what kind of penalty?

Penalties are not deductible.

it is late fee for insurance

That's why there are book-tax differences that need to be reconciled.

Yes, I understand it now. But do i need to enter the penalty anywhere on schedule C? I ask this question because I find the right place to enter nondeductible expenses for corporations. I did not see where to enter for individuals on schedule C. Thanks.

Yes, I understand we need to reconcile. But I do not find the place to put the nondeductible expense on schedule C. Do i need to put the penalty number at somewhere?

No, not on the return for Sch C.  That belongs to the books.

Thank you!