Third-party search material cannot sustain 153C jurisdiction without separate satisfaction note; assessment quashed.

Jurisdiction under section 153C could not be sustained for an unabated year where the alleged on-money addition rested not on incriminating material found in the assessee's own search, but on third-party material from an earlier search in another case. A separate satisfaction note was required before such material could be invoked against the assessee, and the absence of that recorded satisfaction meant the statutory precondition was not met. The assumption of jurisdiction was therefore bad in law, and the assessment was quashed.

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Issues: (i) Whether assumption of jurisdiction under section 153C was valid when the impugned addition rested on information from an earlier search and no separate satisfaction note for such third-party material was shown.

Analysis: The assessment was made for an unabated year. The addition of alleged on-money was not founded on incriminating material found in the assessee's own search, but on information gathered in an earlier search conducted in the case of another concern. For such third-party material, a separate satisfaction note was required before it could be used for proceedings under section 153C. In the absence of such satisfaction note, the material could not validly support the impugned assumption of jurisdiction.

Conclusion: The assumption of jurisdiction under section 153C was held to be bad in law and the assessment was quashed.

Ratio Decidendi: For an unabated assessment under section 153C, jurisdiction cannot be sustained on the basis of third-party search material unless the statutory satisfaction requirement is independently recorded and the material has a direct nexus with the assessee.

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