Section 130 – Re-opening of Accounts on Court / Tribunal Order
## Section 130 – Re-opening of Books of Account
### Trigger
A company shall NOT suo motu re-open its books of account (BOA) or re-cast its FS. It can be done only if an application is made by:
Central Government (CG)
Income Tax Authorities (ITA)
Securities and Exchange Board of India (SEBI)
Any other statutory regulatory body / authority
Any concerned person
to a Court or the Tribunal (NCLT).
### Notice Requirement
The Court or Tribunal shall give notice to:
CG
ITA
SEBI
Concerned regulatory authority
and consider their representations before passing an order.
### Grounds for Re-opening
The Court / Tribunal may pass an order for re-opening if it is shown that:
1. The earlier accounts of the company were prepared in a fraudulent manner, OR
2. The affairs of the company were mismanaged during the relevant period, casting doubt on the reliability of FS.
### Finality
The revised / re-cast accounts shall be final.
### Time Limit
Re-opening / re-casting can be done for accounts of 8 financial years preceding the current FY.
Exception (Longer Period): Where CG, under any other law, has directed an investigation to be made and the direction relates to a period earlier than 8 years, accounts may be re-opened for such longer period.
### Snapshot
Element
Detail
Suo motu re-opening
Not permitted
Applicant
CG / ITA / SEBI / Regulator / Concerned person
Authority
Court / Tribunal (NCLT)
Notice to
CG / ITA / SEBI / Regulator
Grounds
Fraudulent prep. OR mismanagement
Period
8 FY preceding (longer in case of investigation)
Revised accounts
Final
Worked example
### Example 1
Q: ABC Ltd. wishes to voluntarily re-open its accounts for FY 2020-21 because the directors believe the previous figures were understated. Can it do so under Section 130?
A: No. Section 130 specifically prohibits voluntary/suo motu re-opening. A company can re-open BOA only pursuant to an order of the Court/Tribunal on an application by CG/ITA/SEBI/regulator/concerned person and only on grounds of fraud or mismanagement. For voluntary revision, the company must approach the Tribunal under Section 131.
### Example 2
Q: In FY 2025-26, CG investigates ABC Ltd. and directs re-opening of accounts. Up to which year can the accounts be re-opened?
A: Ordinarily 8 preceding FYs (i.e., FY 2017-18 onwards). However, if the CG's investigation direction covers a longer period, then accounts can be re-opened for that longer period.
⚠️ Common exam mistakes
Confusing Section 130 (re-opening on Court/Tribunal order) with Section 131 (voluntary revision by directors).
Forgetting that the order must be from a Court / Tribunal – the company cannot re-open on its own.
Missing the 8-year time limit and its exception for longer investigation periods.
Omitting the notice requirement to CG/ITA/SEBI/Regulators – this is mandatory.
Bare-Act text Section 130 · Companies Act, 2013 · click to expand
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.