assessees. However, the statute does not require two separate satisfaction notes in such a situation. A single satisfaction note qua the other person is sufficient, and there is no requirement of inter-office transmission where the officer is the same. The absence of a note in the searched person's file is only an administrative lapse and does not vitiate the proceedings if the essential satisfaction note exists.

Conclusion: The challenge to the validity of the section 153C proceedings failed, and the view that the assessment was liable to be set aside for want of satisfaction in the searched person's file was held to be unsustainable.

Ratio Decidendi: For proceedings under section 153C, the mandatory requirement is recording of satisfaction that the seized material belongs to the other person; where the Assessing Officer is common to both persons, one satisfaction note qua the other person is enough and the absence of a separate note in the searched person's file does not invalidate the proceedings.

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