Violation of Provisions of S. 10(A) of Companies Act: MCA directs to pay penalty imposed within 90 days [Read Order]

The Ministry of Corporate Affairs( MCA ) directed the notified officers in default/ noticee to pay a penalty imposed within 90 days for violation of Provisions of section 10(A) of the Companies Act, 1956/2013.

Day 1 Advisors Private Limited [ Company], is a company registered with this office under the Provisions of the Companies Act, 2013/1956 having its registered office at New Delhi Delhi. The Company has filed Suo-moto for adjudication in e-form GNL-1.

The Adjudication Application made under Section 454 of the Companies Act, 2013 for violation of Section 10(A). The company was incorporated on 24.11.2020 and in terms of provision of Section 10A, the company was required to file form INC-20A on or before 23.05.2021 i.e., within 180 days from the date of incorporation.

The Company has stated that it was unable to file E-Form INC 20A within the prescribed period of 180 days due to lack of professional guidance and knowledge. The said E-Form INC-20A was filed with a delay of 59 days i.e. (From 24.05.2021 to 20.07.2021).

The adjudication officer has reasonable cause to believe that the subject company has not complied with the provision of section 10(A) of the Companies Act, 2013. The Company and the Noticees are hereby called upon to show cause as to why penal action under Section 10A (2) of the Company Act, 2013 should not be initiated for the alleged violation of the provisions of the section 10(A) of the said Act.

The company and its officers requested physical hearing in the matter in its reply to the e-SCN and the same was scheduled/convened on 29.08.2025. Mr. Yashoaj Guglani, Advocate (Authorised Representative) appeared for the hearing. E.Order:

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Whereas the company has filed suo-moto application for adjudication of penalties for default u/s 10A(1)(a) of theCompanies Act, 2013. Keeping in view the facts about the case e-SCN was issued to the company and the officers-indefault on 13.06.2025 for the default under section 10A(1)(a) of the CA, 2013. The response to the notice was submitted on 26.06.2025.

In the reply, the company and the office-in-default accepted the non-compliance and have stated that the default occurred due to an inadvertent oversight and requested to consider the matter with leniency as the default was unintentional.

Further, it was submitted that the company qualifies as a 'small company' and thus, benefit under section 446B in imposition of penalty is applicable on them. iii.Whereas as per filings made by the company on MCA Registry, it is observed that for FY 2022-23 (default financial year), paid-up share capital & turn-over of the company is Rs. 1,00,000/- and Rs. 39,646,600/- respectively, and it does not exceed the threshold limit prescribed under section 2(85) read with Rule 2(1)(t) of Companies (specification of Definitions Details rules.2014. Therefore, the subject company is covered under the purview of small companies as defined under section 2(85) of the Act, 2013 and hence, the benefit of section 446B would be applicable on the company.

The authority observed that the company was delayed in filing INC-20A by 59 days (i.e. 24.05.2021 to 20.07.2021) and resulted in non-compliance of section 10A(1). The penalty is imposed on the company and the officers-in-default as per section 10A (2) r/w 446B of the Act subject to the condition that the same is disclosed in the coming Board Report to maintain the necessary disclosures under Corporate Governance. Further, the submission of the company granting remission in the penalty is not acceded to.

The authority directed the notified officers in default/noticee shall rectify the default mentioned above and pay the penalty, so applicable within90 days of receipt of the order. It is also directed that the penalty so imposed upon the officers in default shall be paid from their personal sources/income.

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