Section 153C satisfaction note dispute led to admission of appeal and enquiry into missing assessment records.

Proceedings under section 153C were questioned on the ground that no satisfaction note had been recorded by the AO of the searched person, and the appeal was admitted on that substantial question of law. The Court also directed an enquiry into the disappearance of assessment records and required a report from the Principal Commissioner of Income Tax. The document highlights that the absence of a satisfaction note and the missing records were treated as issues warranting judicial examination before further consideration of the matter.

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Issues: (i) Whether the appeal should be admitted on the proposed substantial questions of law concerning validity of proceedings under section 153C for want of a satisfaction note by the AO of the searched person. (ii) Whether an enquiry should be directed into the disappearance of assessment records and a report called for from the Principal Commissioner of Income Tax.

Outcome: The appeal was admitted on the substantial questions of law, and directions were issued for an enquiry into the missing records with a report to be filed before the Court.

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