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CS Executive · Company Law and Practice · Introduction to Company Law

An application is made in the current financial year to re-open the books of Kaveri Foods Ltd relating to a period earlier than eight financial years immediately preceding the current financial year. The Central Government has issued no direction for keeping books for a longer period. What is the position under section 130?

No order can be made. Section 130(3) prohibits re-opening books for a period earlier than eight financial years immediately preceding the current financial year, unless the Central Government has directed a longer retention period under section 128(5), which has not happened here.

  1. AThe Tribunal may order re-opening for any period if fraud is proved
  2. BThe Tribunal may order re-opening only up to fifteen years back
  3. CNo order can be made for a period earlier than eight financial years immediately preceding the current financial yearCorrect
  4. DThe Registrar may order it without the Tribunal

Explanation

Section 130(3) bars an order for books relating to a period earlier than eight financial years immediately preceding the current one. The exception applies only if the Central Government has directed a longer retention period under the proviso to section 128(5), which is not the case here.

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