No section 271(1)(c) penalty on non-existing or deleted disallowances

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 Commission...