The Assessing Officer (AO) issued a notice under section 148A(b) of the Income-tax Act, 1961, on the ground that the assessee had not filed its return of income for AY 2016-17 and proposed reassessment based on a purported remittance to a non-resident or foreign company. The assessee contended that it had duly filed its return and disclosed the sale of shares leading to capital gains, which were claimed to be exempt under Article 13(4) of the India-Mauritius DTAA. The AO, in its final order under section 148A(d), denied the DTAA benefit, relying on an assessment order from AY 2014-15, which itself was under challenge in a separate writ petition. The Hon’ble Delhi High Court observed that the reassessment proceedings were initiated on a false premise since the assessee had in fact filed its return, and this was acknowledged. The court held that a reassessment action must be based on the reasons recorded in the original notice, and such reasons cannot be altered or supplemented at a later stage. The court further noted that the AO’s reliance on the prior year’s assessment was misplaced, as the matter was sub judice. The reassessment was therefore deemed invalid. Accordingly, the Hon’ble Delhi High Court quashed the reassessment proceedings, holding them unsustainable in law, but granted liberty to the tax authorities to initiate proceedings afresh if permissible under law. (AY. 2016-17)