CSR Penalty Under Companies Act 2013

Penalty for non-compliance of CSR provisions under Companies Act, 2013

There is no specific penal provision for non-compliance under section 135 of the Act. However, there is risk exposure under two different provisions.

A. Section 134(3)(o)& Section 134(8)

(Non-disclosure or absence of the details about the CSR policy and its implementation in the Boards’ report would attract penalties)

• Section 134(3)&(o): to disclose all the relevant information about its CSR policy and its implementation on an annual basis.
• Section 134(8): Penalties for not discharging the duty as mentioned above are:

1. Fine, not less than fifty thousand rupees,  may extend to twenty-five lakh rupees; and

2. Every officer of the company in default shall be:

√ punishable with imprisonment for a term which may extend to three years; or with fine which shall not be less than fifty thousand rupees but which may extend to five lakhs rupees, or with both.

B. Section 450 & 451

General penalties for flouting the rules and repeat offences-

• Fine u/s 450 may extend to ten thousand rupees (Rs. 10,000/-), and where the contravention is continuing one, a further fine to one thousand rupees (Rs. 1,000/-) for every day after the first during which contravention continues.
• As per Sec 451 the defaulter is punished either with fine or with imprisonment and where the same offence is  committed for the second or subsequent occasions within a period of three years, then, that company and every officer thereof who is in default shall be punishable with twice the amount of fine for such offence in addition to any imprisonment provided for that offence.