Filed on Time: Building a Compliance Culture

The Calendar Assembled

Sixty-one dates fit on a single sheet of A3 paper if the type is set at eight points and nobody minds squinting. I know this because in the first week of January 2026 I printed one for the Hinjewadi payments firm, whose chief financial officer had now been through four chapters of this book in person and wanted, reasonably, to see the whole of it at once. The sheet had four columns: the date, the obligation, the statute, and a fourth headed 'Owner'. The first three I could fill from the law. The fourth I left blank, and that was deliberate.

What follows is that company's year as it stood at 1 January 2026, a private company with just over seventy employees, foreign investment on its books and a listing still only in a merchant banker's slides. A manufacturer would have consents to operate where this firm has none; a jeweller would have FIU-IND reports. The shape holds all the same.

Calendar. Every month, tax deducted at source is deposited by the seventh (for March, by 30 April), GSTR-1 is filed by the eleventh, provident fund and ESI contributions are paid by the fifteenth, and GSTR-3B is filed by the twentieth. Every quarter, TDS returns follow by the last day of the month after the quarter ends, except the fourth quarter, which is due on 31 May. Advance tax falls due on 15 June, 15 September, 15 December and 15 March. MSME-1 goes in by 30 April and 31 October if any supplier registered as a micro or small enterprise remains unpaid beyond forty-five days. DPT-3 is due by 30 June, and the FLA return to the Reserve Bank of India by 15 July. The tax audit report and DIR-3 KYC for every director fall due by 30 September, which is also the last day for the annual general meeting. AOC-4 follows within thirty days of the meeting and MGT-7 within sixty. The income tax return is due by 31 October, or 30 November if transfer pricing applies. GSTR-9 and GSTR-9C go in by 31 December, and the POSH annual report to the District Officer in January. Four board meetings are held across the year, with no more than 120 days between any two. Event-driven filings sit beside all of this: FC-GPR within thirty days of any allotment to a foreign investor, DIR-12 within thirty days of any change in directors. Breach reporting under the Digital Personal Data Protection Rules joins them when those provisions commence.

Two caveats belong on the sheet itself, and I printed them in red. From 1 April 2026 the Income-tax Act, 2025 replaces the 1961 Act, and the section numbers in the third column change even where the dates do not. The Labour Codes are in force, but Maharashtra's rules are not final, so the provident fund and ESI lines still cite forms that will be renamed.

The CFO read the sheet twice. He counted the rows with the cap of his pen, which I have seen many clients do and none admit to.

'Sixty-one,' he said. 'And this is for a company that has not even listed.'

'This is the floor,' I said. 'Listing adds a second sheet.'

He turned the paper sideways, as if the fourth column might fill itself at a different angle. Then he took the pen and, against the first row, the TDS deposit on the seventh, wrote 'Accounts'.

I crossed it out.

One Name per Obligation

'Accounts is a room,' I said. 'It has four people in it and a kettle. The law does not prosecute rooms.'

He took the point more quickly than most. A department cannot be sent a show-cause notice, cannot sign a declaration and cannot be fined. Section 2(60) of the Companies Act, 2013, which defines the 'officer who is in default', is written entirely in the singular. It names the whole-time director, the key managerial personnel, and, where a company has none, the director or directors the board has specified and who have consented in writing to that specification. Failing any such specification, it names every director. It then reaches further down the organisation, to any person who, under the immediate authority of the board or a key managerial person, is charged with maintaining, filing or distributing records and who knowingly permits a default. The statute does not ask which team was responsible. It asks which person.

So I advise that the fourth column hold a name, and only one. Two names on one row produce the outcome I have watched in a dozen companies: each assumes the other has filed. The CFO wrote 'Mrunal' against the TDS deposit, the accounts executive who already prepared the challans, and then paused at DIR-3 KYC.

'Every director has to do their own,' he said. 'So whose name?'

'The person who chases them,' I said. 'The director signs. Someone has to make sure he signs before the thirtieth.'

That distinction took most of an hour to apply across sixty-one rows. The owner of an obligation does not always perform it. The statutory auditor certifies the tax audit report; the owner is whoever ensures the auditor has the ledgers by July. The owner is the person who will notice first if the date passes and who has the authority to do something about it. By the end the column held seven names. His own appeared nineteen times, which he did not enjoy, and the founder's appeared four times, against the board meetings, which the founder did not yet know.

