HARMAN CONNECTED SERVICES vs. ASSISTANT/DEPUTY COMMISSIONER OF INCOME TAX

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WP/18395/2024HC KarnatakaKAHC01038331202411 September 2024Bench: S.R.KRISHNA KUMAR6 pages
AI SummaryAllowed

What did the High Court hold?

The High Court allowed the petition. The Court noted that during the pendency of the writ petition, the Assessing Officer had issued fresh notices under Section 148A(b) to the petitioner-company, this time correctly reflecting the petitioner's PAN. This action led to the "unmistakable conclusion" that the earlier proceedings, which culminated in the impugned order and notice dated March 31, 2024, issued under the old, incorrect PAN number, would not survive. Consequently, the Court quashed the impugned order passed under Section 148A(d) and the notice issued under Section 148, both dated March 31, 2024. The ratio decidendi is that proceedings initiated with demonstrably incorrect identifying information, especially when subsequently rectified by the authority itself, are unsustainable and liable to be quashed. No specific issue was left undecided.

What were the facts?

The petitioner, Harman Connected Services Corporation India Pvt. Ltd., underwent a merger with M/s. Harman Connected Services Technologies, approved in 2013. The merger was intimated to the jurisdictional Assessing Officer on December 6, 2018. The petitioner filed consolidated Income Tax Returns for Assessment Year 2018-19, including transactions of the erstwhile entity, which were selected for scrutiny assessment under Section 143(3). Subsequently, notices under Section 148A(b) were issued, initially to the erstwhile entity and later to the petitioner, but both incorrectly referenced the PAN of the erstwhile entity. The petitioner responded, highlighting the merger and incorrect PAN. Despite these submissions, the Assessing Officer passed an order under Section 148A(d) and issued a notice under Section 148 on March 31, 2024, which are now under challenge. During the pendency of the writ petition, fresh notices under Section 148A(b) were issued to the petitioner with the correct PAN.

What were the issues?

1. Whether the order dated 31/03/2024 passed by the 1st Respondent under Section 148A(d) of the Income Tax Act, 1961, rejecting the petitioner's objections to the initiation of assessment proceedings for Assessment Year 2018-19, is liable to be quashed? 2. Whether the notice dated 31/03/2024 issued by the 1st Respondent under Section 148 of the Income Tax Act, 1961, for Assessment Year 2018-19, is liable to be quashed? Assessee's Contentions: The petitioner argued that the notices and the subsequent order under Section 148A(d) were erroneous as they were issued with the incorrect PAN number pertaining to the erstwhile merged entity, Harman Technologies, and not the petitioner company. The petitioner had duly informed the revenue about the merger and provided its correct PAN. The petitioner contended that all further proceedings based on the incorrect PAN should be dropped. Revenue's Contentions: The judgment does not record specific contentions from the revenue. However, the issuance of the impugned order and notice suggests the revenue proceeded with the assessment based on the information available to them at that time, despite the petitioner's objections.

Which sections of the Income-tax Act were involved?

Section 148A,Section 148,Section 143(3)

AI-generated summary — verify with the full judgment below

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NC: 2024:KHC:37198 WP No. 18395 of 2024

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 11TH DAY OF SEPTEMBER, 2024 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 18395 OF 2024 (T-IT) BETWEEN:

HARMAN CONNECTED SERVICES CORPORATION INDIA PVT. LTD., 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, BENGALURU 560 066. REPRESENTED HEREIN BY ITS DIREDTOR MR VIVEK KHEMKA. …PETITIONER (BY SRI. T SURYANARAYANA., SENIOR COUNSEL FOR SRI. TANMAYEE RAJKUMAR.,ADVOCATE)

AND:

1.

ASSISTANT/DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 3(1)(1), BMTC BUILDING, 6TH BLOCK, 80 FEET ROAD, KORAMANGALA, BANGALORE 560 095.

2.

INCOME TAX OFFICER WARD INTL TAXATION 1(1) BLR BMTC BUILDING, 6TH BLOCK, 80 FEET ROAD, KORAMANGALA, BANGALORE 560 095.

3.

CHIEF COMMISSIONER OF INCOME TAX 1 BMTC BUILDING, 6TH BLOCK, 80 FEET ROAD, KORAMANGALA, BANGALORE 560 095. …RESPONDENTS (BY SRI.THIRUMALA M.,ADVOCATE)

Digitally signed by LEELAVATHI S R Location: HIGH COURT OF KARNATAKA

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NC: 2024:KHC:37198 WP No. 18395 of 2024

THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA, PRAYING TO A) QUASH THE ORDER DATED 31/03/2024 BEARING NO. ITBA/AST/F/148A/2023- 24/1063772974(1) (ANNEXURE-P) PASSED BY THE R1 UNDER SECTION 148A(d) OF THE ACT, REJECTING THE PETITIONERS OBJECTIONS AS TO THE INITIATION OF THE ASSESSMENT PROCEEDINGS FOR THE ASSESSMENT YEAR 2018-19 AND B) QUASH THE NOTICE DATED 31/03/2024 BEARING ITBA/AST/S/148.1/2023-24/1063779395(1) (ANNEXURE-Q) ISSUED BY THE R1 UNDER SECTION 148 OF THE ACT FOR THE ASSESSMENT YEAR 2018-19.

