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Compliance Management, Audit and Due Diligence · Signing and Certification

Penalties and Consequences of Non-Compliance for Annual Return Filing

Updated 11 October 2026 · Fact-checked

If a company does not file its annual return within 60 days of the AGM date, the company and each officer in default pay ₹10,000 plus ₹100 a day after the first day, capped at ₹2,00,000 (company) and ₹50,000 (officer). A practising CS who certifies wrongly faces a ₹2,00,000 penalty.

Understand Penalties and Consequences of Non-Compliance

Section 92 requires every company to prepare an annual return, get it signed and, where required, certified, and file it with the Registrar. The law then attaches consequences to each failure. You must know who is penalised, for what, and how much.

The filing default is dealt with in section 92(5). The return must be filed within sixty days from the date of the AGM. If no AGM is held in the year, the sixty days run from the date on which the AGM should have been held, and the return must come with a statement giving the reasons for not holding it. Miss that period and the company and every officer who is in default are liable to a penalty. It is a monetary penalty, not a fine or imprisonment.

The penalty has two parts: a fixed ₹10,000, and a further ₹100 for each day after the first during which the failure continues. There is a ceiling: ₹2,00,000 for the company and ₹50,000 for an officer in default. The company and the officer are each liable separately, and each has its own cap.

The professional who certifies the return is also covered. Under section 92(6), if a company secretary in practice certifies the annual return otherwise than in conformity with the section or the rules, he is liable to a penalty of ₹2,00,000. Certification under section 92(2) applies to a listed company, or a company with the prescribed paid-up capital or turnover.

Two softeners matter in answers. Section 446B gives lesser penalties for One Person Companies, small companies, start-up companies and Producer Companies. Section 454 lets the adjudicating officer drop the penalty if the section 92(4) default is rectified before, or within thirty days of, the notice.

Key rules to remember

Time limit for filing
Within 60 days from the date of the AGM (or the date the AGM should have been held)
Section 92(4). If no AGM is held, attach a statement of reasons.
Penalty for late filing
₹10,000 + ₹100 per day after the first day of continuing failure
Section 92(5). Applies to the company and every officer in default.
Maximum penalty
Company: ₹2,00,000. Officer in default: ₹50,000
Section 92(5). Separate caps for each.
Days needed to reach the cap
Company: (₹2,00,000 − ₹10,000) ÷ ₹100 = 1,900 days after the first day. Officer: (₹50,000 − ₹10,000) ÷ ₹100 = 400 days after the first day.
So the company reaches its cap on day 1,901 of default, and an officer reaches the cap on day 401.
Penalty on CS in practice
₹2,00,000 for certifying otherwise than in conformity with section 92 or the rules
Section 92(6).
Lesser penalty for OPC, small, start-up, Producer Company
Not more than one-half of the section 92(5) penalty. Effective caps: ₹1,00,000 (company) and ₹25,000 (officer)
Section 446B. Half of ₹10,000 is ₹5,000. Section 446B also sets ceilings of ₹2,00,000 (company) and ₹1,00,000 (officer), but half of the section 92(5) caps is lower, so those ceilings never bind for an annual return default.
Relief on rectification
No penalty if default under section 92(4) is rectified before, or within 30 days of, the adjudicating officer's notice
Proviso to section 454(3).

How to solve Penalties and Consequences of Non-Compliance questions

Use the same sequence for any question on penalties for annual return defaults. State the provision, apply the facts, then conclude with the amount.

  1. 1Identify the default: late or no filing (section 92(4)), incorrect certification (section 92(6)), or another lapse such as signing.
  2. 2Identify who is liable: the company, officers in default, or the practising CS.
  3. 3Check the type of company. If it is an OPC, small company, start-up or Producer Company, apply section 446B.
  4. 4Work out the due date: AGM date plus 60 days, or the date the AGM should have been held plus 60 days.
  5. 5Count the days of delay. Penalty is ₹10,000 for the first day, plus ₹100 for each later day.
  6. 6Apply the cap separately to the company and to each officer.
  7. 7Check relief: rectification before or within 30 days of the notice under section 454, and the right to appeal to the Regional Director within 60 days.
  8. 8Write the conclusion with figures, stating who pays what.

Quickest way: Penalty arithmetic in four lines

When to use it: Use when the question gives a delay in days and asks for the penalty amount.

  1. Delay in days after the due date = D. If D ≥ 1, penalty = ₹10,000 + ₹100 × (D − 1).
  2. Compare with the cap: ₹2,00,000 for the company, ₹50,000 for an officer.
  3. Take the lower figure for each.
  4. If the company is small, OPC, start-up or Producer Company, halve the figure and cap it at ₹1,00,000 for the company and ₹25,000 for an officer. These are half of the section 92(5) caps and are lower than the section 446B ceilings of ₹2,00,000 and ₹1,00,000, so the 446B ceilings do not bind.

Common mistakes in Penalties and Consequences of Non-Compliance

  • Calling the section 92(5) consequence a fine or imprisonment.

    Older provisions and other sections used fine and jail terms, so students assume the same here.

    Fix: Write that it is a penalty. Section 92(5) has no imprisonment.

