Validity of Section 153C notices: lack of recorded satisfaction or reliance on public material renders such notices invalid.

Notices issued under Section 153C are invalid where they are predicated on incriminating material not accompanied by a satisfaction note recorded by the Assessing Officer of the searched person; the statutory scheme requires transmission of seized material together with that satisfaction before the jurisdictional Assessing Officer may proceed under Section 153C, and reliance solely on public domain information or pocket diary entries without the required satisfaction cannot supply jurisdictional foundation. The jurisdictional Assessing Officer may invoke reassessment provisions only on independent material satisfying reassessment conditions; notices lacking the mandated satisfaction are liable to be quashed.

---

---

Issues: (i) Whether notices issued under Section 153C of the Income-tax Act, 1961 without a satisfaction note recorded by the Assessing Officer of the searched person and based on material from public domain/pocket diary are valid.

Analysis: The statutory scheme requires that where incriminating material relating to a person other than the searched person is found during search under Sections 132/132A and transmitted to the jurisdictional Assessing Officer of that other person, a satisfaction note recorded by the Assessing Officer of the searched person must accompany the material before the jurisdictional Assessing Officer proceeds under Section 153C. Reliance on material not forming part of the seized records or on public domain data, without the requisite satisfaction recorded and communicated, cannot constitutionally or statutorily supply the jurisdictional foundation to invoke Section 153C. The jurisdictional Assessing Officer may resort to Sections 147/148 only when independent material, other than the incriminating material transmitted sans satisfaction, is available and conditions for reassessment are otherwise fulfilled.

Conclusion: Notices issued under Section 153C of the Income-tax Act, 1961 that are predicated on incriminating material not accompanied by a satisfaction note recorded by the Assessing Officer of the searched person, or that rely solely on public domain information or seized items not transmitted with a satisfaction note, are invalid and liable to be quashed.

---