JUDGMENT B.P. Jeevan Reddy, C.J.
1. The petitioner-assessee is challenging the validity of an order passed by the Commissioner of Income-tax under Section 273A of the Income-tax Act. The petitioner is a partnership firm. It filed its returns for the four assessment years concerned herein, namely, 1978-79, 1979-80, 1980-81 and 1981-82, on October 25, 1979, March 31, 1982, March 26, 1983 and March 26, 1983, respectively. The returns were filed before notices under Section 139(2) or 148 were served upon the assessee, Since the returns were filed beyond the prescribed period, interest was levied by the Income-tax Officer under Sub-section (8) of Section 139. He also levied penalties under Section 271(1)(a), after the assessments were completed for all the four assessment years. The petitioner made an application to the Commissioner to waive the interest and penalties levied for the said assessment years. His application under Section 273A was made on February 1, 1986. The Commissioner of Income-tax allowed the said application only partly ; he waived the penalty in a sum of Rs. 2,333 levied under Section 271(1)(a) for the assessment year 1978-79 ; he dismissed the application in all other respects.
2 A perusal of the Commissioner's order discloses the following reasoning under Sub-section (3) of Section 273A that indulgence under this section can be granted only once ; once this indulgence is granted, it is not available for any other assessment year nor for a second time for the same assessment year. This is not a case where the assessee filed the returns of all the relevant assessment years at once in which case it could have been said that the assessee was returning to the path of rectitude. This is a case where the assessee was fully aware of his obligation to file his returns and did file the returns but on each occasion after substantial delay. This shows lack of good faith on his part. In these circumstances, the power under Sub-section (3) can be exercised only in respect of the first assessment year ; once it is so exercised, the power gets exhausted and it is not available for the subsequent assessment years.
3. It is on the above reasoning that the Commissioner waived the penalty for the first assessment year but dismissed the petition in respect of subsequent assessment years.
4. Sub-sections (1) and (3) of Section 273A read at the relevant time as follows :
"273A. (1) Notwithstanding anything contained in this Act, the Commissioner may, in his discretion, whether on his own motion or otherwise,--
(i) reduce or waive the amount of penalty imposed or imposable on a person under Clause (i) of Sub-section (1) of Section 271 for failure, without reasonable cause, to furnish the return of total income which he was required to furnish under Sub-section (1) of Section 139 ; or
(ii) reduce or waive the amount of penalty imposed, or imposable on a person under Clause (in) of Sub-section (1) of Section 271 ; or
(iii) reduce or waive the amount of interest paid or payable under Sub-section (8) of Section 139 or Section 215 or Section 217 or the penalty imposed or imposable under Section 273, if he is satisfied that such person-
(a) in the case referred to in Clause (i), has, prior to the issue of a notice to him under Sub-section (2) of Section 139, voluntarily and in good faith made full and true disclosure Of his income ;
(b) in the ease referred to in Clause (ii), has, prior to the detection by the Income-tax Officer of the concealment of particulars of income or of the inaccuracy of particulars furnished in respect of such income, voluntarily and in good faith, made full and true disclosure of such particulars.
(c) in the cases referred to in Clause (iii), has, prior to the issue of a notice to him under Sub-section (2) of Section 139, or where no such notice has been issued and the period for the issue of such notice has expired, prior to the issue of notice to him under Section 148, voluntarily and in good faith made full and true disclosure of his income and has paid the tax on the income so disclosed, and also has, in all the cases referred to in Clauses (a), (b) and (c), co-operated in any enquiry relating to the assessment of his income and has either paid or made satisfactory arrangements for the payment of any tax or interest payable in consequence of an order passed under this Act in respect of the relevant assessment year ...
(3) Where an order has been made under Sub-section (1) in favour of any person, whether such order relates to one or more assessment years, he shall not be entitled to any relief under this section in relation to any other assessment year at any time after the making of such order,"
5. A reading of the sub-sections shows that, in cases where the requirements mentioned therein are satisfied, the Commissioner gets the jurisdiction to waive the penalty or interest, as the case may be. Merely because the conditions mentioned in Sub-section (1) are satisfied, no assessee can claim a total waiver of penalty/interest. It is a matter within the discretion of the Commissioner. He shall consider all the relevant facts and circumstances of the case and then decide whether penalty/interest should be waived and if so in what measure. Sub-section (3) says that where an order under Sub-section (1) has been made once, it shall not be exercised in respect of the said person again whether in respect of the same assessment year or any other assessment year. At the same time, Sub-section (3) also makes it clear that the order may relate to either one assessment year or more than one assessment year. It is not as if the power under subsection (1) is available only for one assessment year. The true meaning of Sub-section (3) is that the power shall be exercised only once in the case of a given person and not more than once.
6. Coming back to the facts of this case, if the assessee had filed his returns for the said four assessment years on one single date, namely, March 26, 1983, the power under Sub-section (1) could have been exercised in respect of all the four assessment years even according to the Commissioner. But because he filed the returns on different dates, he says, the power under Sub-section (1) is not available. We are not satisfied about the correctness of his reading of Sub-section (3).
7. We must make it clear that the finding with respect to good faith is essentially a question of fact but since the said finding in this case is integrally connected with his understanding of Sub-section (3) on the part of the Commissioner, we are inclined to set aside his order in its totality.
7. The writ petition is, accordingly, allowed and the impugned order herein is set aside in its totality. The Commissioner shall now consider the said application in accordance with law and in the light of the observations made herein. It is made clear that the petitioner's application shall be considered with reference to the law (i.e., Section 273A) as it stood on the date of filing of the application thereunder. No costs.
8. A certified copy of this order may be given to learned counsel for the petitioner on payment of usual changes within three days.