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CS Professional · Compliance Management, Audit and Due Diligence · Non-Compliances, Penalties and Adjudications

Orion Components Ltd failed to file a return with the Registrar. While considering the compounding proposal, the Regional Director directs an employee to file the return on payment of the required fee and additional fee within 30 days. The employee does not comply. What is the consequence for the compounding?

The maximum fine for the offence proposed to be compounded becomes twice the amount provided in the corresponding section. Section 441 lets the authority direct filing on payment of fee and additional fee, and non-compliance with that direction doubles the ceiling. It does not make the offence non-compoundable.

  1. AThe offence becomes non-compoundable and imprisonment only applies
  2. BThe maximum fine for the offence proposed to be compounded becomes twice the amount provided in the corresponding sectionCorrect
  3. CThe Registrar must at once prosecute the company without any further step
  4. DThe direction lapses as the Regional Director cannot issue it

Explanation

Section 441(4) lets the compounding authority direct filing of the document on payment of fee and additional fee. Under 441(5), if the officer or employee fails to comply, the maximum fine for the offence proposed to be compounded is twice the amount provided in the corresponding section. The offence does not become non-compoundable.

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