18 January 2012
The company in question is a pvt ltd company with turnover less than Rs.5 lacs for the year ended 31/3/2011 and usually also for ant other year it is similar. It has an authorised capital and paid-up capital of Rs.1 lac each. It has 2 shareholders who are also its directors. The company has no VAT or Service Tax Registration and it is obviously not applicable to Tax Audit u/s 44AB because of its very low turnover. Correct?
Now, no compliance for the company has been done for the year ended 31/3/2011. My question now is what compliance has to be done for pvt ltd co. apart from the following and will be the penalty in this case:
1) Statutory company audit is pending till today 2) Income Return (ITR-6) is pending till today 3) Form 20B and Form 23AC have also not been filed till today 4) Is there any other compliance to be done apart from the above 3?
Yes I understand that. But what if the date of audit is in January 2012 instead of upto 30th Sept 2011. Does that make any difference or does it increase the penalty in any way?
Also, the returns filed with MCA are only 23AC with 23ACA and 20B. In case of 23B, I think that is only filed when a new auditor is appointed, correct?
02 August 2024
For a private limited company, compliance with statutory requirements is essential, regardless of turnover or size. Here’s a detailed overview of the compliance requirements, penalties for delays, and additional considerations for the scenario you’ve described:
### **Compliance Requirements:**
1. **Statutory Audit:** - **Requirement:** Every private limited company must have its financial statements audited annually by a Chartered Accountant. The audit should be completed within 180 days from the start of the financial year, i.e., by 30th September of the following year. - **Penalty for Delay:** If the audit is not completed on time, the company and its directors can face penalties. The penalty for not appointing an auditor or delaying the audit can be substantial, and it may also lead to legal consequences under the Companies Act, 2013.
2. **Income Tax Return (ITR-6):** - **Requirement:** Income tax returns should be filed annually. For the financial year ending 31/03/2011, the due date for filing the return would have been 30th September 2011. - **Penalty for Delay:** Late filing of income tax returns attracts a penalty. For returns filed after the due date, interest under Section 234A and penalty under Section 271F can be levied. If the return is filed after the completion of the assessment year, additional penalties may apply.
3. **Form 20B and Form 23AC:** - **Requirement:** - **Form 20B:** Annual Return (prior to the Companies Act, 2013) should have been filed within 60 days from the date of the Annual General Meeting (AGM). - **Form 23AC:** Balance Sheet and Profit & Loss Account (under the Companies Act, 1956) should be filed with the Registrar of Companies (ROC) within 30 days from the date of AGM. - **Penalty for Delay:** Late filing of these forms attracts a penalty based on the duration of delay. For each day of delay, there is a specific amount or percentage of the paid-up capital that may be charged as a penalty.
4. **Other Compliance:** - **Form 23B:** This form is used for the appointment of an auditor. It is relevant when a new auditor is appointed, and not necessary if the same auditor continues. - **Form 23AC and 23ACA:** If filed, ensure that they align with the audited accounts and the requirements of the Companies Act.
### **Handling Late Compliance:**
1. **Penalties:** - **Audit Delay:** If the audit is done beyond the statutory deadline (30th September), the company and its directors can be penalized. The penalty amount can be significant and may also attract additional scrutiny from regulatory authorities. - **Income Tax Returns:** Late filing penalties will apply, and interest on late payments may be accrued. - **Annual Return & Financial Statements:** Penalties for late filing with the ROC are based on the duration of the delay. The earlier the compliance is done, the lower the penalty.
2. **Impact of Late Audit:** - **Audit Completion Date:** If the audit is completed in January 2012, it will still be considered delayed, and the company will face penalties as prescribed by the Companies Act. The delay in audit does not reduce the penalty but may affect the accuracy of the financial statements and their acceptability by regulatory bodies.
3. **Additional Compliance:** - **Company Law Compliance:** Ensure that all provisions under the Companies Act, 2013 (if applicable) are followed, including updates to forms and regulations. For any transition or updates under the new Companies Act, ensure all requirements are met. - **Tax Compliance:** Ensure that all applicable taxes, including VAT or service tax if applicable, are duly paid and reported.
### **Steps to Take:**
1. **Complete Pending Compliance:** Address all pending statutory and tax compliance issues as soon as possible. 2. **Consult a Professional:** Engage with a Chartered Accountant or Company Secretary to address the non-compliance issues, calculate the penalties, and take corrective actions. 3. **File Necessary Forms:** Ensure that all overdue forms and returns are filed with the respective authorities along with any applicable late fees. 4. **Maintain Documentation:** Keep all documentation related to compliance, including communication with regulatory authorities and proof of payment of penalties.
### **Conclusion:**
Late compliance with statutory requirements can lead to significant penalties and legal consequences. It is crucial to promptly address all pending compliance issues and work with professionals to ensure that the company adheres to all regulatory requirements and minimizes the impact of any delays.
CAclubindia
