The court established that unreasonable delays in recording satisfaction notes under Section 153C of the Income Tax Act invalidate subsequent notices, emphasizing the imperative for timely procedural compliance.

JUDGMENT :

A.S. SUPEHIA, J.

(1) These writ petitions raise identical issues and, therefore, with the consent of the parties, the same are decided by a common judgement and order.

(2) The issue involved in these petitions pertains to the challenge to the issuance of a notice under Section 153C of the Income Tax Act, 1961 (“the Act” for short) by the respondent authority upon the petitioner for the Assessment Year 2017–18.

(3) The facts, as narrated in Special Civil Application No.3736 of 2025, are as follows:

(4) The petitioner, by way of the present petition under Article 226 of the Constitution of India, seeks to challenge the impugned notice dated 09.02.2024 issued by the respondent authority under Section 153C of the Act for the Assessment Year 2017–18. Respondent No.1 issued the impugned notice dated 09.02.2024 under Section 153C of the Act, for the Assessment Year 2017–18, calling upon the petitioner to furnish a return of income. Pursuant to the issuance of the aforesaid notice, the respondent authority supplied copies of the “satisfaction note” recorded on 14.07.2023 by the Assessing Officer of the petitioner, and another “satisfaction note” recorded on 06.06.2023 by the Assessing Officer of the “searched person”, for the purpose of invoking jurisdiction under Section 153C of the Act. A perusal of the satisfaction notes reveals that jurisdiction under Section 153C of the Act has been invoked primarily on the ground that the petitioner allegedly made an “on-money” payment for the purchase of a property.

(5) The satisfaction notes indicate that:

(a) A search action under Section 132 of the Act was carried out on 15.10.2019 in the case of a land broker and financier group of assessees, during which the residential premises of one Suresh Ranchhodbhai Thakkar (a third party) were also covered;

(b) Certain incriminating material, including WhatsApp chat images, was found and seized during the course of the said search;

(c) Upon examining some of these images, it was found that the financial transactions mentioned therein were carried out between Dharmesh Gathani, Parag Gathani, Rushisinh Thakor, and Randhirsinh Thakor;

(d) During the post-search inquiry, the statement of Suresh R. Thakkar, was recorded on 20.12.2019 under Section 131 of the Act, wherein he confirmed the chat and communication with Rushisinh Thakor regarding a land deal facilitated by Suresh Bharwad. He further stated that the land was sold by Rushisinh Thakor to Paresh Gathani, and the consideration was paid in both cash and cheque;

(e) During the course of assessment proceedings under Section 153C in the case of Rushisinh Thakor and Randhirsinh Thakor, concluded in March 2023, a registered sale deed of land bearing Survey No.135, Okaf, was produced. On perusal of the said deed, it was found that the land had been purchased in the name of Bharti Dharmesh Gathani, wife of Dharmesh Gathani, vide sale deed dated 24.07.2020, for a registered consideration of Rs. 3,80,00,000/-;

(6) The petitioner, vide letter dated 06.03.2025, raised objections against the initiation of proceedings under Section 153C of the Act for the year under consideration.

(7) Learned Senior Advocate Mr.Tushar Himani, has submitted that the satisfaction note for initiating proceedings under Section 153C of the Act was recorded nearly four years by the Assessing Officer after the search and almost two years after the assessment of the searched person had been completed. This reflects an inordinate delay in the initiation of proceedings under Section 153C of the