Lok Sabha Question No. 4130 (UNSTARRED), answered on 2022-03-28
Subject: Relaxation to Corporates
Ministry: CORPORATE AFFAIRS
Asked by: N.K. Premachandran

## GOVERNMENT OF INDIA MINISTRY OF CORPORATE AFFAIRS

## LOK SABHA UNSTARRED QUESTION NO.4130 ANSWERED ON MONDAY, THE 28 th  MARCH, 2022 CHAITRA 7, 1944 (SAKA)

## RELAXATION TO CORPORATES QUESTION

## 4130. SHRI N.K. PREMACHANDRAN:

Will the Minister of CORPORATE AFFAIRS be pleased to state:

- (a) whether the Government has granted relaxation and exemption to the corporates on account of Covid-19 and if so, the details thereof;
- (b) whether the Government has granted tax exemption to the corporate due to Covid19 and if so, the details of amount given on that account;
- (c) whether the Government has relaxed the rules and regulations for the interest of the corporates considering the Covid-19 and if so, the details thereof;
- (d) whether the Government has collected Corporate Social Responsibility (CSR) fund from  the  corporates  on  account  of  Covid-19  and  if  so,  the  details  of  total  amount received from the Corporates as CSR fund; and
- (e) whether the Government proposes to identify and declare the NGOs entitled to avail the CSR fund and if so, the details thereof including the list of NGOs in Kerala recognised for receiving CSR fund from the corporates?

## ANSWER

MINISTER OF STATE (INDEPENDENT CHARGE) OF THE MINISTRY OF STATISTICS AND PROGRAMME IMPLEMENTATION; MINISTER OF STATE (INDEPENDENT CHARGE) OF THE  MINISTRY  OF  PLANNING  AND  MINISTER  OF  STATE  IN  THE  MINISTRY  OF CORPORATE AFFAIRS

[RAO INDERJIT SINGH]

- (a)  to  (c):-  Ministry  of  Corporate  Affairs  has  taken  various  measures  to  reduce  the compliance burden considering the impact of COVID-19 pandemic:-
- (i) The Companies Fresh Start Scheme, 2020 was launched to make a fresh start for companies to become fully compliant by allowing them to file belated documents in MCA 21 registry without any additional fees from 1 st  April to 31 st  December, 2020. The

said scheme had also given immunity from prosecutions and proceedings for imposition of penalty which might arise on account of such delayed filing of documents. (ii) LLP Settlement Scheme, 2020 was introduced to provide a one-time relaxation in additional fees to the defaulting Limited Liability Partnerships ('LLPs') to make good their defaults by filing pending documents with the Registrar of Companies ('ROC' or 'Registrar').  The said scheme was initially rolled out from 16.03.2020 to 31.03.2020 for certain filings by LLPs.  However, due to the COVID 19 pandemic, the modified further expanded scheme to cover all e-forms was rolled out from 01.04.2020 to 31.12.2020. Under the said scheme, the defaulting LLPs were permitted to file belated documents. (iii)  Keeping in view the second COVID wave and considering the difficulties arisen due to resurgence of COVID-19 pandemic, the Ministry had granted relaxation on levy of additional fees for companies / LLPs in filing certain forms (other than a CHG-1 Form, CHG-4  Form  and  CHG-9  Form).  Accordingly,  no  additional  fees  was  levied  upto 31 st   August,  2021  for  the  delayed  filing  of  forms  (other  than  charge  related  forms referred above) which were due for filing during 1 st  April, 2021 to 31 st  July, 2021. For such delayed filings upto 31 st  August, 2021 only normal fees was payable. (iv) In the wake of COVID 19 and in order to provide relief to law abiding companies, a scheme  was  launched  for  relaxation  of  time  for  filing  forms  related  to  creation  or modification of charges under the Companies Act, 2013 during the period from 01st March to 31 st  December, 2020. (v)  Considering the difficulties arisen due to the COVID -19 pandemic, the Ministry vide General Circular No. 7/2021 dated 03.05.2021 and General Circular No. 12/2021 dated 30.06.2021 had  granted relaxation of timelines and  waived  off fees/additional fees/advalorem fees as the case may be in filing of forms relating to creation/modification of charges (CHG-1 form CHG-9 form) by any company or charge holder. In terms of section 77 of Companies Act a charge or modification thereof is required to be filed mandatorily within a maximum period of 120 days from the date of its creation or modification with fees/additional fees/advalorem fees as applicable. By the aforesaid circular, where filing of charge or modification thereof was due before 1st April 2020-21 and period of 120 days were not lapsed from its creation or modification, fees/additional fees/ advalorem fees were waived off and further rigid time line of 120 days for filing of  charge related form were relaxed by not counting certain period for the purpose of reckoning the period of 120 days for filing of charge or modification thereof. (vi)  Condonation  of  Delay  Scheme  was  launched  for  Companies  restored  by  NCLT between  1 st   December,  2020  to  31 st   December,  2020  under  section  252  of  the Companies Act, 2013. The Scheme provided for condonation of delay in filing forms with the Registrar and waived off payment of additional fees. This Scheme was in operation from 01st February 2021 and was available for filing of certain overdue e-forms by such

- companies till 31st March 2021.

