Statutory audit and annual returns for housing societies

Every co-operative housing society in Maharashtra must have its accounts audited every year by a panel auditor. It must then place the report before the AGM, fix what the auditor found and file its returns with the Registrar. None of this is optional, and each step has a clock.

This guide walks a committee and treasurer through the year: closing the books, the statutory audit, the audit class, rectification in Form O and the returns under s.79.

Step 1: close the accounts within 45 days

The co-operative year ends on 31 March. BL 145(a) of the 2014 model bye-laws requires the preceding year’s accounts to be finalised within 45 days, around 15 May. That means:

receipts and payments;
income and expenditure account;
balance sheet in Form N (Rule 62);
the list of members and schedules of investments, debtors, creditors and fixed assets.

The draft 2026 bye-laws keep the 45 days and add that the statements go to the auditor within 15 days, with the books and records within 60 days of year-end (dBL 141(1)–(3)). The committee remains responsible even if an accountant or a software provider keeps the books (dBL 140(4)).

Step 2: the statutory audit deadline

Section 81(1)(a) of the MCS Act, in the text published by the Co-operation Department, requires the audit to be completed within six months of the close of the financial year and in any case before notice of the AGM is issued. Section 81(1)(c) makes the committee responsible for getting it done. BL 150(b) says the same.

Because the AGM must be held by 30 September with 14 clear days’ notice, the audit realistically has to be finished by early September. The draft 2026 bye-laws set a firmer target: the audit completed and reported by 31 July, and the audited statements displayed 14 days before the AGM (dBL 141(4)–(5)). That is draft text, but it is a sensible deadline to plan for now.

Who can audit

The auditor must be from the panel kept by the Registrar and approved by the State Government.
The general body makes the appointment and fixes the fee (s.81(1)(a), (f); BL 150(a), (c)).
One auditor may not take more than 20 society audits a year, excluding very small societies.
Under BL 150(a) the same auditor cannot be appointed for more than two consecutive years.

The auditor submits the report to the society and the Registrar and uploads the required parts on the Co-operation Department’s portal (s.81; Rule 69).

Step 3: understand the audit class

Rule 69(9) requires the auditor to award an audit classification (commonly A, B, C or D) under the Registrar’s instructions. The marking criteria are in Registrar circulars, not in the Act or bye-laws.

The class matters:

It is a quick public signal of how well the books, recoveries and compliance are kept.
Under the 2014 bye-laws, a society classed A or B can write off certified irrecoverable dues against a Bad Debt Fund without the Registrar’s permission (BL 149 proviso).

A C or D class is a warning to members. Read the audit memorandum for the reasons.

Step 4: rectification in Form O

The audit report lists defects and irregularities. Section 82 gives the society three months from the audit report to:

explain the defects;
rectify them;
report the action taken to the Registrar.

Rule 73 prescribes this report in Form O and requires further reports until every objection is closed. BL 152 sets the internal procedure. The Secretary drafts the Form O report and the committee approves it. The report then goes to the Registrar and to the AGM (BL 94(d)).

Failure to rectify is treated as an offence under s.146, punishable under s.147. The Audit Rectification Register in Form O is one of the statutory registers (BL 140). The draft bye-laws make committee members jointly and severally responsible (dBL 143).

Step 5: annual returns under section 79

Two returns are filed online on the MahaSahakar portal.

Section 79(1A), by 30 September:

the annual report of the society’s activities;
the audited statements of accounts;
the plan for disposal of surplus approved by the general body;
the list of bye-law amendments;
a declaration of the AGM date and whether elections are due;
anything else the Registrar requires.

BL 145(b) repeats this list and adds the list of members.

Section 79(1B), within one month of the AGM: the name of the auditor appointed at the AGM, with the auditor’s written consent. If this return is not filed, the Registrar may appoint an auditor himself (s.81(1)(a) proviso).

The Co-operation Department treats a return that is not uploaded as not filed. Non-filing can lead to action under ss.146–147.

Statutory audit checklist

Accounts and Form N finalised by about 15 May.
Books, registers and vouchers handed to the auditor promptly (BL 151).
Audit completed and report received, ideally by 31 July and in any case before the AGM notice.
Audit class noted, and the reasons read and circulated to the committee.
Form O rectification report drafted, approved and filed within three months.
Audit report, Form O and next year’s auditor on the AGM agenda.
s.79(1A) returns uploaded on MahaSahakar by 30 September; acknowledgement kept.
s.79(1B) auditor-appointment return filed within one month of the AGM.

What the law says

MCS Act s.81(1)(a), (c), (f): annual audit by a panel auditor appointed by the general body; completed within six months and before the AGM notice; committee responsible; fee fixed by the general body.
s.82; Rule 73: rectification within three months; Form O; further reports until closed.
s.79(1A), (1B): annual returns and the auditor return.
ss.146–147: offences and penalties.
Rule 69: audit procedure and the audit classification letter (69(9)).
BL 94, 140, 145, 149–152 (2014): agenda, registers, returns, write-off and audit procedure.
dBL 140–143 (draft 2026): 31 July audit, display before the AGM, joint responsibility. These are draft only and not yet in force.

Open point: some texts and practitioner notes cite a four-month audit period. The Co-operation Department’s published s.81 and BL 150(b) say six months. Aiming for July meets either reading.

Find more answers about accounts, audit and members’ rights on the accounts and audit FAQ page.

Sources

General information, not legal advice. Your society's registered bye-laws may differ; for a dispute or a decision with legal or financial consequences, consult the Registrar's office, an advocate or a chartered accountant.