Financial year greater than 12 months

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

16 April 2015 One of my Clients is a pvt ltd Co incorporated in Feb 2015. I am intending to close its accounts on 31st March 2016(thereby making financial year of 14 months which is allowed as per the provisions of Co's Act 2013).

I just want to confirm that is there any form which needs to be filed or any other compliance to increase the financial year to 14 months(I have filed ADT-1 for 14 months even though it was not required for 1st time).

I am also filing its income tax return for these 2 months i.e Feb 2015 to 31st march 2015 for which I need to make balance sheet as on 31/03/2015 since in Income Tax it is necessary to end financial year on 31st March. Won't that lead to any Non Compliance in Companies Act?

Thanks in Advance

Pratik Shah

Pratik Shah (Expert)
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20 April 2015 No, you do not need to file any form for a financial year exceeding 12 months.

But I feel that you do not need to file IT Return for 2 months because I assume there would not be any transactions in the company during these days and there are no penalty for non-filing of IT Return if the company does not have tax liability during this period.

If you show closure of FY for 2 months, then you need to submit Audited Balancesheet with IT Return. This will only happen in AGM (If you know, members at AGM shall approve Audited Financials).

Conclusion:
In my views, you should not file IT return this year and you do not need to file any form with ROC for increase in FY for more than 12 months.

Querist : Anonymous

Querist : Anonymous (Querist)

20 April 2015 Thanks for the reply sir !
But as per Income Tax Act,a company has to file Income Tax Return even though no income tax liability is there.
There is a penalty of Rs 10000/- for Non filing of return.
I would prefer Non filing of IT Return rather than preparing financials for 2 Months.

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Pratik Shah

Pratik Shah (Expert)
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20 April 2015 Just for my knowledge, can I ask you in which provisions of Income Tax Act, it is written that penalty of Rs 10,000 will be charged for non-filing of IT Return?

Thanks

Querist : Anonymous

Querist : Anonymous (Querist)

25 June 2015 I would like to correct the amount of Penalty. Under Sec 271F, a penalty of Rs 5,000/- can be levied.

Accept my Apologies for replying after such a long time.

Pratik Shah

Pratik Shah (Expert)
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01 July 2015 Not a problem. I don't think that non-filing of return would be a much problem to a company. I suggest you to show first financial year of 14 months.