CS Professional · CSR and Social Governance · CSR Policy
Sagar Chemicals Ltd failed to transfer Rs 30 lakh required to go to a Schedule VII Fund. Under section 135(7), what is the penalty on the company, and on each officer in default?
The company is liable to twice the amount, Rs 60 lakh, being lower than the Rs 1 crore cap. Each officer in default pays one-tenth of the amount, Rs 3 lakh, but capped at Rs 2 lakh, so the penalty is Rs 2 lakh.
- ACompany: Rs 60 lakh; officer: Rs 3 lakh
- BCompany: Rs 60 lakh; officer: Rs 2 lakhCorrect
- CCompany: Rs 30 lakh; officer: Rs 2 lakh
- DCompany: Rs 1 crore; officer: Rs 3 lakh
Explanation
Company penalty is twice the amount or Rs 1 crore, whichever is less: 2 x 30 lakh = 60 lakh, which is less than 1 crore. Officer penalty is one-tenth of the amount or Rs 2 lakh, whichever is less: 3 lakh versus 2 lakh gives Rs 2 lakh. The Rs 3 lakh option ignores the cap.
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