Anonymous
Asked June 21, 2016

Filing of Cost Audit Report

  • 1 Answer
  • 973 Views

We have received a Show Cause Notice from ROC under Section 233B(7) of the Companies Act, 1956 regarding filing of Cost Audit Report with Central Government for the financial year ended on 31.03.2012, 31.03.2013, 31.03.2014 and 31.03.2015. Below are relevant facts.

For Financial Year 2011 – 2012 (31.03.2012)

Form 23C – Intimation of Appointment of Cost Auditor ----- Filed

Form 23D – Intimation by Cost Auditor to Central Government ----- Not Filed

I-XBRL – Filing of Cost Audit Report with Central Government ----- Filed

For Financial Year 2012 – 2013 (31.03.2013)

Form 23C – Intimation of Appointment of Cost Auditor ----- Not Filed

Form 23D – Intimation by Cost Auditor to Central Government ----- Filed

I-XBRL – Filing of Cost Audit Report with Central Government ----- Not Filed

For Financial Year 2013 – 2014 (31.03.2014)

Form 23C – Intimation of Appointment of Cost Auditor ----- Filed

Form 23D – Intimation by Cost Auditor to Central Government ----- Filed

I-XBRL – Filing of Cost Audit Report with Central Government ----- Not Filed

For Financial Year 2014 – 2015 (31.03.2015)

Form CAR – 2 – Intimation of Appointment of Cost Auditor ----- Not Filed

Form CAR – 4 – Filing of Cost Audit Report with Central Government ----- Not Filed

 

Now what should I do in this case. How should I proceed for compounding the offence or if I get the Report from Cost Auditor in back date then is it possible to pray the ROC for allowing us to file this Report as it was inadvertently left out at cost. Kindly guide with procedure and legality. Thanks

Answer 1

You can opt for compounding under S. 621A of the Companies Act, 1956[1]. You can convey your intension for compounding via a reply to the show cause notice by ROC[2]. You can make good the defaults by filing the required documents, as soon as possible, by filing all the required forms as per the Companies Act, 1956, along with the following costs involved:

  • Intimation of Appointment of Cost Auditor.
  • For Financial Year 2012-2013
  • General Circular No. 15/2011 [3]regulates the provision regarding Intimation of Appointment of Cost Auditor.

  • If the company has contravened the provisions of this circular and led to the non-filing of Form 23C - Intimation of Appointment of Cost Auditor, the company and every officer who is in default shall be punishable with a fine which may extend to five hundred rupees and with a further fine of fifty rupees for every day after the first during which such contravention continues, i.e., after 01/04/2012 till the date of filing, as provided under S. 642(2) of the Companies Act, 1956[4]. This provision is to be read with S. 209(5)[5] and S. 209(7)[6] and S. 233B(11)[7] of the Companies Act, 1956 according to which the responsible person may be liable to imprisonment which may extend to six month or a fine which may extend to one thousand rupees or both and also the company may be liable to a fine which may extend to five thousand rupees and every officer will be liable to imprisonment which may extend to five years or a fine of five thousand rupees or both.
  • If the default is made by the Cost Auditor in complying with the provisions of this circular, leading to the non-filing of Form 23C, he shall be punishable with fine, which may extend to five thousand rupees.
  • For Financial Year 2014-2015
  • The Companies (Cost Record and Audit) Rules 2014[8] provides that the companies covered under the Cost Audit category has to intimate the Central Government through electronic mode in the form CRA-2. The delay fees are regulated by The Companies (Registration and fees) Rules, 2014. However, the General Circular No. 08/2015[9] waived this delay fees till 30th June, 2015 due to unavailability of the CRA-2 form. Hence, you will are liable to pay the delay fees from 1st July 2015 till the filing of the form.

  • Intimation by Cost Auditor to Central Government.
  • For Financial Year 2011-2012
  • General Circular No. 15/2011 regulates the provision regarding intimation by Cost Auditor to Central Government as well.

  • If the company has contravened the provisions of this circular and led to the non-filing of Form 23D - Intimation by Cost Auditor to Central Government, the company and every officer who is in default shall be punishable in a manner similar to the situation of failure to file Form 23C as discussed above.
  • If the default is made by the Cost Auditor in complying with the provisions of this circular, leading to the non-filing of Form 23D, he shall be punishable with fine, which may extend to five thousand rupees.
  • Filing of Cost Audit Report with Central Government.
  • For the Financial Year 2012-2013 and 2013-2014
  • The Companies (Filing of Documents and Forms in Extensible Business Reporting Language) Rules, 2011 [10]regulates the filing of Cost Audit Report with the Central Government during this period. The filing process is guided by the provisions under S. 233B(4) and S. 209(1)(d) of the Companies Act, 1956 and delay penalty is regulated by these provisions and rules in a similar manner as described above.

  • For the Financial Year 2014-2015.
  • The Companies (Cost Record and Audit) Rules 2014 provides that the companies covered under the Cost Audit category has to intimate the Central Government through electronic mode in the form CRA-4. The delay fees are regulated by The Companies (Registration and fees) Rules, 2014. However, the General Circular No. 08/2015 waived this delay fees till 31st August, 2015 due to unavailability of the CRA-4 form. Hence, you will are liable to pay the delay fees from 1st September 2015 till the filing of the form.

     

     

     

     

     

    [1] Available at: https://indiankanoon.org/doc/1329904/.

    [2] Format available at: https://docs.google.com/viewer?a=v&pid=forums&srcid=MTc5MTQwNjAwMTkzNzM4MjIwODMBMDc5MzEwMzgyMzg5OTYzNDAwMDABUXVXY004RmU1YjBKATAuMQEBdjI

    [3] Available at: http://www.mca.gov.in/Ministry/mcaoffices/CAB_Circular_15-2011_11Apr2011.pdf

    [4] Available at: https://indiankanoon.org/doc/1154644/

    [5] Available at: https://indiankanoon.org/doc/84185/

    [6] Ibid

    [7] Available at: https://indiankanoon.org/doc/1341522/

    [8] Available at: http://icmai.in/upload/Students/Circulars/Companies-Rules-2014.pdf

    [9] Available at: http://www.mca.gov.in/Ministry/pdf/General_Circular_8-2015.pdf

    [10] Available at: http://www.mca.gov.in/Ministry/pdf/GSR_XBRL_Notification_30nov2012.pdf

     

     
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