Tatsat Chronicle Magazine

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Govt sanctions prosecution in 366 CSR related cases

The Union Finance Minister and Corporate Affairs Ms. Nirmala Sitharaman informed the Lok Sabha that the Government of India has sanctioned prosecution proceedings in 366 cases related to violation of CSR provisions under the companies law. Under the Companies Act, 2013, a certain class of profitable entities is required to shell out at least 2 percent of their three-year average annual net profit towards CSR (Corporate Social Responsibility) activities. As part of amendments to the Act, non-compliance with the CSR provisions has been made “civil wrong” with effect from January 22, 2021.

The Union Minister further said whenever any violation of CSR provisions is reported, action against such non-compliant companies is initiated as per provisions of the Act after due examination of records and following due process of law. All CSR-related defaults are compoundable. So far, sanction for prosecution has been accorded in 366 cases. Of these, 148 applications for compounding have been made and 75 cases have been compounded.

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