CS Professional · CSR and Social Governance · Corporate Social Responsibility
Mehta Pharma Ltd fails to transfer Rs 30 lakh that it was required to move to a Schedule VII Fund. Under section 135(7), what is the penalty on the company?
The penalty is Rs 60 lakh. Section 135(7) fixes the company's penalty at twice the amount required to be transferred or Rs 1 crore, whichever is less. Twice Rs 30 lakh is Rs 60 lakh, which is lower than Rs 1 crore.
- ARs 60 lakh, being twice the amount, since it is less than Rs 1 croreCorrect
- BRs 1 crore, since it is the fixed penalty
- CRs 3 lakh, being one-tenth of the amount
- DRs 30 lakh, being the amount itself
Explanation
The company's penalty is twice the amount required to be transferred or Rs 1 crore, whichever is less. Twice Rs 30 lakh is Rs 60 lakh, which is below Rs 1 crore, so Rs 60 lakh applies. Rs 3 lakh reflects the officer's one-tenth measure, which is a different limb.
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