  • Charging ₹100 per day from day one.

    Students overlook the words 'after the first'.

    Fix: Penalty is ₹10,000 plus ₹100 for each day after the first. So 11 days of delay gives ₹10,000 + ₹1,000 = ₹11,000.

  • Applying one common cap to the company and the officer.

    The two caps are in one sentence.

    Fix: Compute separately. The company is capped at ₹2,00,000 and each officer at ₹50,000.

  • Missing section 446B for small companies and OPCs.

    Students stop at section 92 and forget the overriding provision.

    Fix: Check the company type first. The penalty is up to half, so the effective caps are ₹1,00,000 for the company and ₹25,000 for an officer. The 446B ceilings of ₹2,00,000 and ₹1,00,000 are higher and do not bind here.

  • Stating the wrong penalty for the practising CS or the wrong trigger.

    Students mix it up with disciplinary action under the Company Secretaries Act.

    Fix: Section 92(6) gives a penalty of ₹2,00,000 for certification not in conformity with the section or rules. Disciplinary action is a separate matter.

  • Counting the 60 days from the financial year end.

    Students confuse it with the date as at which particulars are stated.

    Fix: The 60 days run from the AGM date, or the date it should have been held.

Worked examples

Example 1

Rohan Textiles Ltd, a public company that is not a small company, held its AGM on 30 September. It filed its annual return 70 days after the AGM. Compute the penalty on the company, and on its Company Secretary if he is an officer in default.

Show the solution
  1. Due date: within 60 days of the AGM.
  2. Delay: 70 − 60 = 10 days.
  3. Penalty: ₹10,000 for the first day plus ₹100 for each of the 9 days after the first = ₹10,000 + ₹900 = ₹10,900.
  4. Caps: ₹2,00,000 for the company and ₹50,000 for an officer. ₹10,900 is below both.
  5. Section 446B does not apply because it is not a small company, OPC, start-up or Producer Company.
  6. The company is liable to ₹10,900. Section 92(5) applies only to an officer who is in default, so the Company Secretary is liable to ₹10,900 only if he is an officer in default on the facts.

Answer: The company is liable to a penalty of ₹10,900 under section 92(5). The Company Secretary is liable to the same ₹10,900 only if he is an officer in default; otherwise no penalty falls on him. The adjudicating officer can waive the penalty if the default was rectified before, or within 30 days of, his notice.

Example 2

Mehta Agro Pvt Ltd is a small company. It filed its annual return 31 days late. Compute the maximum penalty on the company under sections 92(5) and 446B.

Show the solution
  1. Basic penalty under section 92(5): ₹10,000 for the first day.
  2. Further penalty: ₹100 × 30 days after the first = ₹3,000.
  3. Total under section 92(5) = ₹13,000, which is below the ₹2,00,000 cap.
  4. Section 446B applies to small companies: penalty not more than one-half of that specified. One-half of ₹13,000 = ₹6,500.
  5. Check the caps: half of the section 92(5) caps is ₹1,00,000 for the company and ₹25,000 for an officer. These are lower than the section 446B ceilings of ₹2,00,000 and ₹1,00,000, so the 446B ceilings are not binding. ₹6,500 is below both.

Answer: The penalty on the company cannot exceed ₹6,500. The same half rule applies to its officer in default, whose penalty also cannot exceed ₹6,500 here. For a small company the effective caps are ₹1,00,000 (company) and ₹25,000 (officer).

Exam tips

  • Quote the provision first, then the facts, then the conclusion with figures.
  • Learn the four numbers: ₹10,000, ₹100 per day, ₹2,00,000 and ₹50,000. Add the CS penalty of ₹2,00,000.
  • In a case question, ask whether the company is small, OPC, start-up or Producer Company before computing.
  • Name the proviso to section 454(3) as the relief when the default is cured.
  • When the case involves the CS, separate the company penalty from the section 92(6) penalty on the practitioner.

Practice questions from Signing and Certification

Penalties and Consequences of Non-Compliance in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Penalties and Consequences of Non-Compliance: frequently asked questions

What is the penalty for not filing the annual return under section 92?

The company and every officer in default pay ₹10,000 plus ₹100 for each day after the first that the failure continues. The maximum is ₹2,00,000 for the company and ₹50,000 for an officer in default.

What is the penalty for wrong certification of the annual return by a company secretary in practice?

Under section 92(6), a company secretary in practice who certifies the annual return otherwise than in conformity with the section or the rules is liable to a penalty of ₹2,00,000.

Do small companies pay a lower penalty for annual return default?

Yes. Under section 446B, an OPC, small company, start-up company or Producer Company pays not more than one-half of the specified penalty. For this default the effective maximum is ₹1,00,000 for the company and ₹25,000 for an officer in default, because half of the section 92(5) caps is lower than the 446B ceilings of ₹2,00,000 and ₹1,00,000.

Can the penalty be avoided if the return is filed late?

Under the proviso to section 454(3), if the section 92(4) default is rectified before, or within thirty days of, the adjudicating officer's notice, no penalty is imposed and the proceedings are deemed concluded.