HARMAN CONNECTED SERVICES CORPORATION INDIA PVT. LTD., vs. INCOME TAX OFFICER, WARD 6(1) (1)

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WP/17450/2024HC KarnatakaKAHC01036744202409 July 2024Bench: S SUNIL DUTT YADAV6 pages
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What did the High Court hold?

The High Court held that the notice issued under Section 148A(b) of the Income Tax Act, 1961, to M/s. Symphony Services Pune Pvt. Ltd. on 14.03.2024 was without jurisdiction. The Court noted that the factum of the merger of Symphony Services Pune Pvt. Ltd. with the petitioner, effective from 01.04.2008, had been brought to the Income Tax Officer's notice in 2011. Following the principle laid down by the Apex Court in Principal Commissioner of Income Tax, New Delhi v. Maruti Suzuki India Ltd., a notice to a non-existent entity is considered one without jurisdiction. Consequently, the notice at Annexure-'E' was set aside. As a result, all consequential proceedings, including the order under Section 148A(d) at Annexure-'G' and the notice under Section 148 at Annexure-'H', were also set aside as they were based on proceedings initiated against a non-existent entity. The Court found these proceedings legally unsustainable.

What were the facts?

The petitioner, Harman Connected Services Corporation India Pvt. Ltd. (representing the merged entity Symphony Services Pune Private Limited), filed a writ petition challenging an order dated 29/03/2024 passed by the Deputy Commissioner of Income Tax under Section 148A(d) of the Income Tax Act, 1961. This order rejected the petitioner's objections to the initiation of reassessment proceedings for Assessment Year 2017-18. The petitioner argued that Symphony Services Pune Private Limited had merged with Harman Connected Services Corporation India Pvt. Ltd. effective 01.04.2008, as approved by the High Court of Bombay. This merger was communicated to the Income Tax Officer in 2011. Despite this, a notice under Section 148A(b) was issued on 14.03.2024 to the non-existent entity, Symphony Services Pune Pvt. Ltd.

What were the issues?

1. Whether the notice issued under Section 148A(b) of the Income Tax Act, 1961, to a non-existent entity, following a scheme of amalgamation approved by the High Court, is without jurisdiction and void? Assessee's Contention: The assessee argued that the notice issued to Symphony Services Pune Pvt. Ltd. was null and void and without jurisdiction because the entity had merged with the petitioner in 2008, and this fact was brought to the Income Tax Officer's notice in 2011. They relied on the Supreme Court case of Principal Commissioner of Income Tax, New Delhi v. Maruti Suzuki India Ltd. (2019). Revenue's Contention: The judgment does not record any specific contentions from the revenue.

Which sections of the Income-tax Act were involved?

Section 148A,Section 148A(d),Section 148

AI-generated summary — verify with the full judgment below

Before: SMT. TANMAYEE RAJKUMAR, ADVOCATE)

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NC: 2024:KHC:26178 WP No. 17450 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 9TH DAY OF JULY, 2024 BEFORE THE HON'BLE MR JUSTICE S SUNIL DUTT YADAV WRIT PETITION NO. 17450 OF 2024 (T-IT) BETWEEN: HARMAN CONNECTED SERVICES CORPORATION INDIA PVT. LTD., (FOR THE MERGED ENTITY SYMPHONY SERVICES PUNE PRIVATE LIMITED) A COMPANY INCORPORATED UNDER THE COMPANIES ACT 1956, HAVING ITS REGISTERED OFFICE AT NO.3 AND 3A, EOIZ INDUSTRIAL AREA, SURVEY NOS. 85 AND 86, SADARAMANGALA VILLAGE, KRISHNARAJAPURAM HOBLI, WHITEFIELD S.O., RAMAGONDANHALLI, BENGALURU - 560 066, REPRESENTED HEREIN BY ITS DIRECTOR MR. VIVEK KHEMKA. …PETITIONER (BY SRI. T. SURYANARAYANA, SENIOR ADVOCATE FOR SMT. TANMAYEE RAJKUMAR, ADVOCATE) AND: 1. INCOME TAX OFFICER, WARD 6(1) (1), BMTC BUILDING, 6TH BLOCK, 80 FEET ROAD, KORAMANGALA, BANGALORE - 560 095. Digitally signed by YAMUNA K L Location: High Court of Karnataka

