Income tax act 40 A (3)

You are right. The section 40A(3) is applicable for income under head PGBP. While the TA/DA allowances provided to an employee comes under 'Salary' head. 

The denial of reimbursement may be due to non providing the valid proof of expense like bill of transporter along with payment receipt by cash; or may be due to any internal advisory for cash payments.

Sec 40( A)3 is a section which embodies lot of aspects.

Cash payment in excess of Rs.20000 is disallowed.

In my case, is it justifiable?

You have right to recover Money. In  many cases particularly in case of Transfer from one city to another city

Person has to attend so many matters . if misses some article in Trasport Vehicle , in majority case he loses it.

Please get receipt of payment from Transport Compnay and claim expenses you have every right to get reimbursement

Sir, if I was not aware about the internal advisory. May I claim the amount?

Yes you can claim 

Now, my department has rejected the bill what can I do now?

Get it reimbursed in your account if possible. 

I could not understand what you mean 

Section 40A(3) is a business-income disallowance: it restricts deduction of business expenditure paid in cash above the prescribed limit, subject to specified exceptions. A government employee’s transfer claim is not a business deduction claimed in computing taxable business income. Therefore, the PAO’s reliance on section 40A(3) alone does not appear to be the appropriate basis for rejecting your reimbursement claim.

That does not automatically establish that the claim must be paid. The department may have separate TA rules, financial instructions or documentation requirements governing payment to transporters. Ask the PAO to identify the specific rule or instruction relied upon and seek review through your department’s prescribed grievance or appeal channel. Keep the transporter’s receipt, proof of payment, transfer order and claim papers; the applicable departmental rules and the nature of the payment will matter.

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