(vii) In order to provide relief to the companies in view of COVID-19 pandemic, companies have been allowed to conduct Board Meetings through Video Conference  (VC)  or  other  audio-visual  means  for  passing  resolutions  in  respect  of matters which were earlier required to be passed in meetings which required physical presence of directors by amending the Companies (Meetings of Board and its Powers) Rules 2014 from time to time during COVID-19 pandemic.  Such facility to the companies was initially allowed till 30 th  June, 2021. (Initially it was till 30.06.2020, then extended to 30.09.2020 and 31.12.2020).  Thereafter, considering the second COVID wave, Rule 4 of the Companies (Meetings of Board and its Powers) Rules, 2014 had been omitted vide notification dated 15.06.2021 to provide that all the matters can be deliberated & resolutions  passed by Board of Directors through video conferencing or other audio visual means. The measure has provided increased flexibility to Boards of companies for  conducting  Business  and  further  the  Ease  of  Doing  Business  objective  of  the Government.

(viii) The companies have been allowed to hold Extraordinary General Meetings (EGMs) through Video Conferencing (VC) or other audio-visual means (OAVM) complemented with  e-Voting  facility/simplified  voting through  registered  emails  till 30 th   June, 2021.    Considering  the  second  wave  of  COVID-19,  the  Ministry  has  extended  the aforesaid time limit to 30 th  June, 2022.

(ix) The companies whose Annual General Meetings (AGMs) were due to be held in the year 2020 or become due in the year 2021 or 2022 have been allowed to conduct their AGMs  through  Video  Conferencing  (VC)  or  Other  Audio-Visual  Means  (OAVM)  on  or before 30.06.2022.  Owing to the difficulties in sending physical copies of the financial statements, the companies were also allowed to send the financial statements, along with Board's reports, Auditor's reports and other documents required to be attached therewith, only through email.

(x) The Registrar of Companies on the advice of the Ministry had accorded  extension of three months from the due date of  holding of Annual General Meeting for the financial year ended on 31 March, 2020. Similarly, extension of time in holding of AGM for the financial year ended on 31.03.2021 had also been granted by RoCs for a period of 2 months as per advice of the Ministry.

(xi)  Quality of disclosures were strengthened through amendments made in the formats of financial statements, Companies (Accounts) Rules, Companies (Audit and Auditor's) Rules  and  the  Companies  (Auditor's  Report)  Order,  2020.  The  Companies  (Auditor's Report) Order, 2020 had been made applicable from the audit of financial statements for  the  financial  year  2021-22  onwards,  instead  of 2019-20,  to  ease  the  compliance requirement on auditors and the companies.

(xii) The Companies (Indian Accounting Standards) Rules, 2015 had been amended vide notification dated 18.06.2021 inter-alia to extend the benefits of COVID-19 related rent concession from the initial date of 30 th  June, 2021 to 30 th  June, 2022.

(xiii)   The mandatory requirement of holding meetings of the Board of the companies within the intervals provided in section 173 of the Companies Act, 2013 (CA-13) (120

days) was extended by a period of 60 days till next two quarters i.e., till 30th September, 2020.  Considering the second COVID wave, the Ministry further extended the aforesaid relaxation  for  the  year  2021-22  also  and  accordingly  the  time  gap  between  two consecutive meetings of the Board could extend to 180 days during the Quarter - April to June 2021 and Quarter - July to September, 2021, instead of 120 days as required in the Companies Act, 2013.

(xiv)   Independent Directors (IDs) of a company have been given relaxation from holding atleast one mandatory meeting amongst themselves and accordingly for the financial year 2019-20, if the lDs of a company have not been able to hold such a meeting, the same has not been viewed as a violation.

(xv)    The  Ministry  enhanced  the  period  to  thirteen  months  from  1 st   December, 2019, within which existing Independent directors may apply online for inclusion of their names in the databank for Independent Directors vide amendments in the Companies (Appointment  &  Qualification  of  Directors)  Rules,  2014.    Further,  the  Companies (Creation  and  Maintenance  of databank  of  Independent  Directors)  Rules,  2019  have been amended vide notification dated 18.06.2021 to provide that in case an individual has delayed in applying to the Institute for inclusion of his name in the data bank of Independent Directors or in case of delay in renewal thereof, the Institute shall allow such inclusion or renewal, as the case may be, after charging a further fees of one thousand rupees on account of such delay. Through this amendment, requests made by a large number of stakeholders to grant additional time for delayed applications in view of Covid-19 pandemic have been addressed.

