Re-opening of accounts requires a judicial order finding fraud or mismanagement before financial statements can be recast.

A company may not re-open its books of account or recast financial statements except by order of a competent court or Tribunal finding that earlier accounts were prepared fraudulently or that mismanagement during the relevant period cast doubt on reliability. The court or Tribunal must give notice to the Central Government and Income-tax authorities and consider their representations before ordering re-opening. Accounts revised under this provision are final.

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