Chapter IX - Accounts of Companies
Section 130
Section 130: re-opening of accounts on court’s or Tribunal’s orders
A company cannot re-open its books of account or recast its financial statements unless a court of competent jurisdiction or the Tribunal orders it, on an application by a specified authority or person, on grounds of fraud or mismanagement.
On this page
Need advice on Section 130?
This article is for general information. Refer to the Companies Act, 2013 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
(1) A company shall not re-open its books of account and not recast its financial statements, unless an application in this regard is made by the Central Government, the Income-tax authorities, the Securities and Exchange Board, any other statutory regulatory body or authority or any person concerned and an order is made by a court of competent jurisdiction or the Tribunal to the effect that— (i) the relevant earlier accounts were prepared in a fraudulent manner; or (ii) the affairs of the company were mismanaged during the relevant period, casting a doubt on the reliability of financial statements: Provided that the court or the Tribunal, as the case may be, shall give notice to the Central Government, the Income-tax authorities, the Securities and Exchange Board or any other statutory regulatory body or authority concerned or any other person concerned and shall take into consideration the representations, if any, made by that Government or the authorities, Securities and Exchange Board or the body or authority concerned or the other person concerned before passing any order under this section.
(2) Without prejudice to the provisions contained in this Act the accounts so revised or re-cast under sub-section (1) shall be final.
(3) No order shall be made under sub-section (1) in respect of re-opening of books of account relating to a period earlier than eight financial years immediately preceding the current financial year: Provided that where a direction has been issued by the Central Government under the proviso to sub-section (5) of section 128 for keeping of books of account for a period longer than eight years, the books of account may be ordered to be re-opened within such longer period.
Introduction
Section 130 protects the finality of approved accounts. Re-opening is allowed only through a court or Tribunal order on two grounds, after notice to the regulators, and generally only for the last eight financial years.
Section 130 came into force on 1 June 2016 (S.O. 1934(E)). The Companies (Amendment) Act, 2017 added notice to “any other person concerned” and the eight-year limit in sub-section (3), with effect from 9 February 2018. Voluntary revision by the Board is a separate matter under section 131.
Key takeaways
Order required
Only an order of a court of competent jurisdiction or the Tribunal permits re-opening or recasting.
Two grounds
Earlier accounts prepared in a fraudulent manner, or mismanagement during the relevant period casting doubt on the reliability of financial statements.
Eight-year limit
No order may cover a period earlier than eight financial years before the current year, unless a longer section 128(5) retention direction applies.
Who can apply and on what grounds
An application may be made by the Central Government, the Income-tax authorities, the Securities and Exchange Board, any other statutory regulatory body or authority, or any person concerned. The court or Tribunal must find that the relevant earlier accounts were prepared in a fraudulent manner, or that the company’s affairs were mismanaged during the relevant period, casting doubt on the reliability of the financial statements.
- India Code — consolidated Companies Act, 2013, section 130
- Gazette of India — Companies Act, 2013 as enacted (No. 18 of 2013), section 130
- eGazette — MCA notification S.O. 1934(E), 1 June 2016 - listed provisions in force from 1 June 2016
- eGazette — Companies (Amendment) Act, 2017 (No. 1 of 2018)
- eGazette — MCA notification S.O. 630(E), 9 February 2018 - listed sections of Act 1 of 2018 in force
Notice and representations
Before passing an order, the court or Tribunal must give notice to the Central Government, the Income-tax authorities, the Securities and Exchange Board or any other statutory regulatory body or authority concerned, or any other person concerned, and take their representations into consideration.
Effect and time limit
Without prejudice to other provisions of the Act, accounts revised or recast under an order are final. No order may be made for re-opening books relating to a period earlier than eight financial years immediately preceding the current financial year.
Where the Central Government has directed, under the proviso to section 128(5), that books be kept for longer than eight years, re-opening may be ordered within that longer period.
Practical preparation
Confirm that the applicant is within the listed categories; identify which ground is alleged; check the eight-year window and any longer section 128(5) direction; track notices to the authorities; preserve the books and vouchers for the periods in question; once ordered, prepare recast statements as directed and treat them as final.
Practical checklist
Do
- Keep books for the full retention period so an ordered re-opening can be carried out.
- Distinguish a section 130 order from a Board-led voluntary revision under section 131.
- Check whether a section 128(5) direction extends the eight-year limit.
Avoid
- Do not re-open books or recast statements without a court or Tribunal order under this section.
- Do not assume a period older than eight financial years can be reopened without a longer retention direction.
Illustrative example
Hypothetical: regulator alleges fraudulent accounts
A regulator applies to the Tribunal alleging that a company’s accounts for a year six financial years ago were prepared fraudulently.
Window
The year is within the eight-financial-year limit in section 130(3).
Notice
The Tribunal gives notice to the Central Government, Income-tax authorities, SEBI and other concerned bodies and considers their representations.
Order
If the Tribunal finds fraudulent preparation, it orders re-opening and the recast accounts become final.
Outcome
- The accounts may be reopened only through the Tribunal’s order and only within the statutory period.
Glossary
- Re-opening of books
- Reworking closed books of account of an earlier period.
- Recasting
- Re-preparing previously approved financial statements.
- Tribunal
- The National Company Law Tribunal constituted under the Act.
Frequently asked questions
Can a company re-open its accounts on its own under section 130?
No. Section 130 requires an application by a specified authority or person and an order of a court of competent jurisdiction or the Tribunal. Voluntary revision is governed separately by section 131.
How far back can accounts be reopened?
Not earlier than eight financial years immediately preceding the current financial year, unless the Central Government has directed a longer retention period under the proviso to section 128(5).
Are recast accounts final?
Yes. Section 130(2) makes revised or recast accounts final, without prejudice to other provisions of the Act.
Need help applying this provision to your situation?
Contact BizeneedLast updated 11 October 2026