Specific satisfaction note required for section 153C jurisdiction; vague third-party material could not sustain the assessment.

Recording of satisfaction is a jurisdictional precondition for invoking section 153C, and it must be specific, year-wise and supported by cogent seized material showing that the material belongs to or pertains to the assessee and bears on total income. A common, vague or mechanical satisfaction note for multiple years, without identification of incriminating material or nexus with undisclosed income, reflects non-application of mind and is insufficient. On the facts discussed, a third-party ledger without independent corroboration or meaningful enquiry did not establish the required nexus. For an unabated assessment, the absence of a valid satisfaction note made the assumption of jurisdiction under section 153C unsustainable, and the notice and consequential assessment order were quashed.

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Issues: Whether the assumption of jurisdiction under section 153C of the Income-tax Act, 1961 was valid where the satisfaction note was common, vague and mechanical and no specific incriminating material relatable to the relevant assessment year was identified.

Analysis: Recording of satisfaction is a condition precedent for invoking section 153C. The satisfaction must be specific, founded on cogent material, and must clearly show that the seized material belongs to or pertains to the assessee and has a bearing on the determination of total income for the relevant year. A common satisfaction note for multiple years, without year-wise identification of incriminating material or nexus with undisclosed income, reflects non-application of mind and does not satisfy the statutory requirement. In the present case, the material was a third-party ledger without independent corroboration, without meaningful enquiry, and without establishing a nexus with undisclosed income of the assessee. The assessment being unabated, the absence of a valid and specific satisfaction note rendered the jurisdictional assumption unsustainable.

Conclusion: The assumption of jurisdiction under section 153C was invalid and unsustainable in law, and the notice under section 153C along with the consequent assessment order was quashed.

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