MCA Penalty for late filing of AOC-4 & MGT-7A by Private Company under Companies Act 2013

MCA Penalty for late filing of AOC-4 & MGT-7A by Private Company under Companies Act 2013. In this article, we will take you through the mandatory ROC filing requirements under Section 92 and Section 137 of the Companies Act, 2013, focusing on the implications of non-compliance and the penalties involved. Section 92(5) mandates that every company, including its directors, must file an annual return, while Section 137(3) requires the filing of the financial statement with the Registrar of Companies (ROC) within a specified time. Failure to comply with these provisions can result in penalties being levied against both the company and its directors, as demonstrated in the case of Goa Nidhi Limited. The company’s failure to timely file its financial statements and annual return led to the imposition of penalties by the ROC.
Applicable Provisions
The case involves an appeal under Section 454(5) of the Companies Act, 2013, concerning the adjudication of penalties for defaulting in filling of its annual return and financial statement for the Financial Year for the financial year 2014-2015. The matter was brought before the Regional Director (WR), Mumbai, for consideration.
Facts of the Case with ROC and RD
Goa Nidhi Limited, a company registered under the Companies Act, 1956, with its registered office in Goa, was found to be in default of Section 92(5) and section 137 (3) of the Companies Act 2013. The ROC issued a show cause notice dated 02/04/2019 to the company and its directors, calling them to show cause for non-filling of such documents. 
In response, the stated vide reply dated 18.04.2019 that it has filed its return for the FY  2017-18 on 16/07/2019.
The Registrar of Companies (ROC) considering the facts and circumstances-imposed penalties for non-compliance, leading the company to file an appeal before the Regional Director (RD). The hearing was attended by the company's representative, and contended that the:

The concerned person looking after the affairs of the company fell ill due to which, the company is faced difficulties in filling returns.

The delay was unintentional and without any mala fide intention.

The company is Nidhi Company with a paid-up capital of Rs. 5.00 lakh only.

The company is not carrying on any business activity since the last several years till the date and has incurred loss of Rs. 1.37 lakh during Financial Year 2017-18.

The company has now made compliance by filling of the said statutory returns.

Imposed Penalty
The ROC after considering the fact and circumstances of the case levied penalties. The penalty amount was determined based on the company's failure to comply with the relevant legal requirements. The details of the penalty, are as follows:
For financial Statement U/S 137 (1) of the companies Act 2013

On Company: Rs 1,90,000

On officers in default: Rs. 1,19,000 each

For Annual returns u/s 92 (4) of the companies Act 2013

On Company: Rs 66,100

On officers in default: Rs. 66,100 each

Reduction in penalties:              
After considering all the submissions made by the appellants in the appeal and oral submissions made by the company concerned RD is of view it is apparent that the impugned order is defective on this count both in calculating and imposing the penalties as required by section 92 and 137 of the Act. Thus, the impugned order is liable to set aside being defective on many counts.
Any Benefit of Section 446B of Companies Act
Section 446B of the Companies Act, 2013, provides for lesser penalties in cases involving small companies and startups.
To Conclude:
This adjudication order underscores the critical importance of adhering to the annual filing requirements mandated under the Companies Act, 2013. Non-compliance with Sections 92 and 137 can lead to significant penalties, as seen in the case of Goa Nidhi Limited. However, in this case appeal filled by the company has contended various grounds which had been surpassed by the ROC while hearing the matter. After considering all the fact and circumstances presented by the appellant company RD set aside the order for being defective on various grounds.
Download MCA Adjudication Order

In this article, we will take you through the mandatory ROC filing requirements under Section 92 and Section 137 of the Companies Act, 2013, focusing on the implications of non-compliance and the penalties involved. Section 92(5) mandates that every company, including its directors, must file an annual return, while Section 137(3) requires the filing of the financial statement with the Registrar of Companies (ROC) within a specified time. Failure to comply with these provisions can result in penalties being levied against both the company and its directors, as demonstrated in the case of Goa Nidhi Limited. The company’s failure to timely file its financial statements and annual return led to the imposition of penalties by the ROC.

Applicable Provisions

The case involves an appeal under Section 454(5) of the Companies Act, 2013, concerning the adjudication of penalties for defaulting in filling of its annual return and financial statement for the Financial Year for the financial year 2014-2015. The matter was brought before the Regional Director (WR), Mumbai, for consideration.

Facts of the Case with ROC and RD

Goa Nidhi Limited, a company registered under the Companies Act, 1956, with its registered office in Goa, was found to be in default of Section 92(5) and section 137 (3) of the Companies Act 2013. The ROC issued a show cause notice dated 02/04/2019 to the company and its directors, calling them to show cause for non-filling of such documents.

In response, the stated vide reply dated 18.04.2019 that it has filed its return for the FY 2017-18 on 16/07/2019.

The Registrar of Companies (ROC) considering the facts and circumstances-imposed penalties for non-compliance, leading the company to file an appeal before the Regional Director (RD). The hearing was attended by the company's representative, and contended that the:

The concerned person looking after the affairs of the company fell ill due to which, the company is faced difficulties in filling returns.
The delay was unintentional and without any mala fide intention.
The company is Nidhi Company with a paid-up capital of Rs. 5.00 lakh only.
The company is not carrying on any business activity since the last several years till the date and has incurred loss of Rs. 1.37 lakh during Financial Year 2017-18.
The company has now made compliance by filling of the said statutory returns.

Imposed Penalty

The ROC after considering the fact and circumstances of the case levied penalties. The penalty amount was determined based on the company's failure to comply with the relevant legal requirements. The details of the penalty, are as follows:

For financial Statement U/S 137 (1) of the companies Act 2013

On Company: Rs 1,90,000
On officers in default: Rs. 1,19,000 each

For Annual returns u/s 92 (4) of the companies Act 2013

On Company: Rs 66,100
On officers in default: Rs. 66,100 each

Reduction in penalties:

After considering all the submissions made by the appellants in the appeal and oral submissions made by the company concerned RD is of view it is apparent that the impugned order is defective on this count both in calculating and imposing the penalties as required by section 92 and 137 of the Act. Thus, the impugned order is liable to set aside being defective on many counts.

Any Benefit of Section 446B of Companies Act

Section 446B of the Companies Act, 2013, provides for lesser penalties in cases involving small companies and startups.

To Conclude:

This adjudication order underscores the critical importance of adhering to the annual filing requirements mandated under the Companies Act, 2013. Non-compliance with Sections 92 and 137 can lead to significant penalties, as seen in the case of Goa Nidhi Limited. However, in this case appeal filled by the company has contended various grounds which had been surpassed by the ROC while hearing the matter. After considering all the fact and circumstances presented by the appellant company RD set aside the order for being defective on various grounds.