ONE TIME REPORTING OF EXEMPTED DEPOSITS IN E-FORM DPT-3
On the verge of bringing new concepts, reporting mechanism and compliances, Ministry of Corporate Affairs introduced a new concept of reporting of exempted deposits and brought in the new sub-rule i.e. Sub-Rule (3) of Rule 16A through the Companies (Acceptance of Deposits) Amendment Rules, 2019 (hereinafter referred to as ‘Amended Deposits Rules’). The said Amendment has been made by way of notification dated 22.01.2019 duly issued by the Ministry. Prior to such notification Reporting of Exempted Deposits was no where required to be done anywhere except in the financial statements or annual filing documents. It seems that such reporting has been introduced by the Ministry to track down the outstanding amount not specifically dealt with and reported anywhere by the Company as on the date of notification. In this write-up we will be analysing the provisions of notifications dated 22.01.2019 & 30.04.2019 w.r.t subject matter, and will be discussing regarding the applicability of the notification, what is required to be filed, tenure to be considered for filing, and other related queries.
LANGUAGE OF RULE 16A(3)-
“(3) Every company other than Government company shall file a onetime return of outstanding receipt of money or loan by a company but not considered as deposits, in terms of clause (c) of sub-rule 1 of rule 2 from the 01st April, 2014 to the date of publication of this notification in the Official Gazette, as specified in Form DPT-3 within ninety days from the date of said publication of this notification along with fee as provided in the Companies (Registration Offices and Fees) Rules, 2014.” [Notification dated 22.01.2019]
The above phrase “from 01st April, 2014 to the date of publication of this notification in the Official Gazette” has been replaced by “from the 01st April, 2014 to 31st March 2019” through Companies (Acceptance of Deposits) Second Amendment Rules, 2019. [Notification Dated 30.04.2019]
New Language of Rule 16(A)(3)- “Every company other than Government company shall file a onetime return of outstanding receipt of money or loan by a company but not considered as deposits, in terms of clause (c) of sub-rule 1 of rule 2 from the 01st April, 2014 to 31st March 2019, as specified in Form DPT-3 within ninety days from 31st March, 2019 along with fee as provided in the Companies (Registration Offices and Fees) Rules, 2014.”
APPLICABILITY OF AMENDED DEPOSITS RULES-
The Amended Deposits Rules are applicable to every sort of Companies be it Private Company, Public Company, Section 8 Company, Small Companies, One Person Companies, etc. except Government Companies as defined under Section 2(45) of the Companies Act, 2013 (hereinafter referred to as ‘the 2013 Act’).
It is also pertinent to note here the implication of Rule 1 of the Original Rules, which specifically stipulates that the Deposit Rules shall not apply to Banking Companies, NBFCs registered with Reserve Bank of India, Housing Finance Companies registered with National Housing Bank, and any other Company as specified by Central Government in terms of provision.
Since, the notification is bringing amendment in the subsidiary rules of the Chapter and all such subsidiary rules must be read in line with the intent provided under the parent rule, the exemption provided under such rule 1 will prevail over the respective notification(s).
WHAT IS REQUIRED TO BE FILED?
Pursuant to plain reading of the new provision i.e. Rule 16A(3) of the Amended Deposits Rules, every outstanding receipt of money or loan by a Company which is not considered as deposits in terms of Rule 2(1)(c) of the Companies Acceptance of Deposits Rules, 2014 (hereinafter referred to as the ‘Original Rules’) is required to be reported. The reporting is the one-time requirement only. If we consider the phrase ‘outstanding receipt of money or loan by a company but not considered as deposits’, it indirectly binds the company to report about the details of outstanding amount which is not deposit i.e. exempted deposits. The list of items not to be considered as ‘Deposit’ i.e. exempted deposits has been provided in sub-clauses (i) to (xviii) of Rule 2(1)(c) of the Original Rules.