THIS WRIT PETITION, COMING ON FOR ORDERS THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

CORAM: HON'BLE MR JUSTICE S.R.KRISHNA KUMAR

ORAL ORDER

In this Petition, Petitioner seeks the following reliefs:

a) Quashing the order dated 31/03/2024 bearing No. ITBA/AST/F/148A/2023-24/1063772974(1) (Annexure-P) passed by the 1st Respondent under Section 148A(d) of the Act, rejecting the Petitioner’s objections as to the initiation of the assessment proceedings for the assessment year 2018-19;

b) Quashing the notice dated 31/03/2024 bearing ITBA/AST/S/148.1/2023-24/1063779395(1) (Annexure-Q) issued by the 1st Respondent under Section 148 of the Act for the assessment year 2018-19; and

c) Pass such other or further orders as this Hon’ble Court may deem fit in the facts and circumstances of the case, in the interests of justice and equity.”.

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NC: 2024:KHC:37198 WP No. 18395 of 2024

2.

A perusal of the material on record will indicate that the merger of M/s. Harman Connected services Technologies (Harman Technologies) with the Petitioner - Company i.e., M/s. Harman Connected Services Corporation India Pvt. Ltd., was approved by the Regional Director, Ministry or Corporate Affairs vide order dated 13.11.2013 and the jurisdictional Assessing Officer of Harman Technologies was intimated of the said merger on 06.12.2018. In pursuance of the same, the Petitioner filed consolidated Income Tax Returns for the Assessment Year 2018- 19 where all the transactions of the erstwhile M/s. Harman Technologies were also reflected. The said Returns filed by the Petitioner including the transactions of the erstwhile Harman Technologies was selected for complete scrutiny assessment under Section 143(3) of the Income Tax Act, 1961 vide Assessment Order dated 29.10.2021. Subsequently, the Respondents issued a Notice under section 148A(b) of the Income Tax Act, 1961 dated 14.03.2022 to the erstwhile Harman Technologies, to which the Petitioner submitted a response on 22.03.2022. In the reply, the Petitioner – Company stated that the erstwhile Harman Technologies had got merged with the Petitioner Company and the PAN Number indicated on Harman Technologies

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NC: 2024:KHC:37198 WP No. 18395 of 2024

was not applicable to the Petitioner Company. Thereafter, the Respondent issued one more Section 148A(b) Notice addressed to the Petitioner Company on 05.02.2024 wherein, the earlier Pan Number of the erstwhile Harman Technologies was shown while issuing the same. The Petitioner submitted its detailed responses on 13.02.2024, 28.02.2024 & 06.03.2024 subsequently contending that the PAN Number shown in the Sectio148A(b) Notice was in relation to the erstwhile Harman Technologies and not the PAN Number of the Petitioner-Company and contended that all further proceedings deserved to be dropped.

3.

It is the grievance of the Petitioner that despite the aforesaid facts and circumstances, the first Respondent proceeded to pass the impugned order under section 148A(d) dated 31.03.2024 followed by a Notice dated 31.03.2024 under Section 148 A of Income Tax Act, aggrieved by which, the Petitioner is before this Court by way of the present petition.

4.

Today, a Memo dated 11.09.2024 is filed along with the following documents: i) “Copy of the notice dated 08.08.2024 issued by the 1st Respondent under Sectioon148A(b) of the Income Tax Act, 1961(“the Act”).

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NC: 2024:KHC:37198 WP No. 18395 of 2024

ii) Copy of the notice dated 09.08.2024 issued by the 1st Respondent under Section 148A(b) of the Act. iii) Copy of the submissions dated 19.08.2024 filed by the Petitioner. iv) Copy of the order dated 30.08.2024 passed by the 1st Respondent under Section 148A(d) of the Act. v) Copy of the notice dated 30.08.2024 issued by the 1st respondent under Section 148 of the Act.”

5.

A perusal of the aforesaid documents will indicate that during the pendency of the present Petition, the 1st Respondent has initiated proceedings against the Petitioner-Company showing the correct PAN Number of the Petitioner-Company in respect of the same which leads to unmistakable conclusion that the earlier proceedings culminated in the impugned order in relation to the Petitioner-Company under the old PAN Number would not survive and the same deserves to be quashed.

6.

In the result, I pass the following:-

ORDER i) Petition is hereby allowed. ii) The Impugned order at Annexure-P bearing No. ITBA/AST/F/148A/2023-24/1063772974(1) and Annexure – Q bearing No. ITBA/AST/S/148.1/2023-

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NC: 2024:KHC:37198 WP No. 18395 of 2024

24/1063779395(1), both dated 31.03.2024 are hereby quashed.

Sd/- (S.R.KRISHNA KUMAR) JUDGE Bsv List No.: 1 Sl No.: 27

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