TMI Blog2020 (1) TMI 1583X X X X Extracts X X X X X X X X Extracts X X X X ..... tioned that in the financial statement, the company has inadvertently missed the separate disclosure as per Section 182(3) of the Act. But on factual matrix, if it is taken into consideration, the said amount of Rs.15,00,000/- has been paid to Aam Adami party through cheque that too, account payee for which, the declaration has also been made - Taking into consideration of the object and spirit of law, it indicates that the main object of law is that such donations, which are going to be given in larger quantity, it will not affect the economy of the country and thereafter the amendment, which has been made also disclose the fact that the payment has to be made through cheque. In the light of letter and spirit, if it is taken into account, it is only an irregularity not an illegality. Even the amendment was given effect from 01.04.2017 therein, it is not necessary to declare the name of political party to which the amount has been paid. In that light also, there is no intentional violation of Section 182 of the Act. However, the petitioners/accused being a reputed company, they should have taken care of the said aspect while making a declaration but it is not an intentional act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnexure-J dated 27.02.2019 and to the said show cause notice, he has given a reply dated 06.03.2019 wherein, he has made it clear that the company has contributed an amount of Rs.15,00,000/- towards the political party namely 'Aam Adami party' vide cheque bearing No.148371 dated 31.12.2016 drawn on J K Bank and the copy of the cheque has also been made available along with the said reply notice. Even all these materials, which are made available, none of them have been taken note of and a false complaint has been registered. It is his further contention that as per Section 135 of the Act, in a prescribed format he has clearly disclosed the CSR donations to the tune of Rs.1,36,39,924/- and in the reply it has been clearly stated that an amount of Rs.15,00,000/- has been contributed towards the political party fund. Even on combined reading of the balance statement filed as prescribed and the reply, it indicates that the said declaration is in accordance with law. It is his further submission that an amendment has been brought on 31.03.2017 to the provisions of Section 182(3) of the Act and in view of the amended provision, it does not mandate that the declaration should di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inadvertently missed the separate disclosure requirement as per Section 182(3) of the Act. That itself makes it clear that the mandate of Section 182 of the Act has not been followed by the petitioners/accused. It is his further submission that when once, it has been specifically contended in the reply that there is an inadvertence or there is a mistake, then it is a question of fact, which has to be decided by the trial Court while deciding the case. It is further submitted that looking from any angle, the provisions of Section 182 of the Act have not been properly and legally complied by the petitioners/accused and even the show cause notice and the complaint clearly disclose that there was an intention in suppressing the said fact and thereby, the petitioners/accused are liable to be punished as contemplated under Section 182(4) of the Act. On these grounds, he prayed to dismiss the petition. 7. I have carefully and cautiously gone through the submissions made by the learned counsel appearing for the parties and perused the records. 8. For the purpose of brevity, I quote Section 182 of the Act before the amendment Act of 2017 and after the amendment brought by virtue of am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relates, giving particulars of the total amount contributed and the name of the party to which such amount has been contributed. (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. 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 (43 of 1951). Section 182 of Companies Act, 2013 (After Finance Act, No.7 of 2017) 182. Prohibitions and Restrictions Regarding Political Contributions.- (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: Provided that no such contribution shall be made by a company unless a r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the purposes of this section, political party means a political party registered under section 29A of the Representation of the People Act, 1951 (43 of 1951). 9. On going through the earlier Act, it makes clear that every company should disclose its profit and loss account, in which the amount contributed to any political party during the financial year has to be declared. But by amendment to Section 182(3) of the Act has been substituted and now the only disclosure has to be made about the total contribution made during the financial year. In that light, it makes clear that now after the amendment, the mentioning of declaration with regard to any political party is not necessary. But as rightly contended by the learned counsel for the respondent, the disclosure is mandatory. The word used is shall . In that regard if the entire i.e., letter and spirit of the Section is taken into consideration, no exemption has been given to any company to not to disclose any contribution made in this behalf. However, the only question, which remains for the consideration is that whether a CSR declaration in composite with the other declaration made is considered to be not a declaration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion.- For the purposes of this section average net profit shall be calculated in accordance with the provisions of section 198. 10. On close reading of Section 135 of the Act, it makes very clear that the CSR declaration has to be made as stated therein, in a prescribed form. During the course of argument, the learned counsel for the petitioners brought to the notice of this Court that the declaration has been made in a prescribed form disclosing that an amount of Rs.1,36,39,924/- has been declared as CSR amount. It is the contention of the learned senior counsel that the remaining amount of Rs.15,00,000/-, which has been declared in the balance sheet is nothing but a political declaration and even, it has been given in the reply dated 06.03.2019 that the said amount is towards political party i.e., Aam Adami party and the said amount has also been paid through cheque bearing No.148371 dated 31.12.2016. 11. By considering the material facts and circumstances, it indicates that though under the law, the declaration has to be made separately but as rightly pointed out by the learned counsel for the respondents in the reply also, it has been specifically mentioned that in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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