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NC: 2024:KHC:26178 WP No. 17450 of 2024 2. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 3(1)(1), BMTC BUILDING, 6TH BLOCK, 80 FEET ROAD, KORAMANGALA, BANGALORE - 560 095. 3. THE CHIEF COMMISSIONER OF INCOME TAX 3, BMTC BUILDING, 6TH BLOCK, 80 FEET ROAD, KORAMANGALA, BANGALORE - 560 095. …RESPONDENTS (BY SRI. M. DILIP, JR. STANDING COUNSEL)

THIS WP IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER DATED 29/03/2024 BEARING NO. ITBA/AST/F/148A/2023- 24/1063636083(1) (ANNEXURE-G) PASSED BY THE R2 UNDER SECTION 148A(d) OF THE ACT, REJECTING THE PETITIONERS OBJECTIONS AS TO THE INITIATION OF THE ASSESSMENT PROCEEDINGS FOR THE ASSESSMENT YEAR 2017-18 AND ETC.,

THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, THE COURT MADE THE FOLLOWING: ORDER The petitioner - Harman Connected Services Corporation India Pvt. Ltd., has called in question the correctness of the order under Section 148A(d) of the Income Tax Act, 1961 (for short 'the Act') at Annexure-'G' as well as the notice under Section 148 of the Act at Annexure-'H' and the notice under Section 148A(b) of the Act at Annexure-'E'.

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NC: 2024:KHC:26178 WP No. 17450 of 2024

2.

Learned Senior Counsel Sri. T. Suryanarayana appearing for the petitioner would submit that the petitioner was an entity that was formed after the scheme of amalgamation which was approved by the orders of the High Court of Bombay, whereby the merger of Symphony Services Pune Private Limited into M/s. Harman Connected Services Corporation India Pvt. Ltd., was ordered with effect from 01.04.2008.

3.

It is further submitted that this aspect of merger of Symphony Services Pune Pvt. Ltd., with the petitioner was brought to the notice of the authority in terms of the representation on 25.02.2011. Copy of the said intimation is produced at Annexure-'A'. It is submitted that despite such communication being addressed to the Income Tax Officer in the year 2011, notice is issued at Annexure-'E' under Section 148A(b) of the Act to M/s. Symphony Services Pune Pvt. Ltd. on 14.03.2024. It is submitted that the notice to a non-existing entity would be null and void and without jurisdiction and reliance is

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NC: 2024:KHC:26178 WP No. 17450 of 2024 placed on the order of the Apex Court in the case of Principal Commissioner of Income Tax, New Delhi v. Maruti Suzuki India Ltd., reported in (2019) 107 Taxmann.com 375 (SC).

4.

Perused the notice at Annexure-'E', same is issued to M/s. Symphony Services Pune Pvt. Ltd. The factum of merger of Symphony Services Pune Pvt. Ltd., with the petitioner has been brought to the notice of the Income Tax Officer in terms of the representation at Annexure-'A'. It is specifically averred in the said representation that M/s. Symphony Services Pune Pvt. Ltd., had merged with the petitioner with effect from 01.04.2008 by virtue of scheme of amalgamation being sanctioned by the High Court of Mumbai. If that were to be so, the question of initiating proceedings of reassessment by notice to Symphony Services Pune Pvt. Ltd., on 14.03.2024 would not arise.

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NC: 2024:KHC:26178 WP No. 17450 of 2024

5.

The Apex Court in the case of Principal Commissioner of Income Tax, New Delhi v. Maruti Suzuki India Ltd., had clarified that the notice to a non- existing entity would be one without jurisdiction. Clearly once the authorities record the change of entity by a merger, the notice to Symphony Services Pune Pvt. Ltd., on 14.03.2024 could not have been issued. 6. On the ground that notice being issued to a non-existing entity is one without jurisdiction, notice at Annexure-'E' is set aside. The consequential proceedings including the order under Section 148A(d) of the Act at Annexure-'G' is set aside so also the notice under Section 148 of the Act at Annexure-'H' is set aside. Once Annexure-'E' is set aside, all such proceedings that are consequent to the notice at Annexure-'E' are liable to be set aside. 7. It is also noticed that the proceedings at Annexures-'G', 'H' and 'E' are also as regards the return of

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NC: 2024:KHC:26178 WP No. 17450 of 2024 income of Symphony Services Pune Pvt. Ltd., which is a non-existing entity as on the date of issuance of notice, which are not legally sustainable. 8. Accordingly, petition is disposed off. Sd/- JUDGE MCR

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