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[2009] 184 Taxman 269 (Bombay)/[2010] 323 ITR 302 (Bombay) [2009] 184 TAXMAN 269 (BOM.) HIGH COURT OF BOMBAY Indus Engineering Co. v. Assistant Commissioner of Income-tax (Investigation), Circle 17(1) J.H. BHATIA AND F.I. REBELLO, JJ. WRIT PETITION NO. 539 OF 1993 APRIL 13, 2009 Section 271(1)(c) of the Income-tax Act, 1961 - Penalty - For concealment of income - Assessment year 1985-86 - Assessee had filed return of income for relevant assessment year - Thereafter, a search was conducted at its office and factory premises, in course of which assessee admitted havala loans of certain amount pertaining to relevant assessment year - Assessing Officer taxed said amount as assessee's income of relevant assessment year - On appeal, Commissioner (Appeals) upheld order of Assessing Officer - In meanwhile, Assessing Officer also imposed penalty under section 271(1)(c) upon assessee - Assessee contended that as it had offered loans as other income voluntarily under section 132(4), there was no concealment of income and, therefore, penalty should be waived - Whether since assessee had not disclosed loans in question either in original return or in revised return, and said transactions were disclosed only in course of search, it was a clear case of concealment of income and, therefore, imposition of penalty upon assessee was justified - Held, yes [ FACTS The assessee had filed its return of income for the relevant assessment year. Thereafter, during a search conducted at its office and factory premises, it admitted havala loans of certain amount which pertained to the relevant assessment year. The Assessing Officer taxed the same as income of the relevant assessment year along with interest claimed by the assessee on those loans. On appeal, the Commissioner (Appeals) confirmed the addition. In the meanwhile, the Assessing Officer also imposed the penalty under section 271(1)(c) upon the assessee. The assessee moved an application under section 264 before the Commissioner contending that as it had offered the loans as other income voluntarily under section 132(4), there was no concealment of income and, therefore, penalty should be waived. The Commissioner held that since…

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