Recording of satisfaction note : Circular No. 24/2015 dt. 31.12.2015
The CBDT explained the law relating to recording of satisfaction note by the AO u/s 158BD/153C of the Income-tax Act. The CBDT has drawn attention to the verdict of the Supreme Court in CIT vs. Calcutta Knitwears 362 ITR 673 in which the stages at which the satisfaction note has to be prepared have been set out. Recording of a satisfaction note is a prerequisite and the satisfaction note must be prepared by the AO before he transmits the record to the other AO who has jurisdiction over such other person u/s 158BD. The CBDT has further clarified that even if the AO of the searched person and the “other person” is one and the same, then also he is required to record his satisfaction as has been held by the Courts.
Accordingly, the Board hereby directs that pending litigation with regard to recording of satisfaction note u/s 158BD /153C should be withdrawn/not pressed if it does not meet the guidelines laid down by the Apex Court.