2025 (9) TMI 1769 - AT - Income Tax

Year-wise satisfaction under section 153C is essential; a consolidated satisfaction note can invalidate jurisdiction.

Section 153C jurisdiction was examined on the basis of a common satisfaction note covering assessment years 2012-13 to 2018-19. The Tribunal's view was ... Validity of satisfaction note u/s 153C - Consolidated satisfaction for multiple assessment years - need for Satisfaction note for each assessment year - combined satisfaction note for assessment years 2012-13 to 2018-19 - HELD THAT: - We find an identical issue had come up before the Co-ordinate Bench of the Tribunal in the case of Chitra Narendra Parmar [2025 (7) TMI 1050 - ITAT PUNE] for assessment years 2016-17 and 2017-18, where the Tribunal, following the decision of Sunil Kumar Sharma [2024 (2) TMI 116 - KARNATAKA HIGH COURT] and distinguishing the decision of Indian National Congress [2024 (3) TMI 1126 - DELHI HIGH COURT] has quashed the assessment proceedings passed u/s 153C of the Act on account of combined satisfaction. Assessment proceedings initiated u/s 153C of the Act on account of combined satisfaction are not valid in law and accordingly the same are quashed.[Paras 27, 28,] Final Conclusion: The Tribunal held that the common satisfaction notes recorded for multiple assessment years under section 153C were legally unsustainable, and consequently quashed the assessments for 2012-13 to 2018-19. Issues: Whether the assessment initiated under section 153C was valid when the satisfaction note covered multiple assessment years together instead of recording separate satisfaction for each year.Analysis: The assessment was founded on a common satisfaction note recorded for assessment years 2012-13 to 2018-19. The Tribunal applied the view that section 153C requires satisfaction to be recorded year-wise for the relevant assessment year, and that a consolidated satisfaction note for several years vitiates the assumption of jurisdiction. Since the legal challenge went to the root of the proceedings, the merits of the additions were treated as academic.Conclusion: The combined satisfaction note rendered the proceedings under section 153C invalid, and the assessment was quashed. The challenge succeeded in favour of the assessee.