Skip to main content

Is CSR against the Article 14?

 Is CSR against the Article 14?

Article 14 of the Indian Constitution guarantees equality before the law and equal protection under the law to all citizens of India. Furthermore, Article 14 allows for the classification of legislation in a logical manner. In Re: Special Courts Bill, the Supreme Court has repeatedly held that classification is appropriate only if:

It's based on a comprehensible differential, and the differentia has a plausible relationship to the statute's stated goal.

Only business-type organisations can afford to invest money on CSR. Even if their net worth, earnings, or turnover exceed the statutory limitation, CSR does not apply to partnership firms, limited liability partnerships, or any other sort of organisation.

If a business hits one of the net worth, turnover, or net profit levels, it falls under the purview of Section 135(1) of the Companies Act[31]. As a result, even if a company does not surpass the standards in the future, it must nevertheless invest in CSR projects.

'Average net profits' shall be computed under Section 198 of the Companies Act rules, according to Section 135 of the Companies Act, 2013. Section 198 (4) (l) of the Companies Act[32] permits the set-off of cumulative losses accrued after the effective date of the said Section (but not for periods prior to such effective date) against net profits in determining the 'average net profits' required by Section 135.

As a result, a company that has made profits for the past three fiscal years but has not yet recovered its carried forward losses from the period before to Section 198's effective date will be required to spend on CSR.

As long as the 'average net earnings' standard is met, a loss-making business is required to contribute to CSR in the same way as a profit-making business is.

Finally, corporations registered under Section 8 of the Act are covered by Section 135 of the Act. The section requires businesses to spend their profits solely to further their goals. However, the calculation of net profit for a foreign firm with a subsidiary in India is vague and ambiguous under the Section. In some cases, Article 14 is broken since the classification criteria is not met, and Section 135 treats unequals as equals.
Labels:

Comments

Post a Comment

Popular posts from this blog

Empowering Businesses: Virtual Corporate Law Services

  Empowering Businesses: Virtual Corporate Law Services In the dynamic world of business, legal support is crucial to ensure smooth operations, mitigate risks, and navigate regulatory landscapes. Lexis and Company offers Virtual Corporate Law Services to businesses in the UK, USA, Canada, Singapore, Dubai, and Australia , assisting with mergers, acquisitions, business contracts, compliance, and corporate governance. Key Features of Virtual Corporate Law Services 1. Mergers and Acquisitions (M&A) Legal Support We provide comprehensive legal services for mergers and acquisitions , including due diligence, structuring deals, drafting agreements, and navigating regulatory approvals. Benefits: Ensures smooth and legally sound M&A transactions. Minimizes risks during corporate restructuring. Protects your business interests in high-value deals. Trending Hashtags: #MergersAndAcquisitions #BusinessDeals #CorporateLaw #LegalSupport #VirtualLegalExperts 2. Business Contracts and Ag...
Post a Comment
Read more

Concept of constitutionalism

  Concept of constitutionalism Who Started Constitutionalism? John Locke - The English Bill of Rights is a foundational constitutional document that helped inspire the American Bill of Rights. Political theorist  John Locke  played a huge role in cementing the philosophy of constitutionalism.  Constitution is a written law which describes the structure of Government, the rules according to which the Govt. must work and the boundaries within which the Govt. must work. Constitutionalism   can be defined as the doctrine that governs the legitimacy of government action, and it implies something far more important than the idea of legality that requires official conduct to be in accordance with pre-fixed legal rules. Constitution constitution is the document that contains the basic and fundamental law of the nation, setting out the organization of the government and the principles of the society. Basic norm (or law) of the state; System of integration and organi...
Post a Comment
Read more

Nathulal v. State of Madhya Pradesh AIR 1966 SC 43

 Nathulal v. State of Madhya Pradesh AIR 1966 SC 43 CITATION AIR 1966 SC 43 COURT Supreme Court of India JUDGES/CORAM Justice K.S. Shah and Justice R. Bachawat DATE OF JUDGEMENT 22.03.1965 Facts: The facts of the case are as follows: The appellant was a dealer in a food grains at Dhar in Madhya Pradesh prosecuted in the Court of Additional District Magistrate for possessing in stock maunds and 21/4 seers of wheat for the purpose of sale without license. Subsequently appellant was charged for committing an offence under section 7 of the Essential Commodities Act, 1955. Thereafter the appellant pleaded there was no intention to contravene any provisions of the law and the grains were stored upon filing an application for license and upon believe that it will be issued to him. The appellant further stated that he continued to submit returns on the food grains stored and purchased to the respected authority. Thus, the appellant was acquitted in the Court of Additional District Magistra...
Post a Comment
Read more