Penalty Relief for Delayed Company Filings
A recent adjudication order from the Regional Director, Hyderabad, has provided significant relief to a company and its directors facing penalties for delayed filing of a crucial document. The case involved Chalasanis Hospitals Private Limited and its directors, who appealed against a penalty imposed by the Registrar of Companies (ROC), Vijayawada, for failing to file the return of allotment (Form PAS-03) within the stipulated timeframe, a violation of Section 42(9) of the Companies Act, 2013.
Understanding the Appeal and the Ministry’s Circular
The appeal, filed under Section 454 of the Companies Act, 2013, highlighted a key point: a portion of the delay was attributable to technical issues with the Ministry of Corporate Affairs (MCA) portal. The appellants presented a Ministry of Corporate Affairs circular, General Circular No. 4/2023 dated February 21, 2023. This circular extended the deadline for filing the PAS-03 e-form until March 31, 2023, specifically addressing the portal-related challenges faced by companies.
Recalculating the Delay and Reducing the Penalty
The adjudicating authority acknowledged the validity of the appellants’ argument concerning the MCA circular. Consequently, the period covered by the circular, from January 2023 to March 31, 2023, was exempted from the calculation of the delay. The actual period of default was then recalculated from April 1, 2023, to July 4, 2023, amounting to 95 days.
Based on this revised delay period, the original penalty of ₹5,40,000 was significantly reduced. The penalty was recalculated at a rate of ₹1,000 per day of default. This resulted in a revised penalty of ₹95,000 for the company and ₹95,000 for each of the defaulting directors, Ms. Vijaya Lakshmi Chalasani and Mr. Saileesh Chalasani, bringing the total revised penalty to ₹2,85,000.
Key Details of the Adjudication Order
The ROC, Vijayawada, had initially imposed a penalty of ₹1,80,000 on the company and ₹1,80,000 on each of its directors, totaling ₹5,40,000. The appeal was filed on March 31, 2025, against the adjudication order dated February 24, 2025.
Following the revised penalty calculation, the appellants have complied by paying the reduced amount. The order, dated April 22, 2026, directs the appellants to rectify the default and pay the penalty within 60 days of receiving the order. Failure to comply could lead to further action under Section 454(8) of the Companies Act, 2013.
The order also specifies that the penalty must be paid from the personal sources or income of the appellants. The ROC Vijayawada has been instructed to initiate necessary actions in case of non-payment within the stipulated timeframe.
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Readers should treat this as a tax and compliance update, not as personal advice.
This article is for general information based on available source information. It should not be considered legal, tax, investment, or financial advice.