Ownership without reporting decays within a year, usually at the first resignation. Here the floor and the ceiling must be kept apart. Section 205 requires a company secretary, where the company has one, to report to the board on compliance with the Act and the rules under it. A listed company's board must, under Regulation 17(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, periodically review compliance reports covering all applicable laws. This private company, with paid-up capital under ₹10 crore, was not yet obliged to employ a whole-time company secretary at all. Anything its board received would be governance ceiling, adopted by choice.

I advise one page, tabled at every board meeting, listing only what fell due since the last meeting, what was filed and on which date, what is late, and the owner's name against each late item. It should not be a colour-coded dashboard. Directors who receive forty green cells learn to stop reading, and Section 2(60)'s reference to knowingly permitting a default was not drafted with tired eyes in mind.

The CFO photographed the sheet before he left, then asked for a clean copy with the fourth column filled.

'Print Mrunal's name larger,' he said. 'She has to see it from the door.'

Decriminalisation without Absolution

The managing director of the Chakan firm, whose Section 454 notice arrived in March 2024, had expected to hear the word 'prosecution'. He heard 'penalty' instead, and for about a week he treated the difference as good news. It was, in part.

The Companies (Amendment) Act, 2019 moved sixteen offences out of the criminal courts and into an in-house process under Section 454 of the Companies Act, 2013. The Registrar of Companies, acting as adjudicating officer, issues a notice, hears the company and imposes a fixed penalty by order. An appeal lies to the Regional Director within sixty days. The Companies (Amendment) Act, 2020 went further. It removed or converted a second batch of offences and inserted Section 446B, which halves the penalty for small companies, one person companies, producer companies and start-ups, subject to a ceiling of ₹2 lakh for the company and ₹1 lakh for each officer in default. The Jan Vishwas (Amendment of Provisions) Act, 2023 carried the same idea across forty-two central statutes, among them the Air Act and the Environment (Protection) Act, where imprisonment for many procedural contraventions gave way to monetary penalties set by an adjudicating officer. A second Jan Vishwas Bill was introduced in August 2025. As I write it has not been enacted, and I do not know what it will finally contain.

What changed is the mechanism. A criminal complaint needed a prosecutor, a magistrate and a court diary measured in years, and for minor defaults it was rarely worth anyone's trouble. An adjudication order needs a Registrar with a portal that flags overdue filings automatically. The Chakan firm's notice came because the system had already counted the days. When I began practice, a late annual return produced, at most, a letter that might be followed by a complaint that might be heard. Now it produces an order, and the order is uploaded to the Ministry's website under the company's name, where any lender's analyst can find it in under a minute.

What did not change is the list of things that still sit outside the decriminalised zone. Fraud under Section 447 remains punishable with imprisonment of six months to ten years. Section 164(2) still disqualifies directors of a company that has not filed for three continuous financial years, and that consequence was never a fine to be converted: it is a bar. Additional fees under Section 403 still accrue at ₹100 per day for each late form. A penalty paid under Section 454 does not cure the default either. The form must still be filed, the meeting still held. If it is not, the penalty notice is followed by another.

So the price of default is lower per instance and paid far more often. That is my reading, and it is an argument rather than a statute. A company that once calculated that prosecution was unlikely now faces a near-certain penalty, smaller than the fear but larger than the filing fee it saved.

The Chakan managing director understood this at the hearing, when the adjudicating officer read out the amounts for the company and then, separately, for each officer in default by name.

'Separately?' he asked.

'Each officer,' the officer said. 'Please check the spelling on the order.'

Coming Back from Default

Most of my working life has been spent on this part of the subject, though no syllabus ever taught it. Clients rarely arrive before a default. They arrive after the bank, the portal or a notice has told them about one.

The law offers three routes back. They are not interchangeable.

The first is the condonation scheme, a time-bound amnesty announced by circular. The Condonation of Delay Scheme, 2018 was notified by the Ministry of Corporate Affairs on 29 December 2017 and opened on 1 January 2018. It allowed a defaulting company that had not been struck off to file every overdue document in one sitting. During the window the disqualified directors' DINs were temporarily reactivated so that they could sign. The company paid the normal and additional fees, then filed Form e-CODS 2018 with a fee of ₹30,000. A struck-off company could not use the scheme directly. It first had to be restored by the National Company Law Tribunal under Section 252 of the Companies Act, 2013. The Companies Fresh Start Scheme, 2020, announced by General Circular No. 12/2020 of 30 March 2020, went further. It waived additional fees altogether for documents filed during the window and granted immunity from penalty for the delay. Both schemes have closed. Nobody can say when the next will open, and I advise no client to plan around one.

