Allowing the petition, the Court held  that the Assessing Officer was bound to indicate reasons for determining the deduction of tax at 0.80 per cent. instead of 0.35 per cent. The Assessing Officer does not possess an unguided discretion to decide the rate of deduction of tax at source as he thinks fit. He is bound to furnish reasons which would demonstrate application of mind by him in the circumstances. The matter was remanded to the Assessing Officer for de novo consideration. Before disposing of the application under section 197 he should grant a personal hearing to the assessee and thereafter pass a reasoned order.