Bona fide non-disclosure of foreign bank accounts did not justify penalty where primary holder disclosure and supporting records were already on record.

Penalty for non-disclosure of foreign bank accounts was held unsustainable where the accounts and related income had already been disclosed in the husband's returns, the assessee later reflected them in her updated return, and she produced bank statements, source details, and supporting returns during penalty proceedings. The lapse was treated as inadvertent and based on a bona fide belief, not wilful concealment. As the revenue did not rebut the explanation or establish that the assessee was the actual beneficial owner of the assets or income, the penalty provision was not applied. The penalty was deleted.

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Issues: Whether penalty under section 43 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 was sustainable for non-disclosure of foreign bank accounts where the assessee claimed joint holding, disclosure by the primary holder, and bona fide lapse.

Analysis: The foreign bank accounts were found to have been disclosed in the husband's returns along with the related income, and the assessee furnished bank statements, source details, and supporting returns during the penalty proceedings. The record showed that the assessee later disclosed the accounts in her updated return as well. On these facts, the lapse in the assessee's return was treated as inadvertent and arising from bona fide belief rather than willful concealment. It was also noted that the revenue did not rebut the explanation or establish that the assessee was the actual beneficial owner of the assets or income. Applying the principle that penalty discretion must be exercised judiciously and that a technical or venial breach grounded in bona fide belief does not justify penal action, the earlier penalty orders were found unsustainable.

Conclusion: The penalty under section 43 was deleted and the issue was decided in favour of the assessee.

Ratio Decidendi: Penalty for non-disclosure of foreign assets is not warranted where the lapse is bona fide, the assets and income have been disclosed by the primary holder, and the revenue fails to establish deliberate concealment or actual beneficial ownership by the assessee.

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