V.K. Singhal, J.—Validity of the provisions of Section 269SS and Section 271D of the Income Tax Act, 1961, has been assailed in these petitions. The petitioner was assessed for the year 1991-92 on February 21, 1994, and proceedings under Section 271D were initiated levying penalty of Rs. 12,50,000 for violation of the provisions of Section 269SS. It was found that the asses-see has received advance of deposits in cash in excess of Rs. 20,000 from various parties. Since the total of that sum was Rs. 12,50,000 penalty of Rs. 12,50,000 was imposed.

2. It is stated by learned counsel for the petitioner that the borrowings have been found to be genuine and have not been treated as income of the petitioner. Neither the provisions of Section 68 were invoked nor any action to bring the said amount to tax was taken. The advances were made by three directors, namely, Sri K. R. Somashekar, S. Rajashekar, S. Chan-drashekar, to the extent of Rs. 7.40 lakhs, Rs. 4,70 lakhs, and Rs. 40,000, respectively. Section 269SS was inserted by the Finance Act, 1984, with effect from April 1, 1984, and was made operative from July 1, 1984. The circular dated July 6, 1984, was issued by the Central Bo