Requisite satisfaction must be recorded by AO of the person searched in order to assume jurisdiction u/s 158BD:

Appellant raised a technical ground before the Hon’ble ITAT that AO’s order was bad in law since there was no requisite satisfaction recorded in order to assume jurisdiction u/s 158BD. Hon’ble ITAT was of the view that requisite satisfaction must be recorded by AO of the person searched in order to assume jurisdiction u/s 158BD. If no such satisfaction is recorded by AO of the person searched, then no proceedings can be initiated u/s 158BD. It was observed that CIT(A) had not given such finding as to satisfaction by AO since no specific ground was raised by the appellant before him although the ground that AO’s order was bad in law and must be quashed was raised. Hence, the matter was restored to the file of CIT(A) for fresh decision with a direction that if proper jurisdiction is not assumed by AO, the assessment needs to be quashed and if proper jurisdiction has been assumed, then the issues must be decided on merits.

[Jaydeep Enterprises vs. ACIT – IT(SS)A No.37/Ahd/2005]