What are the consequences of non filing of ROC forms in XBRL Mode?

What are the consequences of non filing of ROC forms in XBRL Mode?. Annual Filling is a mandatory compliance for any company irrespective of their size, nature and location. As we can observe in this MCA adjudication order in which a company has failed to file a copy of financial statement with the ROC.
Section 137 of the Companies Act, 2013 mandates that every company must file a copy of its financial statements, including consolidated financial statements (if applicable), along with the necessary documents with the Registrar of Companies (ROC) within thirty days of its annual general meeting (AGM). If the financial statements are not adopted at the AGM, they must still be filed as provisional documents within the same timeframe, with the final adopted version to be submitted after an adjourned AGM.
Applicable Provisions
This MCA adjudication order involves an appeal under Section 454(5) of the Companies Act, 2013, concerning the adjudication of penalties. The relevant rules include the Companies (Adjudication of Penalties) Rules, 2014. The matter was brought before the Regional Director (ER), Kolkata, for consideration.
Facts of the Case with ROC and RD
In Maheep Marketing Pvt Ltd, concerned ROC had passed adjudication order dated 31/07/2023 for violation of section 137 of the companies Act 2013.
As per the aforesaid order, the office of ROC had issued adjudication notice for violation of section 137 of the Act dated 30.01.2023 to the company and its officers. That in this regard a reply dated 03/05/2023 was received by the ROC, from the company and its officers for aforesaid adjudication notice which was not found satisfactory by the adjudicating Authority.
The Registrar of Companies (ROC) imposed penalties for non-compliance, leading the company to file an appeal before the Regional Director (RD) and an opportunity of being heard was given by the RD to appellants on 22/02/2024.The authorised representative on the behalf of the company stated that the:-

By way of amendment on 29.09.2020 if any non-compliance is related to section section 92(4) or 137(2) and such default has been rectified either prior to, or within 30 days of, the issue of the notice by the adjudicating officers, no penalty shall be imposed in this regard and all proceeding under this section in respect of such default shall be deemed to be concluded.

The Company has filled its balance sheet for the F.Y 2020.21 by way of filing e-form AOC-4 XBRL.

Imposed Penalty
Considering all the facts, circumstances and all the submission made by the company, the adjudicating authority had imposed penalty on companies and officers for violation of section 137 of the Act.
Penalty u/s 137(3) of the companies Act, 2013 against the defaulters (First Default = Rs. 10,000. Continuing default = Rs100 day. Maximum Rs.2,00,000 in case of company and Rs 50,000 in case of officer in default and any other person)

To whom penalty Imposed

Penalty

Continuing Default

Maximum Penalty

On Company

10,000

220*100 =22,000Already paid additional fee of Rs. 22,100Net penalty = 9,900

2,00,000

On 1ST director

10,000

220*100 = 22,000

50,000

On 2nd director

10,000

220*100 = 22,000

50,000

Reduction in Penalty
Based on the above submission made by the authorised representative of the appellants there is merit in the submissions and as the company and has already filed financial statements for the FY 2020-21 on 06.08.2022 i.e. prior  to initiation of adjudication proceedings and passing of adjudication order by the ROC . Accordingly, the concerned RD set aside the order of ROC, west Bengal dated 31/07/2023 and allow the appeal.
Any Benefit of Section 446B of Companies Act
Section 446B of the Companies Act, 2013 provides a significant relief mechanism for small companies and start-ups by reducing the penalty burden for certain non-compliances. Under this provision, if a small company or a start-up commits a default for which a penalty is prescribed under the Act, the penalty imposed shall not be more than half of the specified penalty, subject to a maximum limit. In this adjudication matter of Maheep Marketing Pvt Ltd the concerned RD set aside the order of concerned ROC thus there was no need to claim under this section.
Findings: -
In conclusion, the appeal under Section 454(5) of the Companies Act, 2013, was carefully examined by the Regional Director and considering all the fact and circumstances RD is of view that there is merit in the appeal and accordingly order of ROC get set aside. This order also highlights that the importance of compliance withing the prescribed time period can save the company and its officers from hefty penalty amount.
Download MCA Adjudication Order

Annual Filling is a mandatory compliance for any company irrespective of their size, nature and location. As we can observe in this MCA adjudication order in which a company has failed to file a copy of financial statement with the ROC.

