MCA amends strike-off rules – Mandatory filing of overdue Financial Statements, before striking-off of companies

Strike Off of Companies
A company cannot file a strike-off application unless it has filed overdue financial statements and overdue annual returns.

The Ministry of Corporate Affairs (MCA) has notified an amendment to the Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016.

The amendment provides more clarity on the filing requirements of overdue financials before applying for strike-off.

As per the amended norms, a company cannot file a strike-off application unless it has filed overdue financial statements under section 137 and overdue annual returns under section 92, up to the end of the financial year in which the company ceased to carry out its business operations.

Previously, the MCA had removed the requirement for up-to-date financial results and annual returns, vide the amendment introducing the Centre for Processing Accelerated Corporate Exit.

However, this requirement has now been reintroduced. The present amendment shall be effective from 10.05.2023.

Annual Filing (i.e. AOC-4 and MGT-7) is required to be filed before applying for Strike off.

As per the amendment made in rule 4 in May 2019 and amendment made on May 2023 “no application in Form No. STK-2 shall be filed by a company unless it has filed overdue returns in Form No. AOC-4 (Financial Statement) or AOC-4 XBRL, as the case may be, and Form No. MGT-7 (Annual Return), up to the end of the financial year in which the company ceased to carry its business operations”

Therefore, after amendment in Rule 4 w.e.f. 08th May, 2019 read with notification dated 10th May 2023, annual filing of AOC-4 and MGT-7 is mandatory up to the end of the financial year in which the company ceased to carry its business operations. In other words, Company is required to file AOC-4 and MGT-7 up to financial year till company carries its business and operations.

MINISTRY OF CORPORATE AFFAIRS

NOTIFICATION

New Delhi, the 10th May, 2023

G.S.R. 354(E).—In exercise of the powers conferred by sub-sections (1), (2) and (4) of section 248 read with section 469 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following rules further to amend the Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016, namely:-

  1. Short title and commencement.- (1) These rules may be called the Companies (Removal of Names of Companies from the Register of Companies) Second Amendment Rules, 2023.

(2) They shall come into force on the date of their publication in the Official Gazette.

  1. In the Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016 (hereafter referred to as the principal rules), in rule 4, in sub-rule (1), the following provisos shall be inserted, namely: –

“Provided that the company shall not file an application unless it has filed overdue financial statements under section 137 and overdue annual returns under section 92, up to the end of the financial year in which the company ceased to carry its business operations:

Provided further that in case a company intends to file the application after the action under subsection (1) of section 248 has been initiated by the Registrar, it shall file all pending financial statements under section 137 and all pending annual returns under section 92, before filing the application:

Provided also that once notice under sub-section (5) of section 248 has been issued by the Registrar for publication pursuant to the action initiated under sub-section (1) of section 248, a company shall not be allowed to file the application under this sub-rule.”.

[F. No. 1/28/2013-CL-V(Part-III)]

MANOJ PANDEY, Jt. Secy.

Note: The principal rules were published in the Gazette of India, Extraordinary, Part II, Section 3 of Subsection (i), vide number G.S.R. 1174(E), dated the 26th December, 2016 and amended, vide Notification numbers G.S.R 355(E), dated the 12th April, 2017, G.S.R 350(E), dated the 8th May, 2019, G.S.R 420(E), dated the 29th June, 2020, G.S.R. 436(E), dated the 9th June, 2022 G.S.R. 658(E), dated the 24th August, 2022 and G.S.R. 298(E), dated 17th April, 2023.

ITR filing for AY 2023-24 starts. CBDT enables Excel Utilities for ITR-1, ITR-4

ITR filing for AY 2023-24 starts. CBDT enables Excel Utilities for ITR-1, ITR-4

For the assessment year 2023-24, the Income Tax Department has released an offline Excel-based utility for filing ITR-1 Sahaj and ITR-4 Sugam. The utility is available for download from the official Income Tax Department website. Because the utility and forms may change from time to time, it is critical to check the official website for the most recent version/updates and instructions.

The Excel-based utility for filing ITR-1 Sahaj and ITR-4 Sugam for AY 2023-24 is available for download from the Income Tax Department’s website – Released on 25-Apr-2023 and updated on 05-May-2023. The utility – Excel & Java, facilitates to electronically file ITR-1 and ITR-4 forms.

 

The instructions, utilities, schemas and validation rules will be updated as and when there is a change after due approval from ITD (Income Tax Department)

 General Instructions for Returns:

  1. Select the Assessment Year
  2. Download and extract the zip file containing the utilities to the folder and open the utility
  3. System Requirements:  Excel Utilities:

 The instructions, utilities, schemas and validation rules will be updated as and when there is a change after due approval from ITD

Using the Excel Utility

When using the Excel utility, it is critical to use a compatible version of Excel that supports macros. Resident and Ordinarily Resident (ROR) individuals with a total income of up to Rs 50 lakh from salaries, one house property, and other sources are eligible for ITR-1 Sahaj. Individuals/HUFs/partnership firms (other than LLP) with a total income of less than Rs. 50 lakh can file the ITR-4 Sugam form.

