Consideration of reply under reassessment procedure required before further action; impugned order and notice were set aside and remanded.

An assessee's reply to a Section 148A(b) notice must be considered before an order under Section 148A(d) and a Section 148 notice are issued; where the record shows the reply was received before the impugned action, the assumption that there was no response is unsustainable. On that basis, the Madras HC set aside the impugned order and notice and remanded the matter for fresh consideration after taking the reply on record and granting a personal hearing, subject to costs.

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Issues: Whether the order under Section 148A(d) and the notice under Section 148 of the Income-tax Act, 1961 were liable to be set aside because the assessee's reply to the Section 148A(b) notice was not considered.

Analysis: The reply was on record with an endorsement showing receipt after the stipulated time, but before the impugned order and notice were issued. The record showed that the impugned order proceeded on the basis that there was no response to the Section 148A(b) notice. In these circumstances, the reply was required to be considered before taking further action, and the matter warranted reconsideration with an opportunity to the assessee.

Conclusion: The impugned order and notice were set aside and the matter was remanded for fresh consideration after receiving the assessee's reply and granting a personal hearing, subject to payment of costs.

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