Penalty Imposable on cash loan from person other than partners

The short facts involved in the above appeal are relating to the contribution made by 12 persons amounting to Rs. 51,20,000/- during the assessment year 2005-2006. The assessing officer found that the assessee has accepted the aforesaid amount contravening the provisions of Section 269SS of the Income-tax Act (for short `the Act’) and initiated proceedings to impose penalty under Section 271DD of the Act. The assessee tried to explain the said allegation by contending that the aforesaid amounts were collected from promoters who are not aware of the provisions of the Income-tax Act for th...