Bona fide non-disclosure of foreign bank deposits did not justify penalty where income was disclosed and tax was paid.

Penalty for non-disclosure of foreign bank deposits and assets was held unsustainable where the deposits arose from past overseas earnings, the related interest income had been disclosed in India and tax was paid. The return form for the relevant year did not contain a specific column requiring disclosure of such foreign assets, and the form was later amended to add that requirement. On these facts, the omission was treated as a bona fide mistake rather than deliberate concealment of offshore income or black money, so penalty under Section 43 was deleted.

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Issues: Whether penalty under Section 43 of the Black Money (Undisclosed Foreign Income & Assets) and Imposition of Tax Act, 2015 was sustainable for non-disclosure of foreign bank deposits and assets in the return of income.

Analysis: The assessee had foreign bank deposits from past earnings abroad, the interest income from such deposits was disclosed in India, and due tax was paid thereon. The return form for the relevant assessment year did not contain a specific column or note requiring disclosure of such foreign assets, and the form was later amended to incorporate such a requirement. On these facts, the non-disclosure was treated as a bona fide mistake rather than a case of concealment of offshore income or assets created out of black money. The facts did not indicate deliberate suppression with a view to avoid Indian tax liability.

Conclusion: Penalty under Section 43 was not justified and was deleted in favour of the assessee.

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