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2022 (6) TMI 927 - HC - Companies LawProsecution proceedings for Non-disclosure of contribution in the Profit and loss Account - political contribution/donation to the tune of Rs. 10.00 lakhs each in two occasion to a particular party during a financial year 2016-17 - company failed to disclose the political contribution in its profit and loss account - violation of provisions of sub-section (3) of Section 182 of Companies Act - HELD THAT:- On perusal of the records, the petitioner is said to be the Company registered under the Companies Act and it is alleged that during the year 2016-2017, the company has donated Rs. 10.00 lakhs each to a political party but they have not declared the same to the Registrar of the Company as per Section 182 of the Companies Act. Thereby, there is a violation of Sub-section 3 of Section 182 of the Companies Act, whereas the petitioner though admitted regarding donation given to a political party i.e., Aam Aadmi Party (AAP) and it is alleged that they declared the same in the income tax returns in profit and loss account, assets and liabilities statement and in the information sent to the Registrar of Companies and in the format, they have mentioned as miscellaneous expenditure which includes the donations. The expenditure was offered on the show cause notice issued by the respondent, therefore, it is contended that there is no offence committed for violation of Section 182 of the Companies Act. A detailed explanation is given to the respondent regarding resolution, payment and declaration in the profit and loss account in the head of donations. Therefore, it is contended that there is no violation of Section 182(3) of Companies Act. Once the company has disclosed the political donations in the name of miscellaneous expenditure and declaring the same before the Income Tax authorities in the ITR and claimed the exemption and also properly explained in their reply to the show cause notice, it cannot be said that the petitioner-company has committed any violation under Section 182(3) of the Companies Act. Looking to the facts and circumstances of the present case, it cannot be said that there is a criminal intention for not specifically mentioning the name of the political party as political contribution. When there is no specific column in the format of the disclosure of the financial status of the company, the question of allegation for non disclosure of political donation does not arise. There is no criminality or non disclosure which amounts to violation for constituting the offence under Section 182(3) of the Companies Act, therefore, conducting proceedings is abuse of process of law and hence, it is liable to be quashed - Petition allowed.
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