182. (1) Notwithstanding anything contained in any other provision of this Act, a company, other than a Government company and a company which has been in existence for less than three financial years, may contribute any amount directly or indirectly to any political party:
Comment: Section 182(1) says that Government Company and a company which has been in existence for less than 3 financial years are not eligible for making a political contribution. i.e. only companies which are not a government company and having the existence of more than 3 financial years is eligible for making a political contribution.
Provided that no such contribution shall be made by a company unless a resolution authorising the making of such contribution is passed at a meeting of the Board of Directors and such resolution shall, subject to the other provisions of this section, be deemed to be justification in law for the making of the contribution authorised by it.
Comment: Company is required to pass board resolution at a meeting of the Board of Directors for such contribution.
(2) Without prejudice to the generality of the provisions of sub-section (1),—
(a) a donation or subscription or payment caused to be given by a company on its behalf or on its account to a person who, to its knowledge, is carrying on any activity which, at the time at which such donation or subscription or payment was given or made, can reasonably be regarded as likely to affect public support for a political party shall also be deemed to be contribution of the amount of such donation, subscription or payment to such person for a political purpose;
(b) the amount of expenditure incurred, directly or indirectly, by a company on an advertisement in any publication, being a publication in the nature of a souvenir, brochure, tract, pamphlet or the like, shall also be deemed,—
(i) where such publication is by or on behalf of a political party, to be a contribution of such amount to such political party, and
(ii) where such publication is not by or on behalf of, but for the advantage of a political party, to be a contribution for a political purpose.
(3) Every company shall disclose in its profit and loss account the total amount contributed by it under this section during the financial year to which the account relates.
(3A) Notwithstanding anything contained in sub-section (1), the contribution under this section shall not be made except by an account payee cheque drawn on a bank or an account payee bank draft or use of electronic clearing system through a bank account:
Provided that a company may make a contribution through any instrument, issued pursuant to any scheme notified under any law for the time being in force, for contribution to the political parties.
Comment: Section 182(3) Says Every Company which made a political contribution is required to disclose the amount in its profit and loss account during the year.
Section(182)(3A) Says that the company only use banking channel for contribution. Political contribution cannot be given in cash
(4) If a company makes any contribution in contravention of the provisions of this section, the company shall be punishable with fine which may extend to five times the amount so contributed and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to six months and with fine which may extend to five times the amount so contributed.
Comment: Section 182(4) Says About punishment if company contravention any provision of these sections then Company, as well as every officer of the Company who is in default, shall be punishable.
Explanation.— For the purposes of this section, “political party” means a political party registered under section 29A of the Representation of the People Act, 1951.
Section 182- This Section corresponds to section 293A of CA 1956. It Seeks to provide the manner to which a company shall be able to contribute the amount to any political party or to any person for a political purpose. The Section further provides the manner in which every company shall disclose in its profit and loss account any amount so contributed by it during any financial years. This section further provides penal provision in case the company contravenes the provision. Also after the finance act, 2017 came into force restriction regarding the amount of contribution also be Removed.
AUTHOR- CS AKASH VERMA, Company Secretary in Practice from Delhi and can be reached at email@example.com or 7503688152.