The Ministry of Corporate Affairs (MCA) vide a Notification dated February 11, 2022, has issued Companies (Accounts) Amendment Rules, 2022 to further amend the Companies (Accounts) Rules, 2014. As per the amended rules, every company covered under Section 135 of the Companies Act, 2013 shall furnish a report on Corporate Social Responsibility in E-Form CSR-2 to the Registrar for the financial year 2020-2021 and onwards. The new rule shall come into force from February 11, 2022.
The Corporate Social Responsibility concept in India is governed by Section 135 of the Companies Act, 2013 according to which certain classes of profitable organizations must shell out a portion of net profit towards Corporate Social Responsibility (CSR) activities in a particular financial year.
The companies meeting the following criteria during the immediately preceding financial year can make CSR expenditure under Section 135 of the Companies Act, 2013:
MCA vide its notification dated 11th February 11 announced that Form CSR-2 shall be filed separately on or before 31st March 2022 for the financial year 2020-2021 after filing Form AOC-4 or AOC-4 XBRL or AOC-4 NBFC (Ind AS).
In the notification, no separate penalty is specified for the non-filing of the form.
According to Section 450 of the Act, if a company or any officer of a company or any other person contravenes any of the provisions of this Act or the rules made thereunder, and for which no penalty or punishment is provided elsewhere in this Act, the company and every officer of the company who is in default or such other person shall be liable to:
subject to a maximum of two lakh rupees in case of a company and fifty thousand rupees in case of an officer who is in default or any other person.
As a part of the good corporate governance practice MCA on 11th Feb 2022 notified Form CSR-2. Now it is mandatory for corporates to furnish the details of the CSR spent to the Ministry through this form. Earlier no such form was prescribed. Section 135 of the act only mandates to annex the details of CSR to its Board Report and disclose on the website of the Company, if any. CSR-2 may be useful for data mining and analysis for the MCA’s CSR department to introduce better policies on this front.