Section 153C satisfaction note must be recorded immediately after search assessment; delayed notice found invalid

Section 153C satisfaction must be recorded immediately after completion of the searched person's assessment; "immediately" was held not to mean merely within a reasonable time. Applying that principle, the HC found a delay of nearly 10 months between completion of the searched person's assessment and the satisfaction note, which failed the jurisdictional requirement for initiating proceedings. The Court also noted that the cash and jewellery relied on had been seized from the petitioner's premises and locker, making the delay in recording satisfaction even less justifiable. The impugned notices under Section 153C were therefore invalid and liable to be quashed.

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Issues: Whether the notices issued under Section 153C of the Income-tax Act, 1961 were valid where the satisfaction note of the Assessing Officer of the searched person was recorded about 10 months after completion of that person's assessment.

Analysis: The Court held that the requirement of recording satisfaction under Section 153C is governed by the principle that the satisfaction note must be prepared immediately after completion of the assessment of the searched person, as explained by the Supreme Court and applied in binding precedent of this Court. The expression "immediately" was held not to mean merely within a reasonable time. On the facts, the searched person's assessment had been completed by about 27 September 2022, while the satisfaction note was dated 3 August 2023, resulting in a delay of almost 10 months. The Court also noted that the incriminating cash and jewellery relied upon for the proceedings had been seized from the petitioner's premises and locker, making the delay in recording satisfaction even less justifiable.

Conclusion: The jurisdictional requirement for initiating proceedings under Section 153C was not satisfied, and the impugned notices were invalid and liable to be quashed.

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