Section 120 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 120 requires every multi-State co-operative society to file a set of returns with the Central Registrar every year within six months of the closure of the accounting year. The 2023 Amendment Act changed the first item and added two new items on relatives employed and related party transactions.
This article follows the Ministry of Cooperation copy of the Act read with the Multi-State Co-operative Societies (Amendment) Act, 2023, which amended s.120 by its section 43. The 2023 Act came into force on 3 August 2023 (notification S.O. 3493(E)).
Every year, within six months of the closure of the accounting year, a society files with the Central Registrar: an annual report that now includes details of board decisions which were not unanimous; audited statements of accounts; the plan for surplus disposal approved by the general body; a list of bye-law amendments; a declaration on the date of the general body meeting and elections where due; a disclosure about employees who are relatives of board Members; a declaration of related party transactions; and any other information the Central Registrar requires. Failure has penal and election consequences.
The opening words: who files, when, with whom
"Every year within six months of the closure of the accounting year every multi-state cooperative society shall file the following returns with the Central Registrar, namely-". Three points. The duty falls on every society. The period is six months from "the closure of the accounting year". And the filing is with the Central Registrar.
The section says "accounting year". The 2023 Act inserted a definition of "financial year" in s.3(ka) and omitted the definition of "cooperative year", but did not change the words "accounting year" in s.120. The text does not say how those expressions relate, and this article does not reconcile them.
The eight items as amended
| Clause | Return, as amended |
|---|---|
| (a) | "annual report of the activities including details of board decisions which were not unanimous" |
| (b) | "audited statements of accounts" |
| (c) | "plan for surplus disposal as approved by the general body" |
| (d) | "list of amendments to the bye-laws of the multi-state cooperative society" |
| (e) | "declaration regarding date of holding of general body meeting and conduct of elections where due" |
| (f) | "disclosure regarding employees who are relatives of Members of board" |
| (g) | "declaration of any related party transactions by the board of directors" |
| (h) | "any other information required by the Central Registrar in pursuance of any of the provisions of this Act or the rules made thereunder" |
Clause (a) was substituted so that the report now carries details of board decisions that were not unanimous. Clauses (f), (g) and (h) were substituted for the old clause (f), which asked only for "any other information required by the Central Registrar in pursuance of any of the provisions of this Act"; the new (f) and (g) are additions and (h) is the old (f) with the words "or the rules made thereunder" added.
Example. The board of the invented Arvalli Multi-State Credit Society decides by a majority of five to two to approve a loan to a company in which one director has an interest, and the society also employs the brother of a Member of the board. The return must report the non-unanimous decision, the employee who is a relative, and the related party transaction. A society preparing its first return under the amended list can ask for legal consultation on the contents.
The Act does not define "related party transactions", "relatives" in this clause or "Members of board" (with a capital M, as printed). The sources do not say what form the declaration takes. The 2023 Act also adds a list of relatives in s.41; this article does not import that list into s.120.
Consequences of not filing
- Offence. Section 104(1) as amended punishes "failing to file any return or information", and s.104(3) now refers to "a person required to file return under section 120". See our article on offences and penalties.
- Election. Under s.43(2) as amended, "a person shall not be eligible for being elected as member of board of a multi-state cooperative society for a period of five years if the board of such multi-state cooperative society fails- ... (e) to file annual return specified in section 120 within the time specified therein". The 2023 Act added this clause. The sub-section also covers failures to conduct elections, to call the annual general meeting and to prepare the financial statement; this article does not expand on those.
- Further information. Clause (h) lets the Central Registrar require other information under the Act or the rules.
Matters the return refers to are discussed elsewhere: the annual accounts in our article on registers, returns and annual accounts, the minutes in minutes of general and board meetings, and electronic filing in the articles on sections 120A and 120B.
Rules
The section does not say in what form the returns are filed. The consolidated Rules, 2002 are not in the sources used for this article; amending rules were notified on 4 August 2023 (G.S.R. 591(E)) and the Rules as amended should be checked. This article gives no form number, fee or procedure.
What the 2023 Amendment Act changed
| Provision | Before | After |
|---|---|---|
| s.120(a) | "annual report of the activities" | "annual report of the activities including details of board decisions which were not unanimous" |
| s.120(f) | "any other information required by the Central Registrar in pursuance of any of the provisions of this Act" | Replaced by (f) disclosure on employees who are relatives of Members of board, (g) declaration of related party transactions, and (h) any other information required, now "or the rules made thereunder" |
| s.43(2)(e) | Not present | New ground: failure to file the annual return within the time specified |
| s.104 | Fines of two thousand and ten thousand rupees | Raised, and failing to file any return or information now an offence |
Need help with the annual return?
The amended list asks for information that boards did not have to report before, and a missed or incomplete return has penal and election consequences. Our team can review your return contents and the board records behind them through legal consultation.
Key takeaways
- Returns are due every year within six months of the closure of the accounting year, filed with the Central Registrar.
- The annual report now includes details of board decisions which were not unanimous.
- New items cover employees who are relatives of Members of board and related party transactions.
- Failure to file is an offence under s.104 and a five-year bar on election to the board under s.43(2)(e).
- The form and process are left to rules, which should be checked.
Read next
- Multi-State Co-operative Societies Act, 2002: complete guide
- Sections 120A and 120B: electronic filing and the Banking Regulation Act
- Section 104: offences and penalties
- Sections 107 and 109: registers, returns and annual accounts
Disclaimer: Based on the Ministry of Cooperation copy of the Multi-State Co-operative Societies Act, 2002 read with the Multi-State Co-operative Societies (Amendment) Act, 2023 (in force from 3 August 2023), as consulted on 2 October 2026. The Multi-State Co-operative Societies Rules, 2002 as amended, later notifications and later amendments are not covered and should be checked. This article is general information, not legal advice; check the official text before acting.