Reasoned Determination Requirement: AO must record reasons and grant a hearing before fixing Section 194-O deduction rate.

Assessing Officer must record reasons and apply mind when fixing the deduction rate under the assessed provision; an unguided selection of a rate without explanation is impermissible. The impugned orders were quashed and remitted for de novo consideration with directions that the AO grant a personal hearing (notice at least five working days) and pass a reasoned order addressing all submissions within six weeks of upload.

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Issues: (i) Whether the Assessing Officer was obliged to record reasons and apply mind when fixing the rate of deduction at 0.80% instead of 0.35% under Section 194-O and whether the impugned orders should be quashed and the matter remitted for fresh consideration.

Analysis: The Court examined the impugned orders and found that the Assessing Officer fixed the deduction rate at 0.80% without providing any explanation or reasons demonstrating an application of mind as to why the lower rate of 0.35% sought by the applicant was not accepted. The Court held that the Assessing Officer does not possess an unguided discretion to choose a figure without recording reasons. The Court directed that on remand the Assessing Officer must grant a personal hearing (with notice at least five working days in advance) and pass a reasoned order addressing all submissions of the applicant within a specified timeframe.

Conclusion: The impugned orders are quashed and set aside and the matter is remanded for de-novo consideration; the Assessing Officer must grant a personal hearing and pass a reasoned order dealing with all submissions within six weeks of upload.

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