Harman Connected Services Corporation India Private Limited V. Deputy Commissioner of Income Tax Circle 3(1)(1) and Income Tax Officer, Ward 6(1)(1) and Chief Commissioner of Income Tax 1

WP/18393/2024

AI Insights

The case involves Harman Connected Services Corporation India Pvt. Ltd., which challenged the validity of a notice and subsequent orders issued under the Income Tax Act, 1961, concerning the assessment year 2018-19. The petitioner argued that the notice was issued to Symphony Services Pune Pvt. Ltd., a company that had merged into Harman Connected Services and ceased to exist as a separate legal entity since April 1, 2008. The High Court, referencing a Supreme Court decision, found that issuing a notice to a non-existing entity was without jurisdiction and thus invalidated all related proceedings.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 796191 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 24-07-2024
• Assessment Year: misc
• Other Referred Cases: Principal Commissioner of Income Tax, New Delhi v. Maruti Suzuki India Ltd.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: M THIRUMALESH; M DILIP
• Assessee Lawyers: T SURYANARAYANA; TANMAYEE RAJKUMAR
• Keywords: Income Tax; Merger; Non-existing entity; Notice; Reassessment; Writ petition
• Section: 148; 148A(b); 148A(d)

Judgement Text

" - 1 - NC: 2024:KHC:29158 WP No. 18393 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 24TH DAY OF JULY, 2024 BEFORE THE HON'BLE MR JUSTICE S SUNIL DUTT YADAV WRIT PETITION NO. 18393 OF 2024 (T-IT) BETWEEN: HARMAN CONNECTED SERVICES CORPORATION INDIA PRIVATE LIMITED (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. DEPUTY COMMISISONER OF INCOME TAX CIRCLE 3(1)(1), BMTC BUILDING, 6TH BLOCK, 80 FEET ROAD, KORAMANGALA, BANGALORE - 560 095. Digitally signed by VIJAYA P Location: HIGH COURT OF KARNATAKA - 2 - NC: 2024:KHC:29158 WP No. 18393 of 2024 2. INCOME TAX OFFICER, WARD 6(1)(1), BMTC BUILDING, 6TH BLOCK, 80 FEET ROAD, KORAMANGALA, BANGALORE - 560 095. 3. THE CHIEF COMMISSIONER OF INCOME TAX 1, BMTC BUILDING, 6TH BLOCK, 80 FEET ROAD, KORAMANGALA, BANGALORE - 560 095. …RESPONDENTS (BY SRI. M.THIRUMALESH, ADVOCATE FOR R1; SRI. M.DILIP, JR. STANDING COUNSEL FOR R2 & R3) THIS WP IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO A) QUASH THE NOTICE DATED 31/01/2024 BEARING ITBA/AST/F/148A(SCN)/2023- 24/1060348209(1) (ANNEXURE-C) ISSUED BY THE R1 UNDER SECTION 148A(b) OF THE ACT, FOR THE ASSESSMENT YEAR 2018-19 AND ETC., THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE S SUNIL DUTT YADAV ORAL ORDER (PER: HON'BLE MR JUSTICE S SUNIL DUTT YADAV) The petitioner - Harman Connected Services Corporation India Pvt. Ltd., has called in question the correctness of the order under Section 148A(d) of the - 3 - NC: 2024:KHC:29158 WP No. 18393 of 2024 Income Tax Act, 1961 (for short 'the Act') at Annexure-'L' as well as the notice under Section 148 of the Act at Annexure-'M' and the notice under Section 148A(b) of the Act at Annexure-'C'. 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 - 4 - NC: 2024:KHC:29158 WP No. 18393 of 2024 Income Tax Officer in the year 2011, notice is issued at Annexure-'C' under Section 148A(b) of the Act to M/s. Symphony Services Pune Pvt. Ltd. on 31.01.2024. It is submitted that the notice to a non-existing entity would be null and void and without jurisdiction and reliance is 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-'C', 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 - 5 - NC: 2024:KHC:29158 WP No. 18393 of 2024 so, the question of initiating proceedings of reassessment by notice to Symphony Services Pune Pvt. Ltd., on 31.01.2024 would not arise. 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 31.01.2024 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-'C' is set aside. The consequential proceedings including the order under Section 148A(d) of the Act at Annexure-'L' is set aside so also the notice under Section 148 of the Act at Annexure-'M' is set aside. Once Annexure-'C' is set aside, all such proceedings that are - 6 - NC: 2024:KHC:29158 WP No. 18393 of 2024 consequent to the notice at Annexure-'C' are liable to be set aside. 7. It is also noticed that the proceedings at Annexures-'L', 'M' and 'C' as regards the return of income of Symphony Services Pune Pvt. Ltd., which is a non- existing entity as on the date of issuance of notice, are not legally sustainable and are set aside. 8. Accordingly, petition is disposed off. Sd/- (S SUNIL DUTT YADAV) JUDGE DHA "