Case Law Details
Harman Connected Services Corporation India Private Limited Vs DCIT (Karnataka High Court)
Karnataka High Court held that notice to a non-existing entity would be one without jurisdiction. Accordingly, notice issued u/s. 148A(b) of the Income Tax Act to the merged entity is liable to be set aside.
Facts- The petitioner – Harman Connected Services Corporation India Pvt. Ltd., has called in question the correctness of the order u/s. 148A(d) of the Income Tax Act, 1961 as well as the notice u/s. 148 of the Act and the notice u/s. 148A(b) of the Act.
It is submitted 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 Ltd., was ordered with effect from 01.04.2008.
It is submitted that inspite of communication of the merger, notice u/s. 148A(b) of the Act is issued to M/s. Symphony Services Pune Pvt. Ltd. on 31.01.2024.
Conclusion- 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 Ltd., on 31.01.2024 could not have been issued.
Held that that notice being issued to a non-existing entity is one without jurisdiction, notice is set aside. The consequential proceedings including the order under Section 148A(d) of the Act is set aside so also the notice under Section 148 of the Act is set aside.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
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-‘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 Ltd., was ordered with effect from 01.04.2008.
3. It is further submitted that this aspect of merger of Symphony Services Pune 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-‘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 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 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 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 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 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.
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