Allowing the petition to quash the proceedings the Court held, that the Commissioner (Appeals) held in the appeal that the assessee was under the bona fide belief that there was no tax liability to be discharged by him on account of his residential status as non-resident external accounts and the deduction of tax at source made by the bank. Thus, the intention to conceal income by furnishing inaccurate particulars was not established. Therefore, the Assessing Officer was directed to delete the penalty imposed on the assessee.  Once the penalty is deleted, the prosecution initiated by the  could not be sustained.(AY.2008-09)