Bona fide misunderstanding defeats Black Money penalty for non-disclosure of foreign retirement-plan remittance.

Penalty under the Black Money Act was found unsustainable where the disputed credit represented a later remittance of past salary deductions made by a foreign employer toward a retirement plan, rather than income or a foreign asset earned in the relevant year. The assessee's explanation that foreign employment had ceased, there was no Indian income during the year, and the non-disclosure stemmed from a bona fide belief that no return was required was accepted. On those facts, the omission was treated as a genuine misunderstanding, not concealment of undisclosed foreign income or assets, and the penalty was deleted.

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Issues: Whether penalty under section 42 read with section 46 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 was leviable on the assessee for non-disclosure of an amount credited by a foreign employer from past salary deductions towards a retirement plan.

Analysis: The amount in question was found to be a later remittance arising out of past deductions from salary made by the foreign employer, and not income or a foreign asset earned during the relevant year. The assessee's explanation that he had ceased foreign employment, had no income earned in India during the year, and was under a bona fide belief that no return was required was accepted. On these facts, the case was treated as one involving a salaried employee acting under a bona fide misunderstanding rather than concealment of foreign income or asset.

Conclusion: The penalty was held to be unsustainable and was deleted, in favour of the assessee.

Final Conclusion: The appeal succeeded and the impugned penalty under the Black Money Act was set aside.

Ratio Decidendi: Penalty for non-disclosure is not warranted where the credited amount represents a remittance of past salary deductions from a foreign employer and the assessee's omission occurs under a bona fide belief without concealment of foreign income or assets.

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