Using Macros in Excel

It is necessary to enable macros in the Excel sheet before using the ITR utility. To enable macros in Excel, navigate to File > Options > Trust Centre > Trust Centre Settings > Macro Settings > Enable All Macro > Click ‘OK’. Only enable macros in Excel sheets from trusted sources. Some Excel utility worksheets may include a help.txt file that contains instructions on how to enable macros.

Common Technical Problems

Macro errors, login issues, XML validation errors, and offline utility issues are some of the most common technical issues encountered when using the ITR utility. If you encounter any technical difficulties while using the ITR utility, you can seek assistance from the Income Tax Department Helpdesk or Tax Professional.

ITR Utility Customer Service

If you require technical assistance with the ITR utility, please visit the Income Tax Department’s official website and check the FAQs section for offline ITR utility. The FAQs section answers frequently asked questions about the ITR utility and can assist in resolving some technical issues. You can also get help from the Income Tax Department by calling their toll-free number or emailing them.

Conclusion

Filing ITR-1 Sahaj and ITR-4 Sugam using the Income Tax Department’s Excel utility can help to simplify the tax filing process. You can effectively file your taxes by downloading the utility, enabling macros in Excel, and understanding the requirements for using the utility. If you run into any technical difficulties or require assistance, the Income Tax Department and tax professionals are here to help.

Source: Income Tax Portal

CBDT extends due date for filing Income Tax Return for AY 2022-23 to Nov 7

Providing a relaxation to the tax payer, the Central Board of Direct Taxes has extended the deadline for filing income tax return for the assessment year of 2022-23 till November 7, 2022. The decision was taken on Wednesday. It is to be noted that the last date to file ITR for FY23 was October 31.

The Central Board of Direct Taxes (CBDT) said in a notification that the ITR filing due date has been extended as it had last month extended the deadline for filing audit reports.

Providing a relaxation to the tax payer, the Central Board of Direct Taxes has extended the deadline for filing income tax return for the assessment year of 2022-23 till November 7, 2022. The decision was taken on Wednesday. It is to be noted that the last date to file ITR for FY23 was October 31.

CBDT extends the due date for furnishing Income Tax Return for AY 2022-23 to 7th November, 2022 for certain categories of assessees in consequence of extension of due dates for filing various reports of audit. Circular No. 20/2022 dated 26.10.2022 issued.

CBDT’s extension of due date for filing of Income Tax Return (ITR) for Assessment Year 2022-23 from 31/10/2022 to 07/11/2022 applies to the following assesses:

a) Companies
b) Persons subject to Tax Audit or Audit under any other law
c) Partner of Firm which is subject to Tax Audit
d) Other specified persons whose due date of filing the return of income is 31/10/2022.

Source: CBDT Circular

Small Companies thresholds further increased by MCA (Paid-up Capital/ Turnover)

MCA has further revised/ increased the ‘paid-up capital’ and ‘turnover’ thresholds applicable in the case of ‘small companies’ under the Companies Act, 2013, to reduce compliance burden for more number of companies to be treated as ‘small companies’, as part of ‘ease of doing business’ initiative.

Earlier, the definition of “small companies” under the Companies Act, 2013 was revised by increasing these thresholds, i.e. paid up capital threshold was increased from not exceeding Rs 50 lakh to Rs 2 crore and turnover threshold was increased from not exceeding Rs 2 crore to Rs 20 crore.

These thresholds, now have been further revised/ increased to amend the definition of small companies, so that more number of companies can be treated as ‘small companies’, eventually to reduce their compliance burden. Now the paid up capital threshold has been increased from not exceeding Rs 2 crore to Rs 4 core and turnover threshold has been increased from not exceeding Rs 20 crore to Rs 40 crore, which effectively means that number of small companies will increase substantially.

In the recent past, MCA has taken several initiatives/ measures in the direction of ease of doing business for corporates, like decriminalization of various provisions of the Companies Act, 2013/ LLP Act, 2008, extending fast track mergers to start ups, incentivizing incorporation of One Person Companies (OPCs) etc.

Lakhs of small companies significantly contribute to the growth of Indian economy and generation of employment. Therefore, Government is making continuous efforts by such initiatives/ measures which create a more conducive business environment for law-abiding small companies, by reducing their compliance burden so that they can focus more on their core business.

It may be noted that small companies are eligible for certain benefits/ relaxations, in the form of reduced compliance burden, some of which are listed hereunder:

i) No need to prepare cash flow statement by small companies, forming part of financial statement,

ii) Advantage of preparing and filing an Abridged Annual Return,

iii) Mandatory rotation of auditor not required,

iv) An Auditor of a small company is not required to report on the adequacy of the internal financial controls and its operating effectiveness in the auditor’s report,

v) Holding of only two board meetings in a year,

vi) Annual Return of the company can be signed by the company secretary, or where there is no company secretary, by a director of the company,

vii) Lesser penalties for small companies, etc.

In view of the fact that ‘paid up capital’ and turnover’ thresholds applicable for ‘small companies’ under the Companies Act, 2013 have been further revised/ increased, this will allow more number of companies to enjoy relaxation from certain compliance burdens.

The definition of ‘small companies’, the MCA has issued Notification dt. 15/09/2022 on Companies (Specification of definition details) Amendment Rules, 2022..