Section 153C notice fails without contemporaneous satisfaction; delayed initiation after search assessment makes the consequent assessment unsustainable.

Section 153C requires recording of satisfaction by the Assessing Officer of the searched person and the jurisdictional Assessing Officer at the stage of initiation, during the search assessment proceedings, or immediately after their completion. Where notice is issued after an about 20-month gap from completion of the searched person's assessment, the satisfaction is not contemporaneous with those proceedings and the notice is invalid; the assessment made on that basis cannot survive, and the merit additions become academic.

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Issues: Whether the notice issued under section 153C of the Income-tax Act, 1961 and the consequential assessment were valid when the notice was issued after a substantial gap from completion of the searched person's assessment.

Analysis: The Tribunal held that recording of satisfaction by the Assessing Officer of the searched person and by the jurisdictional Assessing Officer was a prerequisite for invoking section 153C. It accepted the settled position that such satisfaction must be recorded at the stage of initiation of proceedings against the searched person, during those proceedings, or immediately after completion of the searched person's assessment. On the facts, there was a gap of about 20 months between completion of the searched person's assessment and issuance of notice under section 153C. The Tribunal held that this delay was not contemporaneous with the assessment proceedings and that the notice was therefore invalid. Once the jurisdictional foundation failed, the assessment framed pursuant to that notice could not survive. The additions on merits were treated as academic and infructuous.

Conclusion: The notice under section 153C was held to be invalid and the assessment order was quashed, resulting in relief to the assessee.

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