Chapter XIV - Inspection, Inquiry and Investigation
Section 229
Section 229: penalty for furnishing false statement, mutilation, destruction of documents
Section 229 protects the integrity of inspections, inquiries and investigations. Destroying, falsifying or hiding documents, making false entries, or giving false explanations is punishable for fraud in the manner provided in section 447.
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Need advice on Section 229?
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
Where a person who is required to provide an explanation or make a statement during the course of inspection, inquiry or investigation, or an officer or other employee of a company or other body corporate which is also under investigation,—(a) destroys, mutilates or falsifies, or conceals or tampers or unauthorisedly removes, or is a party to the destruction, mutilation or falsification or concealment or tampering or unauthorised removal of, documents relating to the property, assets or affairs of the company or the body corporate; (b) makes, or is a party to the making of, a false entry in any document concerning the company or body corporate; or (c) provides an explanation which is false or which he knows to be false, he shall be punishable for fraud in the manner as provided in section 447.
Introduction
Section 229 commenced on 1 April 2014 under S.O. 902(E). It has not been amended. This guide follows the 2013 Gazette wording "unauthorisedly removes" in clause (a), where the India Code consolidation prints "unauthorised removes".
Key takeaways
Who is covered
A person required to give an explanation or statement during an inspection, inquiry or investigation, and officers or employees of a company or body corporate also under investigation.
Prohibited acts
Destroying, mutilating, falsifying, concealing, tampering with or unauthorisedly removing documents; making false entries; giving false explanations.
Punishment
The person is punishable for fraud in the manner provided in section 447.
Persons and acts covered
The section applies to a person who is required to provide an explanation or make a statement during the course of an inspection, inquiry or investigation, and to an officer or other employee of a company or other body corporate which is also under investigation.
It is an offence for such a person to (a) destroy, mutilate or falsify, or conceal or tamper with or unauthorisedly remove, or be a party to doing any of those things to, documents relating to the property, assets or affairs of the company or body corporate; (b) make, or be a party to making, a false entry in any document concerning the company or body corporate; or (c) provide an explanation which is false or which he knows to be false.
Punishment
The person is punishable for fraud in the manner provided in section 447. Section 447 sets out the punishment for fraud under the Act; check its current text for the applicable terms.
Practical preparation
Issue a document-preservation instruction as soon as an inspection or investigation starts; suspend routine deletion of emails and files; log any removal of records from the office; and have explanations to the inspector reviewed for accuracy before they are given.
Procedure, forms, fees and timelines for applications under this provision are set out in rules made under the Act and in the Tribunal’s procedure; check the current text of those rules, and any exemption notification for your class of company, before relying on this guide.
Practical checklist
Do
- Freeze routine destruction of records once an inspection, inquiry or investigation begins.
- Give explanations that are accurate and that you can support with documents.
Avoid
- Do not remove company records from the premises without authorisation during an investigation.
- Do not correct or back-date entries in books under investigation.
Illustrative example
Hypothetical: deleting files before an inspection
An accounts manager deletes vendor ledgers from the company server after the company receives notice of an investigation.
Act covered
Destroying documents relating to the company’s affairs falls within clause (a).
Consequence
The manager is punishable for fraud in the manner provided in section 447.
Outcome
- A preservation instruction issued at the start of the investigation would have reduced this risk.
Glossary
- Mutilate
- Damage a document so that it is incomplete or illegible.
- False entry
- A record in a document that does not reflect the true transaction or fact.
- Section 447
- The section of the Act that provides the punishment for fraud.
Frequently asked questions
Does section 229 apply only to directors?
No. It covers any person required to give an explanation or statement, and any officer or other employee of a company or body corporate that is also under investigation.
What is the punishment?
The person is punishable for fraud in the manner provided in section 447.
Need help applying this provision to your situation?
Contact BizeneedLast updated 12 October 2026