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

Kaveri Foods Pvt Ltd is the subject of an application in the financial year 2026-27 to re-open books relating to a period nine financial years before the current financial year. No direction for longer retention has been issued by the Central Government. What is the position under section 130?

No order can be made. Section 130(3) bars 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. Here no such direction exists, so the nine-year-old period cannot be re-opened.

  1. AThe order may be made, as there is no time limit
  2. BThe order may be made only if SEBI is the applicant
  3. CThe order may be made if the company consents
  4. DNo order can be made, because it concerns a period earlier than eight financial years immediately preceding the current financial yearCorrect

Explanation

Section 130(3) prohibits an order to re-open books relating to a period earlier than eight financial years immediately preceding the current financial year. The only exception is where the Central Government has directed a longer retention period under the proviso to section 128(5). No such direction exists here, so the nine-year-old period is barred regardless of who applies or whether the company consents.

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