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Penalty u/s. 271(1)(c) on disallowance u/s. 40A(3)

Started by B Natarajan, July 05, 2011, 07:42:35 PM

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B Natarajan

One of my clients made payments in cash exceeding the limits to co-operative sugar mills. The stock has been duly brought to account and sale and profit have been properly accounted. The Assessing Officer on reassessment proceedings has made disallowance u/s. 40A(3) and also levied penalty u/s. 271(1)(c). Is the levy of penalty u/s. 271(1)(c) valid? If there are any case law please provide the same.