Jurisdiction under section 153C depends on proper satisfaction that seized material pertains to the third party assessee.

For proceedings under section 153C of the Income-tax Act, proper satisfaction that seized material pertains to or relates to the third party assessee is a jurisdictional condition precedent. Where the Assessing Officer does not record such satisfaction in the required manner, jurisdiction to frame the assessment fails. Applying that principle, the Tribunal held the assessments under section 153C read with section 143(3) could not be sustained and quashed them for want of proper satisfaction.

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Issues: Whether the assessments framed under section 153C read with section 143(3) of the Income-tax Act, 1961 were valid in the absence of proper satisfaction recording that the seized material pertained to or related to the assessees.

Analysis: The search was conducted in the case of a third party group, and the Assessing Officers recorded satisfaction to proceed against the assessees under section 153C. The governing post-amendment legal position requires the seized material to be shown as pertaining to or relating to the third party assessee, and the recording of proper satisfaction is a condition precedent for assumption of jurisdiction. Applying the earlier tribunal view on the same issue, the Tribunal found no basis to sustain the impugned assessments.

Conclusion: The assessments under section 153C read with section 143(3) were quashed for want of proper satisfaction, in favour of the assessees.

Ratio Decidendi: For proceedings under section 153C of the Income-tax Act, 1961, proper satisfaction that the seized material pertains to or relates to the third party assessee is a jurisdictional condition precedent, and failure to record such satisfaction invalidates the assessment.

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