Irregularity

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

16 November 2010 If a company is not filling its annual accounts since 2001 to either (pvt ltd company)ROC or to income tax department (having zero transactions in all 10 yrs.)& now wants to regularise the things ,what is the procedure & possibility.Regards

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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16 November 2010 Filing of returns as per both the acts are mandatory. ROC returns can be filed by paying additional filing fee as prescribed under section 611(2)of the Companies Act,1956 from 2001 to financial year 2009-10. Coming to Income tax returns the company can now file the returns of assessemt years 2009-10 and 2010-11 only. The returns for earlier years can be filed in reply to a notice from the IT department,if the company receives so.

Querist : Anonymous

Querist : Anonymous (Querist)

17 November 2010 Thanks for the reply,further pl clarify as statutory audit as required under companies Act was also not being done ,it is justified /allowed from the point of view of CA signing the Audit report & as well from the company angel to get all 10 yrs accounts audited together on today`s date.

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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01 August 2024 To address the situation where a private limited company has not filed annual accounts with the Registrar of Companies (ROC) or the Income Tax Department since 2001 and has also not conducted statutory audits during this period, follow these steps to regularize the company's position:

### **1. Regularization of Compliance**

**a. Filing of Annual Accounts:**

1. **Prepare Financial Statements:**
- Prepare financial statements for each year from 2001 to the current year. This includes balance sheets, profit and loss accounts, and cash flow statements.

2. **File with ROC:**
- **ROC Filing:** You need to file the annual returns and financial statements with the ROC for each financial year. Since there have been no transactions, the financial statements will reflect this. Use the Ministry of Corporate Affairs (MCA) portal for filing.
- **Penalties and Additional Fees:** Expect to pay penalties for late filing. The fees are usually determined based on the delay period and the company's authorized capital.

3. **Registrar’s Approval:**
- The ROC may require you to explain the delay and provide reasons for the non-compliance. Submit a letter of explanation along with the filings.

**b. Income Tax Filings:**

1. **Prepare Tax Returns:**
- File income tax returns for each financial year. Even if there are zero transactions, the returns must be filed showing zero income and expenses.

2. **Income Tax Penalties:**
- Be prepared to pay penalties for late filing of income tax returns. The penalty amount depends on the period of delay.

### **2. Statutory Audit**

**a. Conducting Audit:**

1. **Auditor Appointment:**
- Appoint a Chartered Accountant (CA) to conduct the statutory audit for all the years. The audit will need to cover each year individually. It is generally permissible to audit multiple years together, but each year's financial statements need to be audited.

2. **Audit Report:**
- The CA will issue an audit report for each year. Ensure the auditor acknowledges the non-compliance and the reasons behind it in the audit report.

**b. Audit Compliance:**

- **Audit Reports:**
- Obtain the auditor's report for each year. It must be signed by a CA and reflect the true and fair view of the company’s financial position.

### **3. Legal and Compliance Considerations**

**a. Legal Requirements:**

1. **Legal Advice:**
- Consult a legal expert or a company secretary to ensure compliance with all regulatory requirements and to address any legal implications arising from the non-compliance.

2. **Regularize Non-Compliance:**
- The company may need to file a petition with the National Company Law Tribunal (NCLT) or other relevant authorities if significant legal issues arise from the non-compliance.

**b. Company Status:**

1. **Revival of Company Status:**
- If the company has been struck off or is in the process of being struck off, you may need to apply for revival through the NCLT.

2. **Compliance Certificate:**
- After regularizing the filings and audits, ensure you obtain a compliance certificate from the CA and file it with the ROC.

### **Summary:**

1. **File all pending financial statements and annual returns with the ROC.**
2. **File all pending income tax returns with the Income Tax Department.**
3. **Conduct statutory audits for all the years.**
4. **Prepare to pay penalties for the delay.**
5. **Seek legal and professional advice to address any specific issues or complications.**

Regularizing a decade of non-compliance is a significant task, but it is necessary to ensure the company's legal and financial status is updated and compliant with regulations.

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