Section 158BD jurisdiction depends on recorded satisfaction that seized material shows undisclosed income of another person.

Section 158BD requires the Assessing Officer to record an objective and cogent satisfaction, based on seized material or material relatable to it, that undisclosed income belongs to a person other than the searched person before initiating action against that other person. A mere reference to documents or an appraisal report is insufficient if the note does not expressly show the necessary jurisdictional satisfaction. On the stated facts, no enquiry or investigation was shown between the search and the notice, and the jurisdictional foundation was held invalid, resulting in annulment of the assessment made pursuant to that notice.

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Issues: Whether the Assessing Officer validly assumed jurisdiction under section 158BD of the Income-tax Act, 1961 without recording satisfaction that the seized material showed undisclosed income belonging to a person other than the searched person.

Analysis: Section 158BD requires the Assessing Officer to be satisfied, on the basis of seized material or material relatable to it, that undisclosed income belongs to a person other than the searched person before proceeding against such other person. The satisfaction must be objective and based on cogent material, and is not a mere formality. On the facts, although documents relating to the assessee were said to have been found, no enquiry or investigation was shown to have been undertaken between the search and the notice under section 158BD, and the recorded note did not express the necessary satisfaction that the undisclosed income belonged to the assessee. The appraisal report could not by itself supply the jurisdictional foundation.

Conclusion: The assumption of jurisdiction under section 158BD was invalid, and the assessment made pursuant to that notice was annulled.

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