Tribunal permits revision of CSR report to correct error, emphasizing compliance with Companies Act.

The Tribunal allowed the petitioner, M/S. Technicolor India Private Limited, to revise the Board's Report to rectify the mismatch in Corporate Social Responsibility (CSR) expenditure for the fiscal year ending 31st March 2018. The Tribunal emphasized that the revision was solely for correcting the error and not for compounding any offence. The company was directed to comply with all relevant provisions of the Companies Act, 2013. The petition was disposed of without any costs, preserving the rights of statutory authorities to take action for any violations of the Companies Act.

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Issues Involved:
1. Petition to revise the Board's Report under Section 131 of the Companies Act, 2013.
2. Mismatch in the amount spent on Corporate Social Responsibility (CSR) activities.
3. Compliance with Section 135 of the Companies Act, 2013 regarding CSR.
4. Objections raised by the Regional Director and Income Tax Department.
5. Tribunal's authority to approve the revision of the Board's Report.

Detailed Analysis:

1. Petition to Revise the Board's Report:
The petitioner, M/S. Technicolor India Private Limited, filed C.P.No. 124 of 2019 under Section 131 read with Section 134 of the Companies Act, 2013, and Rule 77 of the NCLT Rules, 2016, seeking permission to revise the Board's Report, specifically the annexure related to Corporate Social Responsibility (CSR). The company discovered a mismatch in the reported CSR expenditure in the Director's Report for the fiscal year ending 31st March 2018, compared to the audited financials. This error was attributed to human lapse and incorrect input from the relevant department.

2. Mismatch in CSR Expenditure:
The actual CSR expenditure for FY 2017-18 as per audited financials was Rs. 3,80,240, whereas the amount shown in the annexure to the Director's Report was different. The Board approved the incorrect draft Director's Report on 21st September 2018, and the error was identified during the pre-scrutiny stage of filing the audited financials. The company sought to rectify this error by revising the Board's Report under Section 131(1)(b) of the Companies Act, 2013.

3. Compliance with Section 135 of the Companies Act, 2013:
The Regional Director observed that the company did not meet the statutory requirement of having a CSR committee with the requisite number of members and failed to spend the required CSR amount as per Section 135(5) of the Companies Act, 2013. The company spent only Rs. 3,00,240 against the prescribed amount of Rs. 1,13,79,802, and did not provide specific reasons for the shortfall in the Director's Report. The Regional Director suggested that the company should compound the offence under Section 441 of the Companies Act, 2013.

4. Objections Raised by the Regional Director and Income Tax Department:
The Regional Director argued that the revision should be confined to correcting accounts and not for making the offence good. The Income Tax Department verified the CSR expenditure and found no objection to the petition. The company clarified that the petition was solely for correcting the mismatch in CSR expenditure and not for compounding any offence.

5. Tribunal's Authority to Approve the Revision:
The Tribunal examined the provisions of Section 131 and Section 135 of the Companies Act, 2013, and concluded that the petition was filed in accordance with the law. The Tribunal emphasized that the issue at hand was to seek approval for revising the Board's Report and not for compounding any offence. The Tribunal allowed the petition, permitting the company to revise the Board's Report as sought, while directing compliance with all relevant provisions of the Companies Act, 2013, and associated rules.

Conclusion:
The Tribunal permitted the petitioner to revise the Board's Report to correct the mismatch in CSR expenditure, ensuring compliance with Section 135 of the Companies Act, 2013. The order was passed without prejudice to the rights of statutory authorities to initiate proceedings for any violations of the Companies Act. The petition was disposed of with no order as to costs.

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