TENURE TO BE CONSIDERED FOR FILING
The language of the new Rule 16(A)(3) seems to be very ambivalent, as it is open to different interpretations from plain reading of the notification. The phrase used in the notification w.r.t reporting period is ‘from the 01st April, 2014 to 31st March, 2019’ which is to be read with ‘outstanding receipt of money or loan by a company but not considered as deposits, in terms of clause (c) of sub-rule 1 of rule 2’, language used prior to the former phrase leads to two interpretation(s), which are-
- Any sort of outstanding amount not considered as deposits are required to be reported, irrespective of the period of receipt i.e. whether received prior to 01st April 2014 or after,
- Only the amount not considered as deposit which has been received on or after 01st April 2014, and is outstanding as on 31st March, 2019 is required to be reported.
It is pertinent to note here the effective date of the Original Rules. The said rules were made effective on 31.03.2014. Rule 2(1)(c) of the original rules defines the term ‘deposit’ which start with the phrase ‘any receipt of money by way of deposit or loan’. Also, all the sub-clauses mentioned under such definition contained the primary requirement of receiving, receipt, raised, brought in, introduced or acceptance of money, which constitutes that the amount whether will be deposit or not for the purpose of the 2013 Act has to be considered at the time of taking of money and not after that.
Manner of interpretation of the notification
It is cardinal principle of construction that new law is prima facie prospective unless specifically mentioned to have the retrospective effect. There is a presumption to have prospective implication of law expressed in the legal maxim ‘nova constitutio futuris formam imponere debet non praeteritis’ i.e. a new law ought to regulate what is to follow, not past.
In the erstwhile Companies Act, 1956, the Companies (Acceptance of Deposits) Rules, 1975 was providing the definition of ‘deposits’ which is different to the current definition. It is also necessary to remind here that the provisions relating to deposits in the erstwhile Companies Act, 1956 has been superseded by the introduction of the new provisions for ‘Deposits’ under the 2013 Act.
It is to be noted that the notification w.r.t reporting of exempted deposits has been introduced under new rule under the 2013 Act, and since the notification is not specifically mentioning about taking the effect in retrospective manner for the deposit taken under the erstwhile Act, the notification will be having only the binding effect over the amount received under the Companies Act, 2013.
Tenure of reporting period
In furtherance to the principle discussed above, irrespective of the nature of amount received in the erstwhile Act and outstanding as on 01.04.2014, the Company is not required to report for those amounts, and only the amount received after such date and outstanding as on 31.03.2019 is required to be reported. Therefore, the reporting period shall be from 01.04.2014 to 31.03.2019.
WHETHER AUDITOR CERTIFICATE IS MANDATORY FOR ONE TIME RETURN OF EXEMPTED DEPOSITS?
The confusion regarding the requirement of Auditor Certificate is due to linking of two rules of the Original rules i.e. Rule 16 and Rule 16A.
Ministry, in the notification relating to One time return of exempted deposits has specifically clarified that Form DPT-3 specified in Rule 16 of the Deposit Rules shall only be used for filing of exempted deposits. It is pertinent to note here that such clarification has been introduced by way explanation to the said rule, and it does not anywhere bind the Company to follow the provisions of Rule 16 when it comes to the question of filing of exempted deposits. The Company filing the DPT-3 for exempted deposits has to comply with only Rule 16A of the deposit Rules. The requirement of obtaining auditor certificate is no where mentioned in Rule 16A but mentioned in Rule 16. Hence, the Company while filing DPT-3 w.r.t one time return of exempted deposits does not have to obtain Certificate from Auditor.
TIME-LINE FOR FILING E-FORM DPT-3 W.R.T ONE TIME RETURN OF EXEMPTED DEPOSITS
90 days from 31st March, 2019.
Concept of hiding is no more sustainable, and reporting of everything ethically and in good faith is the need of hour. It is the time to again analyse the books of accounts and furnish the requisite information. List of Exempted Deposits are now needed to be interpreted properly, and adjoining provisions needs to be taken due care at the time of filing. Every clause relating to exempted deposits has deep interpretation and corporates must take due care before reporting such details.
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