Penalty imposed on Company as it failed to file INC-20A

The Ministry of Corporate Affairs(MCA) in the matter of M/s. Gujarat Chinese Enterprises Association has imposed Penalty on Company as it failed to file INC-20A.

M/s. GUJARAT CHINESE ENTERPRISES ASSOCIATION (herein after referred to as “company”) is a company having its registered office at “F/402, Ashavari Tower, 8/H Wide Angel Cinema, Nr Fun Republic, Satellite, Ahmedabad, Gujarat-380054, India” registered under the provisions of the Companies Act, 2013. The CIN of the Company is U85200GJ2019NPL111510.

During the Financial Year 2021-22, after verification of MCA21 portal record, it has observed that the Company was incorporated on 19.12.2019. Under the mandate contained in section 10-A of the Companies Act, 2013, the prescribed e-form i.e. INC-20A duly verified by a Company Secretary or a Chartered Accountant or a Cost Accountant in practice was required to be filed by the company within a period of 180 days of the date of incorporation. Ministry of Corporate Affairs vide General Circular No. 11/2020 dated 24.03.2020 has taken special measure for providing relaxation additional 180days. So company was required to file the aforesaid compliance i.e. latest by 16.12.2020 (herein after referred to be the “last due date”). The company has failed to file the e-form INC-20A and therefore, default has occurred in complying with the aforesaid statutory provisions by non-filing of the declaration of commencement of business (INC-20A) within the prescribed statutory period and for such default the Company and every officer who is in default are liable for penalty under Section 10A of the Act.

Under the above circumstances, it is concluded that the company and its Officers in default are liable for penalty under 10A(2) of the Companies Act, 2013 for non-filing of declaration of commencement of business (INC-20A) of the Company viz. GUJARAT CHINESE ENTERPRISES ASSOCIATION and the undersigned has reasonable cause to believe that the company and its officers have violated the provisions of Section 10A (1)(a) of the Companies Act, 2013 as noticed from the MCA21 portal record. In view the facts narrated above, the company and its directors /officers, in default are liable for penalty as per Section 10A (2) of the Companies Act.

While adjudging quantum of penalty under section 10A (2) of the Act, the Adjudicating Officer shall have due regard to the following factors, namely;

a. The amount of disproportionate gain or unfair advantage, whenever quantifiable, made as a result of default.

b. The amount of loss caused to an investor or group of investors as a result of the default.

c. The repetitive nature of default.

The Presenting Officer further submitted that with regard to the above factors to be considered while determining the quantum of penalty, it is noted that the disproportionate gain or unfair advantage made by the noticee or loss caused to the investor as a result of the delay on the part of the notice to redress the investor grievance are not available on the record. Further, it may also be added that it is difficult to quantify the unfair advantage made by the noticee or the loss caused to the investors in a default of this nature.

The Presenting Officer further submitted that it is observed that company is registered under Section 8 of the Companies Act, 2013, in pursuant to first proviso of Section 2(85) of the Companies Act, 2013, the company does fall under the ambit of a “small Company”. Therefore, the provisions of imposing lesser penalty as per the provisions of Section 4468 of the Companies Act, 2013 do not applied to the company.

Having considered the facts and circumstances of the case and submissions made by the Presenting Officer and reply dated 17.03.2022 submitted by company and after taking into accounts the factors above, Penalty of Rs.250000 imposed on company and its directors as prescribed under Section 10A (2) of the Companies Act, 2013 for violation of section 10A (1) of the Companies Act, 2013.

The noticee shall pay the amount of penalty individually for the company and its officers from their personal sources/income by way of e-payment available on Ministry website under “Pay miscellaneous fees” category in MCA fee and payment Services under Rule 3(14) of Company (Adjudication of Penalties) (Amendment) Rules, 2019 and the Challan/SRN generated after payment of penalty through online mode intimation shall be filed in INC-28.

Company /Officers are further directed to file the overdue declaration of commencement of business (INC-20A) as per the requirement of Section 10A(1) of the Companies Act, 2013 along with applicable fee/additional fee as the case may be, failing which this office shall be proceeded further the matter in pursuant to Section 454A of the Companies Act, 2013 for the non-compliance of the aforesaid provisions of the Companies Act, 2013.

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