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of <h1>Validity of consolidated satisfaction note for multiple years u/s153C search-linked assessments; proceedings for 2015-17 quashed.</h1> The dominant issue was whether jurisdiction under s.153C could be validly assumed on the basis of a single consolidated satisfaction note covering ... Validity of assumption of jurisdiction u/s 153C - whether recording of consolidated satisfaction note for various assessment years and assuming jurisdiction under section 153C of the Act would be fatal to the very assumption of jurisdiction u/s 153C of the Act or not ? HELD THAT:- This issue is no longer res integra in view of the decision of Sunil Kumar Sharma [2024 (2) TMI 116 - KARNATAKA HIGH COURT] held that satisfaction note is required to be recorded u/s 153C of the IT Act for each Assessment Year and in the impugned proceedings, a consolidated satisfaction note has been recorded for different Assessment Years, which also vitiates the entire assessment proceedings. Also see Saksham Commodities Ltd. [2024 (4) TMI 461 - DELHI HIGH COURT] Thus, recording of consolidated satisfaction note for various assessment years by the Learned AO would become fatal to the very assumption of jurisdiction and consequential framing of assessment under section 153C of the Act for the assessment years 2015-16 and 2016-17 in the instant case. Accordingly the assessments framed under section 153C of the Act for the assessment years 2015-16 and 2016-17 are hereby quashed. Assessee appeal allowed. Issues: (i) Whether recording a consolidated satisfaction note for multiple assessment years and issuing notices under Section 153C of the Income-tax Act, 1961 is valid, and whether such consolidated satisfaction vitiates the assumption of jurisdiction under Section 153C for the assessment years 2015-16 and 2016-17.Analysis: The issue concerns whether the jurisdictional precondition for invoking Section 153C a satisfaction that seized books, documents or assets are likely to have a bearing on the determination of total income of the non-searched person for the relevant assessment year(s) can be met by a single consolidated satisfaction note covering multiple assessment years, or whether separate, year-specific satisfaction is required. The legal framework includes Section 153C (read with Section 153A) and the requirement that the seized material be incriminating and bear a nexus to the particular assessment year sought to be reopened or reassessed. Precedents and principles emphasize that Section 153C proceedings must be grounded on material that is prima facie capable of impacting the computation of income for the particular assessment year(s) and that formation of opinion (satisfaction) as to that nexus is a necessary precondition to issuance of notice and abatement of assessments. Applying these principles, a consolidated satisfaction note which fails to record year-wise reasons and to show that the seized material is likely to influence the total income for the specific assessment years undermines the jurisdictional basis required by Section 153C.Conclusion: The consolidated satisfaction note recorded for multiple assessment years vitiates the assumption of jurisdiction under Section 153C and the consequential assessments framed thereunder for the assessment years 2015-16 and 2016-17 are quashed.
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