What is the time limit for filing financial statements with ROC and Non-Compliance penalty

What is the time limit for filing financial statements with ROC and Non-Compliance penalty . In this article, we will take you through the mandatory ROC annual 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 Arya Steels Rolling (India) 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
Arya Steels Rolling (India) Limited, a company registered under the Companies Act, 2013, 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 26.10.2016 to the company and its directors, calling them to show cause for non-filling of such documents. 
In response, the company requested to allow one month time to file necessary e- forms and citing the reasons as the company could not file the same due to technical reasons. However, the company has filed the due annual returns and balance sheets for the FY 2014-15 on 23.01.2017
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 appellant company had filed a compounding application with office of RD, WR, Mumbai u/s 441 of the companies Act 2013. Company contended that the company is facing recession since last 4 years. In the current market scenario of recession, it is very difficult for the company to achieve the last year sales amount.

The company is facing tough period during current year and due to recession in the market the sales and profitability of the company is substantially decreased in the current year.

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:

On Company: Rs 4,50,000

On officers in default: Rs. 1,45,000

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 that impugned order is liable to be set aside being defective, the order is accordingly set aside.
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.
Takeaways:
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 Arya Steels Rolling (India) 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 annual 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 Arya Steels Rolling (India) 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

Arya Steels Rolling (India) Limited, a company registered under the Companies Act, 2013, 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 26.10.2016 to the company and its directors, calling them to show cause for non-filling of such documents.

In response, the company requested to allow one month time to file necessary e- forms and citing the reasons as the company could not file the same due to technical reasons. However, the company has filed the due annual returns and balance sheets for the FY 2014-15 on 23.01.2017

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 appellant company had filed a compounding application with office of RD, WR, Mumbai u/s 441 of the companies Act 2013. Company contended that the company is facing recession since last 4 years. In the current market scenario of recession, it is very difficult for the company to achieve the last year sales amount.
The company is facing tough period during current year and due to recession in the market the sales and profitability of the company is substantially decreased in the current year.

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:

On Company: Rs 4,50,000
On officers in default: Rs. 1,45,000

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 that impugned order is liable to be set aside being defective, the order is accordingly set aside.

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.

Takeaways:

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 Arya Steels Rolling (India) 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.