Case Law Details
ACIT Vs Johnson Matthey India Pvt. Ltd. (ITAT Delhi)
Introduction: The Income Tax Appellate Tribunal (ITAT) Delhi recently passed a significant judgment in the case of ACIT vs. Johnson Matthey India Pvt. Ltd. This judgment addresses the imposition of penalties under section 271(1)(c) of the Income Tax Act in cases where disallowances have been deleted or do not exist. The ITAT Delhi ruled that penalties cannot be imposed based on non-existing or deleted disallowances, providing clarity on this issue.
Detailed Analysis
1. Background: The case involved appeals against the order of the Commissioner of Income Tax (Appeals) for assessment years 2009-10 and 2011-12 to 2013-14. While the issues in these appeals were similar, the ITAT chose the assessment year 2011-12 as the lead case for convenience.
2. Grounds Raised by Revenue: The revenue raised several grounds challenging the deletion of penalties under section 271(1)(c) of the Income Tax Act. These penalties were imposed on various additions and disallowances, including payments made under cost-sharing arrangements, sales commission, and foreign travel expenses.
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