Compounding of Offence under Sec 621A

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This query is : Resolved

Atul Vachharajani (Querist)

26 February 2008 I have read at many places that before applying for compounding of offence under 621A, the offence committed should be first rectified i.e. it should not be a continuing offence. For example, if the Bal Sheet etc. is not filed or Sec 383A is not complied and so on, such offences have to end first by filing the documents or complying with 383A etc.

Can you tell me under which section, rule or guidlines such prior compliance before applying for compounding is indicated.

My email ID is atulv27@gmail.com

Regards.

Atul V.

R.V.RAO

R.V.RAO (Expert)

26 February 2008 PARA 4 OF SUB SEC 1 OF SEC 621 A SAYS THAT
IN PRESCRIBING THE SUM REQUIRED TO BE PAID OR CREDITED FOR COMPOUNDING AN OFFENCE ,THE SUM IF ANY PAID BY WAY OF ADDITIONAL FEES UNDER SUB SEC (2) OF SEC 611 WILL BE TAKEN INTO ACCOUNT.
AGAIN UNDER SUB SEC 4 OF SEC 621A ,IT IS LAID DOWN THAT CENTRAL GOVT.WHILE DEALING WITH A PROPOSAL FOR COMPOUNDING AN OFFENCE .....MAY DIRECT..... AN OFFICER OR EMPLOYEE OF THE COMPANY TO FILE OR REGISTER WITH OR ON PAYMENT OF OF THE FEES AND THE ADDITIONAL FEES TREQUIRED TO BE PAID UNDER SEC 611 SUCH RETURN, ACCOUNT OR OTHER DOCUMENT WITHIN SUCH TIME AS MAY BE PRESCRIBED IN THE ORDER.
BOTH THE ABOVE PARAS MAKE IT CLEAR THAT
ONCE PAID ANY FEES/ADDITIONAL FEES WILL BE TAKEN INTO ACCOUNT.
IF NOT PAID ALREADY, THE ORDER OF COMPOUNDING MAY DIRECT SUCH FEES/ ADDTIONAL FEES TO BE PAID.
SO THIS SECTION ITSELF IS CLEAR ABOUT PAYMENT OF THE FEES.
AND AS WE KNOW THAT PAYMENT OF THE FEES/ADDL. FEES ARISES ONLY WHILE FILING THE DOCUMENTS REQUIRED TO BE FILED.
SO WE HAVE BOTH OPTIONS OPEN .PAY EARLIER OR AS DIRECTED.
BUT IT IS NOT SUCH THAT IT MUST HAVE ALREADY BEEN PAID.
IT IS ALWAYS BETTER NOT TO CONTINUE WITH AN OFFENCE . SO FILE THE DOCUMENTS AND PAY THE FEES EARLY TO AVOID CONTINUATION OF THE OFFENCE.
BUT WHAT IF WE CONTINUE WTTH THE OFFENCE?
THE RESULT IS AN ADVERSE COMMENTARY IN SECRETARIAL AUDIT REPORT AND ALSO BY STATUTORY AUDITORS WHO QUALIFY THEIR REPORTS.
ALSO LENDING INSTITUTIONS ALWAYS DEMAND PROMPT STATUTORY COMPLIANCES .
R.V.RAO

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)

26 February 2008 That was a good reply by Mr. Rao. Once it is known that an offence has been committed, there is no logic in leaving it open while attempting to compund.

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