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 liable to pay, by way of penalty, a sum equal to the amount of loan or deposit so taken or accepted.

(2) Any penalty imposable under sub-section (1) shall be imposed by the Joint Commissioner."

3. Section 269SS of the Act to the extent it is relevant for our purpose reads :

No person shall after the 30th day of June, 1984, take or accept from any other person (hereafter in this section referred, to as the depositor) any loan or deposit otherwise than by an account payee cheque or an account payee bank draft if,-

(a) the amount of such loan or deposit or the aggregate amount of such loan and deposit.

(b) .....................

(c) .....................

is twenty thousand rupees or more."

We are not concerned with clauses (b) and (c) of this section or the proviso to the section. The only other relevant limb of the section is Explanation (iii). That part of the explanation reads ;-

"Explanation.-For the purpose of this section,-

(iii) "loan or deposit" means loan or deposit of money".

4. Section 269T provides for the mode of repayment of certain deposits and in Explanation (ii) to that section. It is provided :-

"deposit" means any deposit of money which is repayable after notice or repayable after a period and, in the case of a person other than a company, includes deposit of any nature."

5. The assessee sought to explain that these amounts were received by it as share application money from 10 persons and subsequently shares were allotted to those persons and consequently, the amounts received from the ten persons in cash were not loans or deposits. The Commissioner concerned took the view that going by the language of Section 269SS of the Act and the explanation relating to loan of deposit, these sums received as share application money had to be held to be deposits within the meaning of that section and consequently, the assessee must be held to have violated Section 269SS of the Act. Thus holding. the Commissioner imposed the penalty as contemplated by Section 271D of the Act. The assessee challenged the order of the assessing officer before the Commissioner of Income Tax Appeals. The Commissioner of Income Tax Appeals accepted the contention of the assessee that it had not. transgressed Section 269SS of the Act. The Revenue challenged the decision of the Commissioner of Income Tax before the Income Tax Appellate Tribunal, Patna Bench. The Tribunal, on a consideration of the relevant aspects took the view that the amounts partook the character of deposits and they having been received in cash in violation of the mandate of Section 269SS of the Act. the penalty was rightly imposed on the assessee by the Commissioner. Thus, the appeal of the Revenue was allowed by the Tribunal. Thereafter, at the instance of the assessee the question above referred to has been refe