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July 13, 2017 at 12:31 pm #2322
If a company fails to file its annual returns and its balance sheet within the time limits permitted under the Companies Act 2013, what are the consequences? Is it possible to get such delay excused?
July 13, 2017 at 12:52 pm #2323
Dr. Ashok DhamijaAdvocate
As per Section 403(1) of the Companies Act, 2013, any document, required to be submitted, filed, registered or recorded, shall be submitted, filed, etc., within the time specified in the relevant provision on payment of such fee as may be prescribed.
It is pertinent to point out that as per Section 92(4) of the Companies Act, every company shall file with the Registrar a copy of the annual return, within 60 days from the date on which the annual general meeting is held or where no annual general meeting is held in any year within sixty days from the date on which the annual general meeting should have been held together with the statement specifying the reasons for not holding the annual general meeting, with such fees or additional fees as may be prescribed, within the time as specified, under Section 403.
Proviso to Section 403(1) provides that any document, etc., may be submitted, filed, after the time specified in relevant provision for such submission, within a period of 270 (two hundred and seventy days) from the date by which it should have been submitted, on payment of such additional fee as may be prescribed.
Second Proviso to Section 403(1) lays down that any such document may, without prejudice to any other legal action or liability under the Act, be also submitted, filed, registered or recorded, after the above mentioned period of 270 days on payment of fee and additional fee specified under this section.
Section 403(2) of the Companies Act, 2013, lays down that where a company fails or commits any default to submit or file any document under sub-section (1) before the expiry of the period of 270 days specified in the first proviso to that sub-section with additional fee, the company and the officers of the company who are in default, shall, without prejudice to the liability for payment of fee and additional fee, be liable for the penalty or punishment provided under the Act for such failure or default.
As per the provisions of Section 92(5) of the Companies Act, if a company fails to file its annual return, before the expiry of the period specified under Section 403 with additional fee, the company shall be punishable with fine which shall not be less than Rs. 50,000 (fifty thousand rupees) but which may extend to Rs. 5,00,000 (five lakh rupees) and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to six months or with fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees, or with both.
Likewise, Section 137(3) of the Companies Act, lays down that if a company fails to file the copy of the financial statements, before the expiry of the period specified in Section 403, the company shall be punishable with fine of one thousand rupees for every day during which the failure continues but which shall not be more than ten lakh rupees, and the managing director and the Chief Financial Officer of the company, if any, and, in the absence of the managing director and the Chief Financial Officer, any other director who is charged by the Board with the responsibility of complying with the provisions of this section, and, in the absence of any such director, all the directors of the company, shall be punishable with imprisonment for a term which may extend to six months or with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees, or with both.
Yes, Section 460(b) provides for condonation of delay in filing a document, by laying down that where any document required to be filed with the Registrar under any provision of this Act is not filed within the time specified therein, the Central Government may, for reasons to be recorded in writing, condone the delay.
Dr. Ashok Dhamija is a New Delhi based Supreme Court Advocate and author of law books. Read more about him by clicking here. List of his Forum Replies. List of his other articles. List of his Quora Answers.
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