Section 153C satisfaction must be recorded promptly; inordinate unexplained delay can vitiate proceedings despite parallel reassessment.

Parallel reassessment under section 147 did not, by itself, invalidate section 153C proceedings; the Tribunal found no legal bar merely because both proceedings were pending at the same time, and rejected that objection. By contrast, the satisfaction note and notice under section 153C had to be recorded within a reasonable and effective time after the search-related process, and an unexplained delay of nearly four years was held to vitiate the proceedings. On that jurisdictional ground, the section 153C action was quashed and the assessee succeeded, while the challenge based on parallel proceedings failed.

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Issues: (i) whether reassessment proceedings under section 147 could continue in parallel with proceedings under section 153C; (ii) whether recording of satisfaction and issuance of notice under section 153C after an inordinate delay of about four years vitiated the proceedings.

Issue (i): Whether reassessment proceedings under section 147 could continue in parallel with proceedings under section 153C.

Analysis: The Tribunal noted that the case law relied on by the assessee resulted in quashing of section 147/148 proceedings where section 153C proceedings had primacy, but did not establish the converse proposition that section 153C proceedings fail merely because section 147 proceedings were also pending. On the facts, the existence of parallel proceedings did not, by itself, show illegality in the section 153C action.

Conclusion: The issue was decided against the assessee.

Issue (ii): Whether recording of satisfaction and issuance of notice under section 153C after an inordinate delay of about four years vitiated the proceedings.

Analysis: The Tribunal held that section 153C does not prescribe a rigid four-year limitation for recording satisfaction, but the satisfaction note must still be recorded within a reasonable and effective time frame in the course of the search-related proceedings. Applying the reasoning of the cited precedent, the Tribunal found that a delay of nearly four years in recording satisfaction and issuing notice was not justified and defeated the requirement of prompt action under the provision.

Conclusion: The issue was decided in favour of the assessee; the section 153C proceedings were quashed on this ground.

Final Conclusion: The assessee succeeded on the jurisdictional challenge based on delay in recording satisfaction under section 153C, while the objection regarding parallel proceedings under sections 147 and 153C was rejected; the appeals were ultimately allowed.

Ratio Decidendi: In section 153C proceedings, satisfaction must be recorded within a reasonable and prompt time after the search-related process, and an inordinate unexplained delay can vitiate the proceedings.

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