CSR Implementation u/s 135 of Co. Act, 2013
This query is : Resolved
13 June 2023
Can the Company A disburse its CSR fund to B ( the coordinating agency -registered u/s 12A and 80G of Income Tax Act and having CSR registration No. under Co. Act) for onward disbursement of the same fund to C ( (the Implementing agency- which is also registered u/s 12A and 80G of Income Tax Act have CSR registration No. under Co. Act). The coordinating agency will coordinate and monitor the implementation of the CSR project.
Read more at: https://www.caclubindia.com/experts/ask_query.asp.) for implementation of the CSR projects/activities.
Read more at: https://www.caclubindia.com/experts/ask_query.asp
Read more at: https://www.caclubindia.com/experts/ask_query.asp.) for implementation of the CSR projects/activities.
Read more at: https://www.caclubindia.com/experts/ask_query.asp
06 July 2024
Yes, it is possible for Company A to disburse its CSR funds to the coordinating agency B, which in turn disburses the funds to implementing agency C. Here's how it typically works:
1. **Coordinating Agency (B):**
- The coordinating agency B is registered under Section 12A and 80G of the Income Tax Act, which makes it eligible to receive donations and issue tax exemption certificates.
- Additionally, it has a CSR registration number under the Companies Act, indicating its recognition to receive CSR funds from companies.
2. **Implementing Agency (C):**
- The implementing agency C is also registered under Section 12A and 80G of the Income Tax Act and has a CSR registration number under the Companies Act.
- This agency is responsible for carrying out the actual CSR activities on the ground, as per the project requirements specified by Company A.
3. **Role of Coordinating Agency (B):**
- Coordinating agency B acts as an intermediary between Company A and implementing agency C.
- It coordinates and monitors the implementation of the CSR project, ensuring that the funds are utilized effectively for the intended CSR activities.
- B ensures compliance with all legal requirements and provides necessary reports and documentation to Company A regarding the progress and impact of the CSR project.
4. **Legal Compliance:**
- The arrangement is legally permissible as long as all entities involved (Company A, coordinating agency B, and implementing agency C) are duly registered and compliant with the provisions of the Income Tax Act and the Companies Act.
- Company A must ensure that the funds disbursed to B are utilized for legitimate CSR activities and that B properly monitors the utilization by C.
5. **Documentation and Reporting:**
- It is essential for Company A to maintain proper documentation of the CSR funds disbursed, agreements with B and C, progress reports, and utilization certificates.
- Regular reporting and updates from B and C help Company A demonstrate compliance with CSR obligations and showcase the impact of its CSR initiatives.
In conclusion, using a coordinating agency registered under Section 12A and 80G of the Income Tax Act to disburse CSR funds to an implementing agency is a structured approach to ensure efficient utilization and monitoring of CSR initiatives while maintaining compliance with legal requirements.
1. **Coordinating Agency (B):**
- The coordinating agency B is registered under Section 12A and 80G of the Income Tax Act, which makes it eligible to receive donations and issue tax exemption certificates.
- Additionally, it has a CSR registration number under the Companies Act, indicating its recognition to receive CSR funds from companies.
2. **Implementing Agency (C):**
- The implementing agency C is also registered under Section 12A and 80G of the Income Tax Act and has a CSR registration number under the Companies Act.
- This agency is responsible for carrying out the actual CSR activities on the ground, as per the project requirements specified by Company A.
3. **Role of Coordinating Agency (B):**
- Coordinating agency B acts as an intermediary between Company A and implementing agency C.
- It coordinates and monitors the implementation of the CSR project, ensuring that the funds are utilized effectively for the intended CSR activities.
- B ensures compliance with all legal requirements and provides necessary reports and documentation to Company A regarding the progress and impact of the CSR project.
4. **Legal Compliance:**
- The arrangement is legally permissible as long as all entities involved (Company A, coordinating agency B, and implementing agency C) are duly registered and compliant with the provisions of the Income Tax Act and the Companies Act.
- Company A must ensure that the funds disbursed to B are utilized for legitimate CSR activities and that B properly monitors the utilization by C.
5. **Documentation and Reporting:**
- It is essential for Company A to maintain proper documentation of the CSR funds disbursed, agreements with B and C, progress reports, and utilization certificates.
- Regular reporting and updates from B and C help Company A demonstrate compliance with CSR obligations and showcase the impact of its CSR initiatives.
In conclusion, using a coordinating agency registered under Section 12A and 80G of the Income Tax Act to disburse CSR funds to an implementing agency is a structured approach to ensure efficient utilization and monitoring of CSR initiatives while maintaining compliance with legal requirements.
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