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Open letter to PM Narendra Modi on DIR 3 KYC - Remove Penalty or Scrap

Posted on 23 February 2021

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CA Chikkerur CR writes an Open letter to PM Narendra Modi on DIR 3 KYC requesting the PM to either remove the penalty of Rs 5000 on DIR KYC and allow Annual filings to report financials or remove DIR 3 KYC as an annual ritual form forever. Read the official letter below:

Dear Sir PMO India Narendra Modi

CC: Piyush Goyal The Institute of Chartered Accountants of India Finmin North-Block

I, CA Chikkerur CR - Bangalore based Practicing CA, would like to beg your pardon to disturb you again and again before I put my strong Protest for above matter. I always believe in bringing notice to the highest authority -Short comings in administration and inconvenience through Social media. Also believe in suggesting in New way of resolving issues or plugging loopholes in Revenue or in CA practice . Nearly 100+ Suggestions are already suggested in Twitter to you since 7 years. Its because it is My India. My Govt.

Since 2014 when you took oath as Prime Minister, we believed that New Era of India has begin. Ease of Governance and Digitalisation was most liked principles of your Govt. I was one among few CAs who welcomed your Announcement on Nov 8th 2016 for Demonitization.. Whole heartedly welcomed GST, even many MCA related changes to clean up system and get away with Black money, Fake Invoices and Shell Compaies. I believe you and Your intentions are for betterment of nation as भारत मेरा देश

 

Shell companies -Culprit and leader of Black economy and Parallel system in economy. To know real people and link Aadhaar and identity -DIR 3 KYC was introduced along with Office KYC through Form INC 22A by MCA when these companies had major role in making demonetization as failure. It was Welcome Step. Through this, your Govt is able to find real people and you know better how to punish these people who made India as Black Money heaven. We as Indians have strong belief that You will punish Anti Economy Guys

Covid19 was came in March 2020. Till date, you had best control and made Indians to suffer less in Covid19 health issues with your Motivational Nation Address and appealing every Indian to follow Covid precautions. I never seen you without mask and you always take a lead by example.

Because of above DIR3 KYC filing date was extended till 30th Sept 2020. It was done as part of Fresh Start scheme. Till this, Govt and MCA was right. But making DIR 3 KYC as Annual Exercise is stupid and Worst Policy. I can say IAS kind of policy who has no idea on practical front.

I have few points to bring your notice as below

1. DIR 3 KYC was having aim to identify real person as Director.. Why penalty of Rs 5000 is made ? MCA could have done it by making DIR KYC as prior requirement to file Annual return filing rather making income earning source

2. DIR 3 KYC was having pdf form. End date was 30th Sept 2020 (because of Covid). Once filed why DIR 3 KYC again needed in span in next 3 Months? Do businessman need to do compliances only or busines. Is it not against* Ease of Doing* policy of Govt

3. What Identity of Director will get change in 3 months span (Oct 20 to Dec; 20) to make mandatory DIR 3 KYC ? Is it not stupid or blunder act of MCA or Ministry? Mind should be applied before making these compulsions

4. DIR 3 KYC is now web based. Only OTP verification unless address change . Then why should a director need to pay Rs 5000 as late penalty if otp verification is done now. Is it not Day robbery by MCA ? What was intention of KYC - Is it to identity and get Aadhaar linked with DIN or Day robbery

5. Annual filings of Company - AOC4 and MGT 7 starts after end of AGM. Last date of AGM was Dec 31st 2020. Why should DIR 3 KYC date is not be extended till March 2021? If a CA start filing AOC 4 or MGT 7 after Jan 1st , He was stopped by DIR 3KYC late fee Rs 5000. Is it not Day Robbery

So considering above points, I humbly request you to issue necessary guidelines and strict instructions to MCA to stop unnecessary forms beyond its intentions.  One should stop asking Directors to prove again and again their identity . Let Indian Govt work in true spirit of Ease of Doing business

I also humbly request you to either remove penalty of Rs 5000 on DIR KYC and allow Annual filings to report financials or remove DIR 3 KYC as annual ritual form for ever.

Also request you to extend AOC 4 filing dates for 15 days to allow filing which was stopped earlier because of DIR 3KYC without additional late fees

Hoping you will respond in positive way. Allow genuine businessman to file their financials without any penalty and extra fee.. Pls scrap unwanted and repeated forms filings - One time DIR 3 KYC is ok, not every year. Strong belief you act as well as respond positively to this Open letter.

Looking forward necessary notification from MCA today or earliest.

Thanking You
CA Chikkerur CR

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