Section 137 of the Companies Act, 2013 mandates that every company must file a copy of its financial statements, including consolidated financial statements (if applicable), along with the necessary documents with the Registrar of Companies (ROC) within thirty days of its annual general meeting (AGM). If the financial statements are not adopted at the AGM, they must still be filed as provisional documents within the same timeframe, with the final adopted version to be submitted after an adjourned AGM.

Applicable Provisions

This MCA adjudication order involves an appeal under Section 454(5) of the Companies Act, 2013, concerning the adjudication of penalties. The relevant rules include the Companies (Adjudication of Penalties) Rules, 2014. The matter was brought before the Regional Director (ER), Kolkata, for consideration.

Facts of the Case with ROC and RD

In Maheep Marketing Pvt Ltd, concerned ROC had passed adjudication order dated 31/07/2023 for violation of section 137 of the companies Act 2013.

As per the aforesaid order, the office of ROC had issued adjudication notice for violation of section 137 of the Act dated 30.01.2023 to the company and its officers. That in this regard a reply dated 03/05/2023 was received by the ROC, from the company and its officers for aforesaid adjudication notice which was not found satisfactory by the adjudicating Authority.

The Registrar of Companies (ROC) imposed penalties for non-compliance, leading the company to file an appeal before the Regional Director (RD) and an opportunity of being heard was given by the RD to appellants on 22/02/2024.The authorised representative on the behalf of the company stated that the:-

By way of amendment on 29.09.2020 if any non-compliance is related to section section 92(4) or 137(2) and such default has been rectified either prior to, or within 30 days of, the issue of the notice by the adjudicating officers, no penalty shall be imposed in this regard and all proceeding under this section in respect of such default shall be deemed to be concluded.
The Company has filled its balance sheet for the F.Y 2020.21 by way of filing e-form AOC-4 XBRL.

Imposed Penalty

Considering all the facts, circumstances and all the submission made by the company, the adjudicating authority had imposed penalty on companies and officers for violation of section 137 of the Act.

Penalty u/s 137(3) of the companies Act, 2013 against the defaulters (First Default = Rs. 10,000. Continuing default = Rs100 day. Maximum Rs.2,00,000 in case of company and Rs 50,000 in case of officer in default and any other person)

To whom penalty Imposed	Penalty	Continuing Default	Maximum Penalty
On Company	10,000	220*100 =22,000Already paid additional fee of Rs. 22,100Net penalty = 9,900	2,00,000
On 1^ST director	10,000	220*100 = 22,000	50,000
On 2^nd director	10,000	220*100 = 22,000	50,000

Reduction in Penalty

Based on the above submission made by the authorised representative of the appellants there is merit in the submissions and as the company and has already filed financial statements for the FY 2020-21 on 06.08.2022 i.e. prior to initiation of adjudication proceedings and passing of adjudication order by the ROC . Accordingly, the concerned RD set aside the order of ROC, west Bengal dated 31/07/2023 and allow the appeal.

Any Benefit of Section 446B of Companies Act

Section 446B of the Companies Act, 2013 provides a significant relief mechanism for small companies and start-ups by reducing the penalty burden for certain non-compliances. Under this provision, if a small company or a start-up commits a default for which a penalty is prescribed under the Act, the penalty imposed shall not be more than half of the specified penalty, subject to a maximum limit. In this adjudication matter of Maheep Marketing Pvt Ltd the concerned RD set aside the order of concerned ROC thus there was no need to claim under this section.

Findings: -

In conclusion, the appeal under Section 454(5) of the Companies Act, 2013, was carefully examined by the Regional Director and considering all the fact and circumstances RD is of view that there is merit in the appeal and accordingly order of ROC get set aside. This order also highlights that the importance of compliance withing the prescribed time period can save the company and its officers from hefty penalty amount.