Clear Channel India Private Limited ... vs Deputy Commissioner Of Income Tax ...
2026 Latest Caselaw 1797 Bom

Bombay High Court

Clear Channel India Private Limited ... vs Deputy Commissioner Of Income Tax ... on 17 February, 2026

Author: B. P. Colabawalla

Bench: B. P. Colabawalla

     2026:BHC-OS:4819-DB


                                                                                                2.wp.4990.2025.doc



                                       IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                                            ORDINARY ORIGINAL CIVIL JURISDICTION


                                                       WRIT PETITION 4990 OF 2025

                               Clear Channel India Private Limited                                .. Petitioner

                                         Versus

                               Deputy Commissioner of Income Tax,
                               Circle - 1(1)(1), Mumbai & Ors.                                    .. Respondents
            Digitally signed
            by UTKARSH
            KAKASAHEB
UTKARSH     BHALERAO
KAKASAHEB
BHALERAO
            Date:
            2026.02.21
            15:00:46
                                    Mr.Dharan Gandhi a/w Aanchal Vyas, Advocates for the
            +0530
                                    Petitioner.

                                    Mr. N. C. Ranganayakulu, Advocate for the Respondents.

                                                        CORAM           : B. P. COLABAWALLA &
                                                                          FIRDOSH P. POONIWALLA, JJ.

                                                        DATE            : FEBRUARY 17, 2026

                               P. C.

1. Rule. Respondents waive service. With the consent of

parties, Rule made returnable forthwith and heard finally.

2. By this Petition under Article 226 of the Constitution of

India, the Petitioner challenges the validity of the notice dated 30 th

March 2025 issued under Section 153C of the Income Tax Act, 1961

("the IT Act") for the A.Y.2016-17.

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3. Brief facts of the case are as under:-

(a) The Petitioner is a company engaged in the business of

advertising. Apparently, a search and seizure operation under

Section 132 of the IT Act was conducted on 3 rd February 2021 in

the case of Mr. Samir Modi and Ms. Shivani Modi.

Concurrently, a search was conducted on 6th February 2021 at

the residential premises of one Shri Sandeep Arora.

(b) Based on the material allegedly seized during the search on Shri

Sandeep Arora, the Assessing Officer of the searched person

recorded a satisfaction note on 27th June 2024. Consequently,

the impugned notice under Section 153C of the IT Act was

issued to the Petitioner on 30th March 2025.

4. Although various contentions have been raised in the

Petition, for the purpose of the present adjudication, we are addressing

only two contentions viz., (i) Whether the proceedings are barred by

limitation due to the delay in recording the satisfaction note? and (ii)

Whether the satisfaction note is invalid for want of a Document

Identification Number (DIN)?

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5. The first contention raised by Mr. Gandhi, the learned

Counsel for the Petitioner, was that the proceedings are barred by

limitation. In this regard, he placed heavy reliance on the decision of the

Hon'ble Supreme Court in Commissioner of Income-tax-III V/S

Calcutta Knitwears [(2014) 362 ITR 673 (SC)]. He submitted

that the Hon'ble Supreme Court has categorically held that the

satisfaction note must be recorded "immediately" after the completion

of the assessment proceedings of the searched person. He pointed out

that the search which forms the basis of the present proceeding, was

concluded in February 2021. The time limit for completion of

assessment of the searched person expired on 31 st March 2023. It is not

disputed that assessment of the searched party was concluded by such

date. However, the satisfaction note by the Assessing Officer of the

searched person was recorded only on 27th June 2024, i.e., after a delay

of approximately 15 months from the conclusion of the assessment of

the searched person. He further submitted that the satisfaction note of

the Assessing Officer of the Petitioner i.e., Respondent No.1, is undated.

He also relied upon the CBDT Circular No.24/2015 dated 31 st December

2015, which clarifies that the ratio of Calcutta Knitwears (supra)

applies to proceedings under Section 153C of the IT Act. To buttress his

argument regarding the meaning of "immediately", Mr. Gandhi relied

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upon the decision of the Delhi High Court in CIT V/S Bharat

Bhushan Jain [(2015) 370 ITR 695 (Delhi)] and the Gujarat High

Court in Pr. CIT V/S Jitendra H. Modi HUF [(2018) 403 ITR

110 (Gujarat)], wherein delays of 9 to 15 months were held to be fatal.

