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CS Professional · Compliance Management, Audit and Due Diligence · Signing and Certification

Arjun Pvt Ltd delayed filing its annual return and financial statements. The adjudicating officer issued a notice on 10 June. The company rectified the default on 5 July. Under the proviso to section 454(3), what is the position if the default relates to section 92(4) or section 137(1)/(2)?

No penalty is imposed and the proceedings are deemed concluded. For defaults under section 92(4) or section 137(1) or (2), rectification either before or within thirty days of the adjudicating officer's notice suffices, and the company rectified within 25 days.

  1. APenalty is reduced to half but must still be paid
  2. BPenalty must be paid in full, as rectification is irrelevant
  3. CProceedings are concluded with no penalty, since rectification was within thirty days of the noticeCorrect
  4. DNo penalty only if rectified before the notice was issued

Explanation

The proviso says that where such a default is rectified either before or within thirty days of the issue of the notice, no penalty is imposed and proceedings are deemed concluded. Notice 10 June to 5 July is 25 days, within thirty. Option D ignores the 'within thirty days' limb.

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