Validity of consolidated satisfaction note for multiple years u/s153C search-linked assessments; proceedings for 2015-17 quashed.

The dominant issue was whether jurisdiction under s.153C could be validly assumed on the basis of a single consolidated satisfaction note covering multiple assessment years. Applying HC authority requiring a separate satisfaction note for each assessment year, the Tribunal held that a consolidated note for different years vitiates the mandatory jurisdictional precondition and renders the consequential proceedings void. Accordingly, the assessments framed under s.153C for AYs 2015-16 and 2016-17 were quashed and the appeal was allowed.

---

---

1. ISSUES PRESENTED AND CONSIDERED

(i) Whether assumption of jurisdiction under section 153C was vitiated because the Assessing Officer recorded a single consolidated satisfaction note for multiple assessment years (2011-12 to 2017-18), instead of recording year-specific satisfaction for each assessment year sought to be assessed.

2. ISSUE-WISE DETAILED ANALYSIS

Issue (i): Validity of section 153C jurisdiction where a consolidated satisfaction note covers multiple assessment years

Legal framework (as discussed by the Tribunal): The Tribunal examined the statutory requirement of recording "satisfaction" for initiating action under section 153C, and addressed whether such satisfaction must be recorded separately for each assessment year. The Tribunal also considered how jurisdiction under section 153C is to be validly triggered and the effect of non-compliance on the consequential assessments.

Interpretation and reasoning: The Tribunal found, on the face of the satisfaction note recorded by the Assessing Officer of the assessee, that it was a consolidated satisfaction note issued "in one go" for assessment years 2011-12 to 2017-18, rather than being recorded independently for each assessment year. The Tribunal treated the question as going to the "root of the matter" because it concerned the foundational jurisdictional condition for issuance of notice and framing of assessments under section 153C. Faced with competing judicial views on whether a consolidated satisfaction note is permissible, the Tribunal applied the construction favourable to the assessee and followed the decisions it considered supportive of the requirement of year-wise satisfaction, holding that the consolidated approach adopted here vitiated the initiation itself.

Conclusions: The Tribunal held that recording a consolidated satisfaction note for various assessment years is fatal to the assumption of jurisdiction under section 153C for the years under appeal. Consequently, the assessments framed under section 153C for AY 2015-16 and AY 2016-17 were quashed. Since the assessments were quashed on jurisdiction, the Tribunal did not adjudicate the remaining grounds and expressly left them open.

---