6. On the second issue, Mr. Gandhi submitted that the

satisfaction note provided to the Petitioner does not bear a DIN. He

relied upon the CBDT Circular No. 19/2019 dated 14 th August 2019 and

the decision of this Court in Ashok Commercial Enterprises V/S

Assistant Commissioner of Income Taxation [(2023) 459 ITR

100 (Bombay)] and Sanjay Nathalal Shah V/S Assistant

Commissioner of Income Tax [(2026) 182 taxmann.com 847

(Bombay)] to contend that any communication, including a

satisfaction note, issued without a DIN is non-est in law. For all these

reasons, Mr. Gandhi submitted that the notice dated 30 th March 2025

[issued under Section 153C] ought to be quashed and set aside.

7. Per contra, Mr. Ranganayakulu, the learned Counsel for the

Respondents, opposed the Petition. Regarding the issue of limitation, he

referred to the affidavit-in-reply and submitted that the notice was

issued within a reasonable time, which is what the Hon'ble Supreme

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Court has laid down in the case of Calcutta Knitwears (supra). He

contended that the volume of data seized was massive, requiring time

for analysis, and therefore, the delay should be condoned. He submitted

that a reasonable window should be given to the Department to record

satisfaction and that the words "immediately thereafter" should not be

strictly construed.

8. On the issue of DIN, Mr. Ranganayakulu relied upon a

decision of the Gujarat High Court in Rameshkumar Tulsidas

Kaneriya V/S Asstt. CIT [(2025) 477 ITR 358 (Guj)] to contend

that a satisfaction note is an internal document and does not require a

DIN. He submitted that the Circular is very clear that internal

communications would not require a DIN.

9. In rejoinder, Mr. Gandhi pointed out that this Court in

Sanjay Nathalal Shah (supra) has already considered and distinguished

the said decision of the Gujarat High Court in Rameshkumar Tulsidas

Kaneriya (supra), holding that the binding Circular of the CBDT and

the law laid down by this Court in Ashok Commercial Enterprises

(supra) must prevail.

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10. We have considered the rival submissions and perused the

papers available on record. The first issue is whether the satisfaction

note was recorded within the time frame contemplated by law. The

Hon'ble Supreme Court in Calcutta Knitwears (supra) has laid down

the law regarding the stage at which satisfaction must be recorded.

Paragraph 44 of the said judgment reads as under:-

"44. In the result, we hold that for the purpose of Section 158BD of the Act, a satisfaction note is sine qua non and must be prepared by the assessing officer before he transmits the records to the other assessing officer who has jurisdiction over such other person. The satisfaction note could be prepared at either of the following stages:(a) at the time of or along with the initiation of proceedings against the searched person under section 158BC of the Act; (b) along with the assessment proceedings under section 158BC of the Act; and (c) immediately after the assessment proceedings are completed under section 158BC of the Act of the searched person."

(emphasis supplied)

11. It is pertinent to note that the Hon'ble Supreme Court was

dealing with the issue whether a satisfaction note can be recorded after

the assessment of the searched party is completed. While answering in

the affirmative, the Court added a crucial qualifier, namely, it must be

done "immediately" thereafter. The term "immediately" implies a

sense of urgency and proximity in time and is often understood to be as

soon as possible or without delay. Therefore, the Respondents are not

correct when they say that the satisfaction has to be recorded within a

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"reasonable time". The Supreme Court has consciously used the term

"immediately" and due meaning should be given to the said term.

12. The CBDT Circular No.24/2015 dated 31 st December 2015

explicitly states that the guidelines of the Hon'ble Supreme Court in

Calcutta Knitwears (supra) apply to proceedings under Section 153C of

the IT Act. Therefore, the Assessing Officer of the searched person was

required to record satisfaction, at the latest, immediately after the

completion of the assessment of the searched person. We find support

in the decision of the Delhi High Court in Bharat Bhushan Jain

(Supra), where a delay of 10 months was held to be fatal. Similarly, the

Gujarat High Court in Jitendra H. Modi HUF (Supra) held that a period

of 9 months could not be termed as "immediate". In Parag

Rameshbhai Gathani V/S ITO [(2025) 180 taxmann.com 662

(Gujarat)], a delay of 22 months was held to be inordinate.

13. In the present case, the search was conducted in February

2021. The limitation for completing the assessment of the searched

person (Shri Sandeep Arora) expired on 31st March 2023. It is

undisputed that the assessment of the searched party was completed

before such date. The satisfaction note was recorded on 27 th June 2024.

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Hence, there is a delay of approximately 15 months from the last date

for assessment of the searched person. Furthermore, the satisfaction

note of the Assessing Officer of the Petitioner is undated, which further

casts doubt on the timeline of events. Regarding this objection raised in

the Petition, the Reply Affidavit merely states that not writing of a date

on the satisfaction note by Respondent No.1 is a procedural irregularity.