The second route is compounding. Under Section 441, an offence punishable with fine only, or with fine or imprisonment, may be compounded by the Regional Director or the Tribunal before or after prosecution begins. The company admits the default, pays a sum fixed by the authority and the proceedings end. Two limits matter in practice. Compounding is not available for offences punishable with imprisonment only, or with imprisonment and fine together. Nor is it available for the same or a similar offence committed again within three years. Foreign exchange has its own procedure, the Foreign Exchange (Compounding Proceedings) Rules, 2024, administered by the Reserve Bank. The payments firm's application for its missing FC-GPR went in under those Rules. At the time of writing the order has not been issued. The Bengaluru fund's lawyers have written the order into their conditions precedent, which is the first time I have seen a compounding order treated as a closing document.

The third route is voluntary disclosure, and it is the cheapest of the three because it comes before anyone asks. Section 73(5) of the Central Goods and Services Tax Act, 2017 allows a taxpayer to pay tax and interest through Form DRC-03 before a show cause notice is issued. If he does, no notice follows for that amount. The Kolhapur trader could have done this in 2023, the year his GSTR-9 already showed the gap, and saved himself a hearing. The Income-tax Act, 1961 has a counterpart in the updated return under Section 139(8A), introduced in 2022. The Finance Act, 2025 extended its window to forty-eight months from the end of the relevant assessment year. It charges additional tax at rising rates, from 25 per cent of the tax and interest in the first year to 70 per cent in the fourth. Waiting is priced openly.

All three routes share one condition. The company must first know precisely what it has missed, and the date on which it was missed. The spice-blender's edit log, the trader's Table 8A and the payments firm's unsubmitted draft were each a record of exactly that, kept for years before anyone read it.

A client in Talawade once asked me which scheme gave the biggest discount.

'The one where you file on time,' I said.

'That is not a scheme, madam.'

The Rejection Slip

The carton maker from Bhosari came to see me in January 2026, eight years and four months after the cashier told him the system was not taking his name. He had not come about a default. He wanted to know whether his daughter, who had finished a commerce degree at a college in Akurdi and now ran the factory's accounts, could be appointed a director before the next tender season. She could. Section 152 of the Companies Act, 2013 asks for consent in Form DIR-2, a DIN, and a resolution. It does not ask whether her father approves of her handwriting, though he raised the point.

His recovery in 2018 was less dramatic than his crisis. The dormant company had not yet been struck off, so it was eligible for the Condonation of Delay Scheme, 2018. In the third week of January we filed five years of overdue financial statements and annual returns for an entity that had never sold a carton, a rupee of revenue in any year. Each return reported nothing, and each nil return carried its own additional fee. Then came Form e-CODS 2018 and its ₹30,000. His DIN was reactivated for the window, the condonation came through, and in the same year he and his cousin applied to have the company struck off voluntarily in Form STK-2. It was closed with its paperwork complete. He told me afterwards that it had cost more to bury than it had ever cost to keep alive. That was very nearly true.

What changed afterwards was not his knowledge of the Act. He still could not tell you what Section 164 contains. What changed was that he wrote the dates down and put a name beside each. His AGM is held in the second week of September. The AOC-4 goes in within a fortnight of it, well before the thirty days allowed, and the MGT-7A follows within days. His DIR-3 KYC is done in July, when the portal is quiet. The paper supplier who received the bounced cheque in 2017 still supplies him, and is paid by the seventh of each month, a practice he adopted that October and has not varied. The calendar hangs on the wall behind his desk, a printed sheet from a Bhosari stationer with the obligations marked in green, his daughter's initials against most of them and his own against the rest.

I asked him once why he files early when on time would do. 'On time is the last day,' he said. 'On the last day the portal is slow.' He was right about the portal.

Before he left in January he opened the top drawer of his desk to show me something, as he has done for every new member of staff since 2018. It was the bank's slip from that Tuesday in September 2017, folded twice and soft at the creases. It bears the branch stamp from Old Pune–Mumbai Road, the amount of ₹3,80,000, and a single line in the cashier's ballpoint, written in the space marked 'Reason':

'Authorised signatory DIN not active. Kindly update.'