Meaningful consideration of assessee replies is essential before Section 148A reopening; insufficient review can vitiate the notice.

An order under Section 148A and the consequential Section 148 notice was held unsustainable where the Assessing Officer failed to meaningfully consider the assessee's replies and supporting material before forming the opinion to reopen assessment. The Court noted that the responses dated 14 April 2025 and 19 June 2025 were not examined in full, and that limited reliance on partial bank statements and broad findings on circular fund movements and lack of commercial substance did not adequately address genuineness and creditworthiness. The impugned order and notice were quashed, and the matter was remitted for fresh consideration after hearing the assessee and passing a reasoned order.

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Issues: Whether the order passed under Section 148A(3) of the Income-tax Act, 1961 and the consequential notice under Section 148 of the Income-tax Act, 1961 were vitiated for non-consideration of the assessee's replies and supporting materials, and whether the matter required fresh consideration after hearing the assessee.

Analysis: The Court found, at least prima facie, that the Assessing Officer did not consider the replies dated 14 April 2025 and 19 June 2025 in their entirety and dealt only with limited aspects such as partial bank statements. It held that a valid formation of opinion under Section 148A requires meaningful consideration of the assessee's response and materials before deciding whether notice under Section 148 should issue. On the facts, the findings on circular movements of funds and lack of commercial substance were treated as insufficiently reasoned for sustaining the impugned order without examining genuineness and creditworthiness more fully.

Conclusion: The impugned order and consequential notice were quashed, and the Assessing Officer was directed to reconsider the matter afresh after affording an opportunity of hearing and passing a reasoned order in accordance with law.

Ratio Decidendi: An order under Section 148A is unsustainable where the Assessing Officer fails to consider the assessee's reply and supporting material in a meaningful manner before forming the opinion to issue notice under Section 148.

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