Earlier, CSR related defaults were compoundable offences. So far, sanction for prosecution has been accorded in 366 cases. "Of these, 174 applications for compounding have been made and 121 cases have been compounded," the data showed.
Now, the non-compliance of CSR provisions has been converted as a civil wrong with effect from January, 22 2021.
The penal provision related to violation of CSR provision with respect to CSR expenditure is provided under Section 135 (7) of the Act. As per the existing provision, penalty is prescribed against the company and every officer in default which is determined on the basis of unspent CSR amount of the company.
The broad framework for CSR has been provided under Section 135 of the Companies Act, 2013, Schedule VII of the Act and Companies (CSR Policy) Rules, 2014. The CSR framework is disclosure-based and CSR mandated companies are required to file details of CSR activities annually in the MCA21 registry.
The government monitors the compliance of CSR provisions through the disclosures made by the companies in the MCA21 portal.
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.
