Immediacy requirement for seizure-linked Section 153C notices: undue delay vitiated notice and assessment against the assessee.

Section 153C seizure-linked notices require a contemporaneous satisfaction note and prompt issuance; where recording of satisfaction and notice issuance occur only after an undue delay following completion of the searched person's assessment (approximately ten months here), the temporal immediacy requirement is breached. CBDT Circular No.24/2015 and higher-court guidance impose and confirm this prompt-action requirement. Applying those principles, the delayed notice dated 03/08/2022 and consequent assessment dated 12/03/2024 were held invalid as outside permissible temporal contours and were quashed.

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Issues: (i) Whether the notice issued under Section 153C of the Income-tax Act, 1961 on 03/08/2022 and the consequent assessment dated 12/03/2024 are valid where the satisfaction note recording that seized material relates to the assessee was recorded and notice issued about ten months after completion of assessment of the searched person.

Analysis: The issue requires examination of the timing and validity of recording satisfaction and issuance of notice under provisions materially akin to Section 158BD as interpreted by higher courts and applied to Section 153C. The legal framework includes the requirement that a satisfaction note is a prerequisite and may be recorded at or along with initiation of proceedings against the searched person, in the course of assessment proceedings, or immediately after completion of assessment, together with CBDT Circular No.24/2015 which implements and directs compliance with the Supreme Court's guidelines. Authorities referenced establish that where recording of satisfaction and issuance of notice after completion of assessment is not done immediately and there is an undue delay (as in a gap of about ten months), the action falls outside the permissible temporal contours and the notice and consequent assessment are vitiated by lapse of the immediacy requirement. The divergent authority relied upon by the Revenue does not negate the applicability of the favourable view to the assessee where higher courts and CBDT guidance require prompt action.

Conclusion: The notice issued under Section 153C of the Income-tax Act, 1961 dated 03/08/2022 and the assessment order dated 12/03/2024 are invalid and void ab initio and are quashed. The appeal is allowed in favour of the assessee.

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