Search-derived satisfaction under Section 158BD is mandatory; without material linking undisclosed income to another person, proceedings fail.

Section 158BD can be invoked only when the Assessing Officer, on the basis of search-derived material, reaches an objectively justifiable prima facie satisfaction that undisclosed income belongs to a person other than the searched person. Mere issuance of notice cannot replace this jurisdictional foundation, and proceedings cannot rest on unsupported assertion or on reappraisal of facts already known to the Department. Where no material emerges from the search to indicate undisclosed income of the other person, the notice is not justified and the resulting assessment is invalid.

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Issues: Whether satisfaction of the Assessing Officer must be based on material found in search and whether absence of such satisfaction or material under section 158BD of the Income-tax Act, 1961 invalidates the assessment.

Analysis: Section 158BD operates as an extension of the search assessment scheme under Chapter XIV-B and can be invoked only when the Assessing Officer, on the basis of search material, reaches a prima facie and objectively justifiable satisfaction that undisclosed income belongs to a person other than the searched person. The existence of material is the jurisdictional foundation; mere issue of notice cannot substitute for the required satisfaction. While recording of satisfaction in a particular form may not always be mandatory where material clearly exists, the proceedings cannot rest on ipse dixit or on re-appraisal of facts already within the Department's knowledge. In these cases, no material emerged from the search to indicate undisclosed income of the other persons.

Conclusion: The notice under section 158BD was not justified and the assessments made pursuant to it were annulled.

Ratio Decidendi: For invoking section 158BD of the Income-tax Act, 1961, the Assessing Officer must have search-derived material leading to an objectively justifiable satisfaction that undisclosed income belongs to a person other than the searched person; absence of such material goes to jurisdiction and invalidates the proceedings.

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