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January 9, 2021

KSCAA Request for Extension of CFSS 2020 and LLP Settlement Scheme 2020

by CA Shivam Jaiswal in Circular and Notifications

KSCAA Request for Extension of Companies Fresh Start Scheme i.e. CFSS 2020 and LLP Settlement Scheme 2020

The Karnataka State Chartered Accountants Association (in short ‘KSCAA’) is an association of Chartered Accountants, registered under the Karnataka Societies Registration Act, in the year 1957. KSCAA is primarily formed for the welfare of Chartered Accountants and represents before various regulatory authorities to resolve the problems faced by chartered accountants and business community.

We congratulate and applaud the efforts of Ministry of Corporate Affairs, Government of India for introducing CFSS 2020 with a view to bestow a chance to all the Companies to complete their pending compliances without the requirement of paying additional fees and penalty, and also to provide immunity from prosecution. This is a major step in the right direction from the Government which provides an excellent opportunity for all the Companies to regularize their pending compliances and to make a fresh beginning with a clean slate in the statutory compliances as required under Companies Act, 1956 and Companies Act, 2013. The said CFSS 2020 was in operation from 01-04-2020 to 31-12- 2020 (As per General Circular No. 12/2020, dated 30-03-2020 and General Circular No. 30/2020 dated 28 September, 2020). We would like to convey our sincere gratitude to your good selves for cognizing the Covid-19 pandemic situation in the country and positively responding to our earlier representation by providing an extension of CFSS 2020 from earlier last date of 30-09-2020 to new last date 31-12-2020.

Perhaps your good selves may be aware that during last few days of the last date 31-12- 2020 for CFSS 2020, professionals and companies all over the country have faced severe technical problems in the operation of MCA Portal while filing necessary forms which had handicapped all of them from timely completion the various compliances covered by CFSS 2020. The Kinds of problems faced on the MCA portal include login errors, auto-­logouts, payment failures, and a very slow response from the MCA Portal. These technical problems were completely unforeseen & unprecedented and as a result of which, many of professionals/companies could not file the forms under the scheme despite having kept all documentation ready for submission.

Furthermore, the e-Form MGT-7, being the annual return as prescribed u/s 92 of the Act was revised by MCA and the same was provided on the MCA portal on the very last day of CFSS 2020 that is on 31st December, 2020. This had further added to the prevailing trouble situation and has made it literally difficult for many professionals/companies to work on the revised form as they have already spent enormous resources on the erstwhile form and the same kept ready for submission to MCA and they have were left absolutely little time to re-work on the updated revised form.

In any other normal year, the due dates for Income Tax filings, GST Audit filings, GST Annual filings and MCA related filings would fall on different dates. However, in this pandemic year, all the above four filing dates have fallen due on the same date i.e. 31-12- 2020. This was further compounded by the fact that many of the professionals, employees of the clients, and employees of the Chartered Accountant offices were restricted from office duty due to lockdown restrictions during the period between March 31st 2020 and December 31st 2020, which varied across different cities and states. It is being duly noted, that for the upload of the MCA related filings, physical presence of the DSC holders and office computer resources are mandatorily required. The lockdown restrictions and restrictions of people movement were also removed only in the last 2 months starting from November 1st 2020. So, while in theory, there was a 9 month period for completing the various filings, however in fact most of the Professional’s offices were left effectively with only two months of viable period where they could operate their offices with limited resources.

As the late filing fees applicable for various non-compliances covered by CFSS 2020 on or before 31-12-2020 runs in to extremely huge sums which would be an unbearable burden for companies especially in segments namely micro, small and medium who are already under tremendous financial stress due to Covid-19 pandemic, we therefore hereby sincerely urge your good selves not to penalize companies who were willing to complete the pending compliances on or before 31-12-2020, but for technical problems on the MCA portal could not complete the same. As Also, albeit the situation of Covid-19 pandemic has subsided a little, it A still not completely gone and the related fear factor is still prevalent and continues to impact the normal operations of many companies in the country and thus many of those companies are although willing to complete the pending non-compliances by availing this amnesty scheme under CFSS 2020 but are unable to At so as their business operations are still on normal track.

In view of genuine hardships which have arisen due to Technical Issues with MCA 21 Portal as explained in the foregoing paragraphs, we at Karnataka State Chartered Accountants Association on behalf of Fellow Professionals and Companies hereby request your good selves to kindly consider our request and extend the validity of the CFSS 2020 at least by 3 months until 31. March, 2021.

We also request your good selves to please provide a similar relief to LLPs who are covered under LLP Settlement Scheme 2020 by General Circular 13/2020, dated 30thMarch, 2020, General Circular No. 31/2020 dated 28th September, 2020 and General Circular No. 37/2020 dated 9th November, 2020.

For Karnataka State Chartered Accountants Association

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