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MCA Issues Important Clarification to Rectify an Anomaly in Extension of LLP Settlement Scheme, 2020 & Due Date of Filing Form 8 for FY 2019-20.

All Limited Liability Partnerships (LLPs) registered under Limited Liability Act, 2008, are required to file two statutory forms viz. Form 11 and Form 8, annually.

The Annual Return in Form 11 is to be submitted within 60 days of closure of the financial year i.e. by 30th May of the subsequent financial year. The Statement of Account and Solvency in Form 8 is to be submitted within 30 days from the expiry of six months from the closure of the financial year i.e. by 31st October of the subsequent financial year.

The Ministry of Corporate Affairs (MCA) on 9.11.2020, has issued an Important General Circular No. 37/2020, in continuation of its earlier Circular Nos. 31/2020 dated 28.9.2020 and 13/2020 dated 30.3.2020, regarding the Extension of LLP Settlement Scheme, 2020.

The said General Circular No. 37/2020 dated 9.11.2020, is important and significant because it rectifies an anomaly arising out of its earlier Circular No. 13/2020 dated 30.3.2020.

It may be recollected that MCA vide its General Circular No. 13/2020 dated 30th March, 2020, has modified the provisions related to LLP Settlement Scheme, 2020, to allow a one-time condonation of delay in filing statutory forms/documents by the LLPs, with the Registrar.

By virtue of the LLP Settlement Scheme, 2020, any Defaulting LLP was permitted to file its belated statutory forms/documents, which were due for filing till 31.08.2020,   in accordance with the provisions of this Scheme.

Earlier the last date for availing the benefit of this Scheme was 30.9.2020. This last date for availing the benefit of the Scheme has been further extended to 31.12.2020 vide MCA Circular No. 31/2020 dated 28.9.2020.

However, no corresponding extension was being made in the cut-off date for the applicability of the LLP Settlement Scheme, 2020 i.e. the due date uptill which the statutory forms/documents were originally required to be filed, in these two Circulars and it remained 31.8.2020 only.

Therefore, this omission of extension in the cut-off date, was resulting in an anomaly wherein the defaulting LLPs were being able to file belatedly their statutory forms/documents like Form 8, Form 11, which were due for filing on or before 31.8.2020, uptill 31.12.2020. However, similar relaxation was not available in respect of the statutory forms/documents including the Statement of Account and Solvency in Form 8, which were due for filing after 31.8.2020.

So, this anomaly was resulting in some absurd conclusions, wherein the defaulting LLPs were being able to file their Form 8 of the FY 2018-19 and earlier years, belatedly till 31.12.2020, but were not able to avail the similar extension in filing of Form 8, in respect of a later FY 2019-20, as the due date of filing Form 8 for the FY 2019-20 is 31.10.2020, which falls after 31.8.2020.

Taking cognizance of this anomaly, now MCA has extended the cut-off date for applicability of the LLP Settlement Scheme, 2020, from 31.8.2020 to 30.11.2020. Accordingly, now the defaulting LLPs will be able to file their belated statutory forms/documents including Form 8 & 11, which were due for filing on or before 30.11.2020, by 31.12.2020.

So, now the LLPs can file their Form 8 & 11 for the FY 2019-20 also by 31.12.2020.

Further, the same MCA General Circular No. 37/2020 dated 9.11.2020, has also provided that if a Statement of Account & Solvency i.e. Form 8, for the FY 2019-20, has been signed beyond the period of six months from the end of the financial year but not later than 30.11.2020, the same shall not be deemed as non-compliance.

It means that the original due date of filing Form 8 by LLPs for the FY 2019-20 has been extended from 31.10.2020 to 30.11.2020, and so the LLPs filing their Form 8 for the FY 2019-20 by 30.11.2020 will not be considered as defaulting LLPs.

However, if the LLPs commit default in filing their Form 8 for the FY 2019-20 by 30.11.2020, then such LLPs can avail the benefit of LLP Settlement Scheme, 2020, to belatedly file their Form 8 for the FY 2019-20 by 31.12.2020.

About the Author

Sh. Mayank Mohanka, FCA is a seasoned Tax Practitioner, an SRCC alumuni & is a renowned author with Taxmann Publications. He is a Senior Partner in a Noida based established and reputed CA Firm, M/s S M Mohanka & Associates. He is the Founder Director in M/s TaxAaram India Pvt Ltd, and has recently launched his unique Start-up Venture taxaaram.com, India’s first digital platform offering painless, seamless and cost-effective professional e-services in relation to faceless assessments, appeals and other statutory e-compliances.

He has a 15+ years of rich and profound experience in the field of Taxation (Direct & Indirect), and Advisory. He makes Representations for a widely diversified cross section of industries including Power Sector, Banking & Finance, Real Estate, Food Processing, Infrastructure, Manufacturing, Education and Information Technology, before Authority for Advance Rulings, ITAT, Education Boards and other appropriate forums.

He has to his credit 50 distinguished, informative, useful and practically oriented published articles in reputed journals, sites and platforms including Taxmann, on wide ranging subjects including Income Tax, GST, PF, ESI, IBC, Corporate Laws, Education Acts & FEMA.

He has also authored a ‘Best Seller’ Professional Book on the New Faceless Assessment Scheme, titled “Faceless Assessment Ready Reckoner with Realtime Case Studies”, with Taxmann Publications.