Immediate recording requirement for satisfaction notes is mandatory; delay or missing DIN invalidates subsequent search-triggered proceedings.

A satisfaction note initiating search-triggered assessment proceedings must be recorded immediately after completion of the searched person's assessment; a delay of approximately fifteen months rendered the impugned proceedings time-barred. Separately, such satisfaction notes qualify as communications requiring a Document Identification Number under the applicable CBDT circular, and absence of a DIN invalidates the communication. The combined effect is that a notice issued to commence proceedings based on a delayed or DIN-less satisfaction note is quashed and the consequential proceedings set aside, with both defects independently fatal to the exercise of the power to proceed.

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Issues: (i) Whether the proceedings under Section 153C of the Income-tax Act, 1961 are barred by limitation because the satisfaction note was recorded after delay; (ii) Whether the satisfaction note is invalid for want of a Document Identification Number (DIN).

Issue (i): Whether the satisfaction note was recorded within the time frame required by law or whether the delay renders proceedings under Section 153C barred by limitation.

Analysis: The Supreme Court in Calcutta Knitwears requires the satisfaction note to be prepared at specified stages and, if recorded after completion of assessment of the searched person, it must be recorded "immediately" thereafter. CBDT Circular No. 24/2015 applies that principle to Section 153C proceedings. Decisions of various High Courts have held delays of 9-15 months or more to be fatal where the statutory requirement of "immediately" is not met. In the present case the assessment of the searched person was completed before 31.03.2023 but the satisfaction note was recorded on 27.06.2024, a delay of approximately 15 months; the satisfaction note of the Assessing Officer of the petitioner was also undated, casting further doubt on timing. The Department's contention of voluminous data and a "reasonable time" was found inconsistent with the Supreme Court's use of the term "immediately" and the CBDT Circular.

Conclusion: The satisfaction note was recorded after an inordinate delay and the proceedings under Section 153C are barred by limitation; this conclusion is against the Revenue and in favour of the assessee.

Issue (ii): Whether the satisfaction note is invalid for lacking a Document Identification Number (DIN).

Analysis: CBDT Circular No. 19/2019 requires specified communications to bear a DIN. This Court's precedent treats satisfaction notes as communications falling within the scope of the Circular. Decisions purporting to treat satisfaction notes as merely internal communications not requiring DIN have been distinguished and not followed. In the present case the satisfaction note did not bear a DIN and relevant precedents and the CBDT Circular were applied to treat such communications as invalid.

Conclusion: The satisfaction note without a DIN is invalid and deemed never to have been issued; this conclusion is against the Revenue and in favour of the assessee.

Final Conclusion: The impugned notice dated 30.03.2025 issued under Section 153C of the Income-tax Act, 1961 and consequential proceedings are quashed and set aside on the grounds of limitation and absence of a DIN; the writ petition is allowed.

Ratio Decidendi: A satisfaction note relied upon to initiate Section 153C proceedings must be recorded "immediately" after the searched person's assessment as required by Calcutta Knitwears and CBDT Circular No. 24/2015, and any such communication must comply with CBDT Circular No. 19/2019 by bearing a DIN; failure on either ground renders the notice and proceedings invalid.

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