Moreover, the notice under section 153C is issued after a gap of about 2

years. We are of the considered view that a delay of 15 months cannot be

construed as "immediately" after the assessment proceedings. The

argument of the Respondents that the volume of data seized was

massive, requiring time for analysis, and therefore, the delay should be

condoned cannot be accepted. The Assessing Officer has been granted

sufficient time by the Hon'ble Supreme Court that he can record

satisfaction either at the time of, or along with the initiation of

proceedings against the searched person, or along with the assessment

proceedings, or immediately after the assessment proceedings are

completed of the searched person. Further, this is also clarified by the

Circular No.24/2015 issued by the Board itself. Accordingly, we hold

that the proceedings are barred by limitation.

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14. The second issue pertains to the absence of DIN on the

satisfaction note. This issue is no longer res integra insofar as this Court

is concerned. In Ashok Commercial Enterprises (Supra), this Court

held as under:-

"18(d) The said Circular also applies to the satisfaction note dated 13th July 2021 issued by respondent no. 1. The satisfaction note will fall within the scope of paragraph 2 of the Circular as a communication of the specified type issued to any person. Therefore, the satisfaction note dated 13th July 2021 and the impugned order of assessment dated 28th September 2021 ought to be treated as invalid and deemed never to have been issued."

15. The Respondents' reliance on the Gujarat High Court

decision in Rameshkumar Tulsidas Kaneriya (supra) is misplaced. This

Court in Sanjay Nathalal Shah (Supra) has specifically dealt with and

distinguished the said decision. Paragraph 12 of Sanjay Nathalal Shah

(supra) states thus:-

"12. Coming to the decision of the Gujarat High Court in the case of Rameshkumar Tulsidas Kaneriya (supra) as relied upon by the Respondent, we find that firstly, the said decision is in the context of a satisfaction note and not a case of a mandatory approval or sanction. Therefore, the same is distinguishable on this ground alone. Circular No.19/2019 specifically includes approval as a correspondence. Secondly, it has been held by the Gujarat High Court that the satisfaction note is an internal communication which does not fall within the meaning of the word "communication" as contemplated in Circular No.19/2019 (supra). This finding of the Court is contrary to the findings given by this Court and those of the Madras High Court. We are therefore bound by the decision

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of this Court in this regard, which has categorically held that internal communications are considered as "any other correspondence" to "any other person". Lastly, the Gujarat High Court has held that such a satisfaction note can be regularized by issuing the same with a DIN and the same would be a procedural aspect. We are afraid we cannot subscribe to the above findings for two reasons. Firstly, the regularization has to happen only in terms of Circular No.19/2019 and only in a case where the conditions of paragraph 3 are fulfilled. Secondly, we have held that not following Circular No.19/2019 cannot be simply termed as a procedural irregularity. Therefore, the decision in the case of the Gujarat High Court would not assist the case of the Revenue. Further, it is fairly settled that dismissal of SLP in limine would not amount to merger of the order of the High Court with that of the Supreme Court. If at all any support is required for this proposition, then reference can be made to the decision of the Hon'ble Supreme Court in the case of Kunhayammed v. State of Kerala [(2000) 113 Taxman 470/245 ITR 360 (SC)]."

16. Consequently, the satisfaction note, being without a DIN, is

treated as invalid and deemed to have never been issued as per CBDT

Circular No.19/2019.

17. In view of the above findings on limitation, as well as the

absence of a DIN, the impugned notice and the consequential

proceedings cannot be sustained. The Writ Petition accordingly is

allowed in terms of prayer clause (a), which reads thus:-

"(a) that this Hon'ble Court may be pleased to issue a Writ of Certiorari or a Writ in the nature of Certiorari or any other appropriate Writ, Order or direction, calling for the records

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of the Petitioner's case and after going into the legality and propriety thereof, to quash and set aside the said notice u/s 153C of the Act dated 30.03.2025 ("Exhibit B") the satisfaction notes ("Exhibit C") and the subsequent proceeding."

18. Since, we have allowed the Petition on the aforesaid two

aspects, we leave the other contentions of the Petitioner open.

19. Rule is made absolute in the aforesaid terms, and the Writ

Petition is also disposed of in terms thereof. However, there shall be no

order as to costs.

20. This order will be digitally signed by the Private Secretary/

Personal Assistant of this Court. All concerned will act on production by

fax or email of a digitally signed copy of this order.

[FIRDOSH P. POONIWALLA, J.] [B. P. COLABAWALLA, J.]

FEBRUARY 17, 2026 Utkarsh