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Challenge to penalty orders under income tax laws through writ jurisdiction without availing alternate remedy under s. 256 of the I.T. Act, 1961. Analysis: The petitioner, an income-tax assessee, challenged penalty orders through writ jurisdiction without utilizing the alternative remedy under s. 256 of the I.T. Act, 1961. Despite this procedural irregularity, the court proceeded with the case as it was admitted ex parte in 1977. The petitioner was a businessman who filed an income tax return for the assessment year 1971-72. The Income Tax Officer (ITO) made additions to the tune of Rs. 37,465, including a sum of Rs. 10,000 loaned to another entity without disclosing the source of the money. The Appellate Assistant Commissioner (AAC) deleted most of the additions but upheld the Rs. 10,000 addition related to the loan. The ITO then referred the matter to the Income-tax Appellate Tribunal, which confirmed the penalty imposed by the Income-tax Appellate Commissioner (IAC) under s. 271(1)(c) of the Act. The petitioner contended that the IAC lacked jurisdiction to initiate penalty proceedings as the concealed income was determined at Rs. 10,000, below the threshold of Rs. 25,000. However, the court rejected this argument, emphasizing that the ITO's order is the basis for the IAC's jurisdiction. The petitioner also argued that the case was not approached correctly, citing precedents, but the court dismissed this contention, noting a clear legal distinction post the amendment to s. 271(1)(c) of the Act. Additionally, the petitioner claimed that the Tribunal did not consider an affidavit filed regarding the loan transaction. The court disagreed, stating that the Tribunal was not obligated to conduct an elaborate inquiry into the affidavit's contents and that the petitioner's admission of the loan transaction was crucial. Ultimately, the court found no merit in the petition and dismissed it, with no order as to costs. The judgment highlights the importance of following proper legal procedures and the significance of documentary evidence in tax penalty cases.
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