Every Company under Companies Act, 2013 are required to file its Financial Statements in prescribed form within 30 days and its Annual Return within 60 days of its Annual General Meeting. The Compliance of this section is very important and delay in filing of Forms under Section 92 or Section 137 have 2 major concerns:
- Additional Fees of Rs. 100 per day per form without any upper limit (applicable to all Companies); and
- Withdrawal of exemption to the Private Companies which Government has granted to it vide notification dated June 5, 2015 and June 13, 2017
While everyone was worried about point no. 1 viz payment of huge additional fees i.e. Rs. 100 per day without any upper limit. Due to lack of good infrastructure (non functioning of website at crucial times), professionals (specifically CA’s) struggling with so many deadlines and various other reasons, it seemed difficult to file forms within due date. CA and CS Institute have also made its representations to Ministry requesting them to extend deadlines due to various reasons. Keeping in view the requests received, Ministry of Corporate Affairs (MCA) vide its General circular 10/2018 dated October 29, 2018 decided to relax the additional fees payable by companies on e-forms AOC-4, AOC (CFS) AOC-4 XBRL and e- Form MGT-7 upto December 31, 2018 wherever additional fee is applicable. The relaxation of additional fees circular came as a relief to many Companies which are unable to file its Balance Sheet or Annual Return within due date.
The circular issued by MCA was very clear as far as aboive-mentioned point no. 1 was concerned i.e. relaxation of Additional fees for eForm AOC-4, AOC-4 CFS, AOC-4 XBRL, and eForm MGT-7. However, does relaxation of additional fees will amount to extension of time line provided under Section 92 or Section 137 of the Companies Act, 2013?
Let us analyze the relevant parts of Section 92 and Section 137 with relating to filing of Forms first.
Section 92(4) of Companies Act 2013 “Every company shall file with the Registrar a copy of the annual return, within sixty 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.”
Section 137(1) of the Companies Act, 2013 “A copy of the financial statements, including consolidated financial statement, if any, along with all the documents which are required to be or attached to such financial statements under this Act, duly adopted at the annual general meeting of the company, shall be filed with the Registrar within thirty days of the date of annual general meeting in such manner, with such fees or additional fees as may be prescribed”
Does the circular dated 29th October, 2018 grants exemption from delayed filing of forms under respective Sections? Or
Does non-payment of additional fees can be construed as a compliance of respective sections?
The direct impact of this interpretation is linked to exemption granted to Private Companies by Central Government but default also means that Company is liable for penalty if delay in filing is construed as default under respective Section.
While many believes that intention of MCA in granting exemption is to give more time to comply with the filing requirement to the Company under Section 92 and Section 137 respectively and circular relaxing additional fees would amount to extension of time-limit under respective Sections. However, it is important to note that Statutory limit to file the forms under Section 137 and Section 92 is 30 days and 60 days from the date of AGM respectively. The General Circular 10/2018 is granting relaxation in additional fees only and it is neither talking about amendment to respective section nor any notification amending the respective sections is issued by MCA. Which clearly means that filing of forms after 30/60 days, as the case may be, will grant relaxation of additional fees but it will not be construed as compliance of section. Rather it should be treated as a default by the Company from a period between 30/60 days to the date of filing of respective forms.
MCA 5th June Notification: Exemptions to Private Companies U/s. 462 of CA 2013
MCA 13th June 2017 notification: New Exemptions to Private Companies under section 462 of CA, 2013
General Circular 10/2018: MCA extends due date of Filing Annual ROC Returns to 31.12.2018