P.K. Balasubramanyan, C.J.

1. At the instance of the assessee, the Income Tax Appellate Tribunal, Patna Bench has referred the following question for our opinion under Section 256(1) of the Income Tax Act.

"Whether the acceptance of share application money in case amounting to Rs. 20,000/- or more violates the provisions of Section 269SS."

2. During the course of the assessment proceedings for the assessment year 1990-91, it was found by the assessing officer that the assessee, a private limited company, had accepted amounts ofRs. 20.000/- and more in cash from ten persons as entered in its books. The assessments were completed on that basis. But the order of assessment is not before us. Thus, the receipt by the assessee of sums in cash exceeding Rs. 20.000/- (rupees twenty thousand) during the relevant assessment year is not in dispute before us. Holding that the amounts were received in cash in violation of Section 269SS of the Income Tax Act. the assessing officer initiated a penalty proceeding under Section 271D of the Act, Section 271D reads as under :-

"(1) If a person takes or accepts any loan or deposit in contravention of the provisions of Section 269SS, he shall be li