(xvi)   Timeline for creation of deposit repayment reserve of 20% under section 73(2)(c) of  CA-13  and  to  invest  or  deposit  15%  of  amount  of  debentures  under  rule  18  of Companies (Share Capital and Debentures) Rules, 2014 was extended till 31 st  December, 2020.

(xvii)    An  additional  period  of  180  more  days  has  been  allowed  to  comply  with  the requirement of filing a declaration  for  Commencement  of  Business  by  newly incorporated companies.

(xviii)   Non-compliance of minimum residency in India for a period of at least 182 days by at least one director of every company, under Section 149 of the CA-13 is not being treated as a non-compliance for the financial year 2019-20 and 2020-21.

(xix) Till 31 st  December, 2020, the inability to dispatch the notice for Rights Issues by listed companies to their shareholders through registered post or speed post or courier would not be viewed as violation of section 62(2) of the Act provided these companies comply with the SEBI Circulars dated 6 th  May, 2020 and 24 th  July, 2020 which inter-alia provide the mode/manner of issuance of notice by electronic  transmission by listed companies.

(xx) Requirement for investing 15% of amount of debentures maturing in a particular year in specified instruments has been done away with for Listed companies & NBFCs when such debentures are issued on a private placement basis.

(xxi) Time allowed to Auditors and Audit Firms for filing NFRA-2 form with the NFRA has been extended till a total period of 270 days in view of the difficulties faced during COVID-19 related disruption.

(xxii) The expenditure incurred by companies on activities relating to Central Armed Police  Forces  (CAPF)  and  Central  Para  Military  Forces  (CPMF)  Veterans,  and  their dependents including widows has been considered as eligible CSR expenditure.

(xxiii) Last date of submission of Cost Audit Report by the Cost Auditor to the management of the company has been extended till 31 st  December 2020 and additional fee has been relaxed for filing of CRA-4 (form for filing of cost audit report) for financial year 2019-2020.  For the financial year 2020-21 also, the Ministry has granted extension of last date for filing of Cost Audit Report to the Board of Directors under Rule 6(5) of the Companies (Cost Records and Audit) Rules, 2014 upto 30 th  November, 2021.

(xxiv) In August, 2020, Companies (CSR Policy) Rules, 2014 were amended to enable companies to undertake research and development of new vaccine, drugs and medical devices related to COVID-19 in the normal course of business as an eligible CSR activity for three financial years, beginning from financial year 2020-21.

2.   Further, the Central Board of Direct Taxes (CBDT) in the Department of Revenue, Ministry of Finance has stated on 22.03.2022 that Government has already taken several steps for the relief of all taxpayers including corporate taxpayers. The details of the steps taken are as follows:
2. (I) The Government extended various key tax compliance deadlines such as extension in the date of filing return of income, furnishing of tax audit report etc. Besides above, various  time  limits  specified  in  the  Income-tax  Act,  1961  (the  IT  Act)  for  various compliances by the taxpayers like filing of appeals, rectification applications, response to  the  notices,  application  for  approval/registration,  etc.  and  the  actions  by  the departmental officers like passing of assessment orders, granting approvals/registration etc. has also been suitably extended.
3. (II) The Government has also undertaken the following measures to boost liquidity in the hands of the taxpayers including corporate taxpayers:
4. (i)  In  order  to  provide more funds at the disposal of the taxpayers, the rates of Tax Deduction at Source (TDS) for non-salaried specified payments made to residents and the rate of Tax Collection at Source (TCS) for the specified receipts was reduced by 25% for the period from 14th May, 2020 to 31" March, 2021.
5. (ii) In order to provide relief to the taxpayers, it was provided that reduced rate of interest of 9% shall be charged for non-payment of Income-tax (e.g.

advance  tax, TDS, TCS) Equalization Levy, Securities Transaction Tax (STT), Commodities Transaction Tax (CTT) which are due for  payment  from 20.03.2020  to 29.06.2020 if they are paid by 30.06.2020. Further, it has also been provided that no penalty/ prosecution shall be initiated for these non-payments.

