Section 153C proceedings fail after cutoff date; unabated year addition also falls without incriminating material.

For an "other person" under section 153C, the operative date is the receipt of seized material by the Assessing Officer, and where that cannot be ascertained, the date of satisfaction becomes decisive; on the amended regime excluding searches initiated on or after 01.04.2021, a satisfaction note recorded on 11.10.2022 could not sustain section 153C proceedings, rendering the notice and assessment invalid. For an unabated assessment year, additions in search proceedings require incriminating material found during the search; as the section 69 addition was not shown to rest on such material, the addition for assessment year 2017-18 was unsustainable and the assessment order was quashed.

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Issues: (i) Whether proceedings initiated under section 153C of the Income-tax Act, 1961 were valid where the satisfaction note was recorded after 01.04.2021; (ii) whether the addition for the unabated assessment year 2017-18 could survive in the absence of incriminating material.

Issue (i): Whether proceedings initiated under section 153C of the Income-tax Act, 1961 were valid where the satisfaction note was recorded after 01.04.2021.

Analysis: The relevant date for an 'other person' under section 153C is the date on which seized material is received by the Assessing Officer, and where that date is not ascertainable, the date of recording of satisfaction assumes significance. The amended section 153C(3) excludes its application to searches initiated on or after 01.04.2021. Applying that amended regime, and following the binding jurisdictional and coordinate bench rulings relied upon, proceedings initiated on the basis of a satisfaction note recorded on 11.10.2022 could not be sustained under section 153C.

Conclusion: The notice and assessment under section 153C were invalid and unsustainable, and the issue was decided in favour of the assessee.

Issue (ii): Whether the addition for the unabated assessment year 2017-18 could survive in the absence of incriminating material.

Analysis: For a completed or unabated assessment, additions in search-related proceedings cannot be made unless supported by incriminating material found during the search. On the facts, the addition made under section 69 was not shown to rest on any incriminating material relating to the assessee.

Conclusion: The addition for assessment year 2017-18 could not be sustained and the assessment order was quashed, in favour of the assessee.

Final Conclusion: The common assessment orders were held to be without jurisdiction and were quashed, resulting in allowance of all the appeals.

Ratio Decidendi: For an 'other person' covered by section 153C, once the satisfaction note is recorded after the cutoff date prescribed by the amended provision, proceedings under section 153C cannot be sustained; additionally, no addition can be made in an unabated search assessment absent incriminating material.

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