Higher Additional Fees for delayed filings of Form PAS-3 and INC-22 - MMJC

Background

Section 403 deals with the filing fees to be paid on any document required to be submitted, filed, registered, or recorded under the Companies Act, 2013 (‘the Act’). Before Companies (Amendment) Act, 2017 (CAA, 2017), proviso to Section 403 mentioned that after the time specified in the relevant section under the Act for filing a particular document, it may be filed by companies within 270 days from the date on which it should have been filed by payment of additional filing fees specified in Rule 12 of the Companies (Registration Offices and Fees) Rules, 2014 (‘Rules’).

However, post Companies (Amendment) Act, 2017, this proviso was deleted. This led to an ambiguity that if a company missed filing any document within the time specified in the relevant section, whether it be filed in delay or not!!! It may be noted that the Table B of these Rules (fees prescribed for documents other than an increase in authorized share capital, charge related filings, and filing of financial statements and annual returns) mentioned about additional filing fees for documents filed after the timeline prescribed for filing in the relevant section(s).

Now, the Ministry of Corporate Affairs (MCA) vide notification dated 11th January 2022 notified amendments w.r.t. Section 403 which were proposed in Companies (Amendment) Act, 2017 and Companies (Amendment) Act, 2020 w.e.f. 1st July 2022,  pursuant to which 2^nd Proviso and 3^rd Proviso to Sec. 403(1) is made effective.

The 2^nd Proviso to Sec. 403 enables Central Government (‘CG’) to allow Companies to file returns or documents after the due date prescribed in the relevant section(s), with payment of additional fees as prescribed in the above-mentioned Rules. This proviso also mentions that this shall be without prejudice to any other legal action or liability under the Act. Hence, it clarifies that even after payment of additional fees under the Rules, any legal action may be taken for the delay in said filing.

Further 3^rd proviso to Sec. 403 inserted by Companies (Amendment) Act, 2020 states about charging of higher additional fees as may be prescribed in case of default on two or more occasions in the filing of a certain document(s) as MCA will prescribe.

Accordingly, Annexure I (Part B – Fees for Forms other than forms related to Increase in Authorised Capital, Charges and Annual Filing forms) to Rule 12 of Companies (Registration officers and Fees) Rules is substituted w.e.f. 1^st July, 2022 to prescribe higher additional fees for certain forms (as explained below) on which such higher additional fees will be charged.

In brief, the impact of amendment is as follows:

Impact of Amendment

• Forms prescribed for levy of Higher Additional Fees – Form INC-22 (Shifting of Regd. Office) and Form PAS-3 (Return of Allotment)
• When higher additional fees will be charged – If Company fails to file prescribed Forms within due date on two or more occasions within a period of 365 days from the date of filing of the last such belated e-form for which such fees are payable
• Forms which are excluded from the purview of higher additional fees – Form related to Increase in Nominal Share capital, all Charge related forms , all Annual Filing Forms (filed u/s 92 and 137) are excluded
• Whether additional Fees prescribed for other forms will also be leviable? – No, it is clearly mentioned that existing additional fees as applicable for other delayed forms shall not be charged for forms where higher additional fee is payable.
• Applicable from the period: As effective date of notification is 1^st July, 2022, higher additional fees will be applicable for the forms filed in delay on or after 1^st July, 2022.

Although Ministry has prescribed only 2 forms for the time being for higher additional fees, it may come up with a list of more forms for which higher additional fees may be levied in the above-mentioned cases.

Therefore, it is of utmost importance to file all pending forms on a priority basis and in the future too.

Link of relevant Notifications:

https://www.mca.gov.in/bin/dms/getdocument?mds=%252F1gywEL3uai%252Fowv0QtPAKw%253D%253D&type=open (Notification CAA, 2020)

https://www.mca.gov.in/bin/dms/getdocument?mds=O7YNA0Zg2jjii0fhNar4%252Bw%253D%253D&type=open (Notification CAA,2017)

https://www.mca.gov.in/bin/dms/getdocument?mds=%252FwqhpSXC6%252BFxaMTdJJWnnA%253D%253D&type=open (Notification amending Rules)