(iii) In  order  to  provide  relief  to  small  and  middle-class  taxpayers,  the  date  for payment of self- assessment tax for financial year 2019-20 & 2020-21 in the case of a

taxpayer whose self- assessment tax liability is up to Rs. 1 lakh was extended along with the extension of due dates for the return of income discussed above. (III)    The  amendments  made  to  the  IT  Act  to  boost  economy  and  provide  relief  to taxpayers in the background of COVID- 19: (i) In order to reduce the impact of COVID-19 for the companies to set up the new companies  or  commence  manufacturing  or  production,  the  Finance  Bill,  2022  has proposed to amend section ll5BAB of the IT Act to extend the last date to commence manufacturing or production from 31.03.2023 to 31.03.2024. (ii) In order to factor in delays due to the pandemic and promote such eligible startups, the Finance Bill, 2022 has proposed to amend the provisions of section 80-IAC of the IT Act to extend the period of incorporation of eligible start-ups to 31.03.2023 (iii) Increase  in  the  safe  harbour  limit  for  differential  between  circle  rate  and agreement value from 10% to 20% for primary sale of residential units of value up to Rs. 2 crores during a specified period. [Finance Act, 2021]. (iv) In  order  to  increase  the  supply  of  affordable  house,  the  eligibility  period  for claiming tax holiday for affordable housing project was also extended by one year to 31st March, 2022 [Finance Act, 2021]. (v) In order to promote supply of Affordable Rental Housing for the migrant workers, a  new  tax  holiday  was  provided  for  the  notified  Affordable  Rental  Housing  Projects [Finance Act, 2021]. (vi)  Taxpayers' Charter - The Hon'ble Prime Minister has also launched a 'Taxpayer's Charter'.  The  Charter  reflects  certain  principal  commitments  of  the  Income  Tax Department towards the taxpayer. With its adoption, India joins other major economies in the world like USA, UK, Canada and Australia which too have adopted and published Charter as a gesture of their commitment towards their taxpayers. The Charter will go a long way in strengthening the trust between the taxpayer and the tax administration. It will also help in enhancing the efficiency of the delivery system of the Income Tax Department. [Adopted on 13 th  August, 2020] (vii)    Pre-filling  of  Income-tax  Returns  -  In  order  to  make  tax  compliance  more convenient,  pre-  filled  Income  tax  Returns  (ITR)  have  been  provided  to  individual taxpayers.  The  ITR  form  now  contains  pre-filled  details  of  certain  incomes  such  as salary income. The scope of information for pre-filing has further been expanded by including information such as bank interest, dividends etc. (viii)    New  Form  26AS  -  In  order  to  ease  the  compliance  by  the  income-  tax compliances,  a  new  Form-26AS  has  been  notified.  This  new  form  contains  all information of deduction or collection of tax at source, specified financial transaction, payment of taxes, demand and refund, pending and completed proceedings. (d):- Schedule VII of the Companies Act, 2013 provides the eligible list of activities that can be undertaken by the companies as  Corporate Social Responsibility (CSR). The Ministry vide General Circular No. 14/2021 dated 25 th  August, 2021 clarified that items mentioned  in  Schedule  VII  are  broad  based  and  can  be  interpreted  liberally.    The Ministry vide General Circular no. 10/2020 dated 23.03.2020 had clarified that CSR funds may be spent by the Companies for various activities related to COVID-19 under item no. (i) and (xii) promoting healthcare including preventive healthcare and sanitation, and  disaster  management  respectively.  Further,  vide  General  Circular  no.  05/2021,

09/2021 and 13/2021 dated 22.04.2021, 05.05.2021 and 30.07.2021, the Ministry had also clarified that spending of CSR funds for setting up makeshift hospitals and temporary COVID care facilities and 'creating health infrastructure for COVID care', 'manufacturing and supply of Oxygen concentrators, ventilators, cylinders and other medical equipment for  countering  COVID-19'  and  COVID-19  vaccination  for  persons  other  than  the employees and their families, are eligible CSR activities. Under  the  Act,  CSR  is  a  Board  driven  process  and  the  Board  of  the  company  is empowered to plan, decide, execute and monitor CSR activities of the company based on the recommendation of its CSR Committee. The Government does not issue any directions in this regard. (e):- In legal framework for CSR, the word 'Non-governmental Organisation (NGO)' has nowhere  been  defined.  However,  section  135  of  the  Act  read  with  Rule  4  of  the Companies  (CSR  Policy)  Rules,  2014  prescribes  that  the  Board  of  the  Company  is empowered to undertake its CSR activities either by itself or through implementing agencies, namely: (i) a company established under section 8 of the Act, or a registered public trust or a registered society, registered under section 12A and 80G of the Income Tax Act, 1961 (43 of 1961), established by the company, either singly or along with any other company, or (ii) a company established under section 8 of the Act or a registered trust or a registered society, established by the Central Government or State Government; or (iii) any entity established under an Act of Parliament or a State legislature; or (iv) a company established under section 8 of the Act, or a registered public trust or a registered society, registered under section 12A and 80G of the Income Tax Act, 1961, and having an established track record of at least three years in undertaking similar activities.

The  Companies  (CSR  Policy)  Rules,  2014  were  amended  on  22.01.2021  and registration  of  implementing  agencies  with  Central  Government  has  been  made mandatory w.e.f. 01.04.2021. However, state wise list of implementing agencies is not maintained by this Ministry.

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