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Challenge to the validity of an order passed by the Commissioner of Income-tax under section 273A of the Income-tax Act regarding waiver of interest and penalties for late filing of returns by a partnership firm. Analysis: The petitioner, a partnership firm, filed returns for the assessment years 1978-79, 1979-80, 1980-81, and 1981-82 after the prescribed period, resulting in the levy of interest and penalties by the Income-tax Officer. Subsequently, the petitioner applied to the Commissioner under section 273A to waive the interest and penalties. The Commissioner granted partial relief by waiving the penalty for the assessment year 1978-79 but dismissed the application for the other years, citing that indulgence under section 273A can only be granted once and not for subsequent assessment years or multiple times for the same year. The Commissioner's decision was based on the interpretation of sub-section (3) of section 273A, which restricts the exercise of power to waive penalties to a single instance for a given person. The sub-sections (1) and (3) of section 273A empower the Commissioner to reduce or waive penalties or interest under certain conditions, subject to the Commissioner's discretion after considering all relevant facts and circumstances. Sub-section (3) clarifies that once an order is made under sub-section (1) in favor of a person, that person cannot seek relief under this section for any other assessment year thereafter. However, the power under sub-section (1) is not limited to a single assessment year but can be exercised for multiple years if the conditions are met. The Court disagreed with the Commissioner's interpretation of sub-section (3) and emphasized that the determination of good faith is a factual matter. The Court set aside the Commissioner's order in its entirety, directing a reconsideration of the application in accordance with the law. The Court clarified that the application should be evaluated based on the provisions of section 273A as applicable at the time of filing, without imposing any costs on the petitioner. In conclusion, the Court allowed the writ petition, overturned the Commissioner's decision, and instructed a fresh consideration of the application for waiver of interest and penalties, emphasizing a proper understanding and application of section 273A without any cost implications for the petitioner.
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