[Opinion] Company & MD penalized for not disclosing DIN in the financials filed with MCA
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- 2 Min Read
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- Last Updated on 13 March, 2023
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Prof R Balakrishnan – [2023] 148 taxmann.com 172 (Article)
1. Background of the case
This is a case involving an appeal filed with the Regional Director of Southern Region against the order passed by the Registrar of Companies/Adjudication Officer of Chennai vide his adjudication order No. RoC/CHN/Shri Narayani/ADJ/order/sec.158/2022 dated 20th December 2022 under section 454 (3) for default committed under section 158 of the Companies Act, 2013 in the matter of M/s. Shri Narayani Nidhi Limited situated at Thiruvarur of Tamil Nadu.
Upon hearing the appeal, the Regional Director slashed the penalty amount from Rs 3,00,000 lakhs to Rs. 1,20,000 and we shall go through this case in details in order to understand the rationale behind the reduction in penalty granted by the Regional Director.
2. Details of the company
M/s. Shri Narayani Nidhi Limited incorporated on 13th July 2012 under the provisions of the Companies Act 1956 having its registered office at No. 28A Kamalalayam Vadakarai, Thiruvarur in the state of Tamil Nadu. The company falls under the jurisdiction of Registrar of Companies of Tamil Nadu and the office of the Registrar is situated at Chennai. The company is currently having five directors on its board and one of them is the managing director. The company is involved in the activities of legal, accounting, book-keeping and auditing activities; tax consultancy; market research and public opinion polling; business and management consultancy etc.
3. Relevant provision of the Companies Act relating to this case
As per the sub-section (1) of section 158 of the Companies Act, 2013, every person or company, while furnishing any return, information or particulars as are required to be furnished under the Companies Act 2013, shall have to mention the Director Identification Number (DIN) in such return, information or particulars in case such return, information or particulars relate to the director or contain any reference of any director.
4. Default committed by the company
The company in question i.e. M/s. Shri Narayani Nidhi Limited situated at Thiruvarur of Tamil Nadu had failed to indicate the Directors Identification Number in the financial statements submitted to the Ministry of Corporate Affairs via the MCA portal for the years. The Registrar of Companies on his routine scrutiny observed that the directors of the company signing the financial statement have not mentioned their Director Identification Number (DIN) in the documents attached with e-form AOC-4 for the financial years 2014-15, 2016-17 and 2017-18 respectively. Obviously, not mentioning the Directors Identification Number is a violation of the provisions of sub-section (1) of section 158 of the Companies Act 2013.
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