By Partha Pratim Bora

1.   Introduction
Business and society are two facets of the same coin. Hence it is the duty of the corporate houses to contribute towards the society through a meaningful way. Corporate social responsibility is that component through which a corporate house can contribute towards the welfare of the society in general. Corporate Social Responsibility has been viewed as a criterion of measuring obligation of business houses towards the society in general & peripheral area of its location in particular. Employees toil hard to make an industry grow by providing their resources. On the other hand people sacrifice a lot for the opportunity cost of the resources mobilised in plantation. So the corporate houses in return should serve the society. Assam is an agricultural based state. The net cultivated area of the State  is 28.11 lakh hectares(2010-11) which is about 88 percent of the total land available for agricultural cultivation in the State(Economic Survey-Assam, Directorate of economics and statistics Govt. of Assam, Guwahati 2012-2013). There are 765 Tea Estates and 64,597 (including small tea Growers) tea gardens available in Assam (Government of Assam, 2012). Maniram Dewan was the first Indian tea planter in Assam.

Corporate Social Responsibility is becoming an increasingly important activity to business nationally & internationally. The broadest definition of CSR is concerned with what is or should be the relationship between global corporations, Government of countries & individual citizens. More locally the definition is concerned with the relationship between a corporation and the local society in which it resides or operates. Another definition is concerned with the relationship between a corporation and its stakeholders. CSR is also known by a number of other names, these include corporate responsibility, corporate accountability, corporate ethics, corporate citizenship, responsible entrepreneurship and Triple Bottom Line.

2.   Mandatory Norms of Corporate Social Responsibility in India

Corporate Social Responsibility has been defined in Income Tax Act, 1961 (amendment in 2014) and Companies Act 2013.

The Ministry of Corporate Affairs (MCA) had introduced the Corporate Social Responsibility Voluntary Guidelines in 2009. These guidelines have now been incorporated within the 2013 Act and have obtained legal sanctity. Section 135 of the 2013 Act, seeks to provide that every company having a net worth of 500 crore INR, or more or a turnover of 1000 crore INR or more, or a net profit of five crore INR or more, during any financial year shall constitute the corporate social responsibility committee of the board.

This committee needs to comprise of three or more directors, out of which, at least one director should be an independent director. The composition of the committee shall be included in the board’s report. The committee shall formulate the policy, including activities specified in Schedule VII, which are as follows:
  • Eradicating extreme hunger and poverty
  • Promotion of education
  • Promoting gender equality and empowering women
  • Reducing child mortality and improving maternal health
  • Combating human immune deficiency virus, acquired immune deficiency syndrome, malaria and other diseases
  • Ensuring environmental sustainability
  • Employment enhancing vocational skills
  • Social business projects
  • Contribution to the Prime Minister’s National Relief Fund or any other fund set-up by the central government or the state governments for socio-economic development and relief, and funds for the welfare of the scheduled castes and Tribes, other backward classes, minorities and women
  • Such other matters as may be prescribed

3. Non- Admissibility of expenditure as CSR under section 37effective from Assessment Year 2015-16
  • Section 135 of the Companies Act, 2013 read with Schedule vii thereto and Companies (Corporate Social Responsibility) Rules, 2014 are the special provision under the new company law regime imposing mandatory CSR obligations.
  • Mandatory CSR obligations under section 135:
  • Every company, listed or unlisted, private or public having a-
       >net worth of Rupees500 crores or more (net worth criterion) or
       >turnover of rupees 1,000 crores or more (turnover criterion) or
      >a net profit of rupees 5 crores or more( net profit criterion) during any              financial year to constitute a CSR committee of the Board;
  • CSR Committee has to formulate CSR policy and the same has to be approved by the Board;
  • Such company to undertake CSR activities as per the CSR policy;
  • Such company to spend in every financial year, at least 2% of its average net profits made in the immediately three preceding financial years, on the CSR activities specified in Schedule VII of the companies Act, 2013.

a) As per Rule 4 of the Companies(CSR) Rules, 2014, the following expenditure are not considered as CSR activity for the purpose of section 135:
i)  Expenditure on activities undertaken in pursuance of normal course of business;
ii)   Expenditure on CSR activities undertaken outside India.
iii) Expenditure which is exclusively for the benefit of the employees of the company or their families;
iv) Contribution to political parties.

b) Under section 37(1) of the Income-Tax Act, only expenditure, not covered under sections 30 to 36, and incurred wholly and exclusively for the purpose of the business is allowed as a deduction while computing taxable business income. The issue under consideration is whether CSR expenditure is allowable as deduction under section 37.

c) It has now been clarified that for the purposes of section 37(1), any expenditure   incurred by an assessee on the activities relating to CSR referred to in section 135 of the Companies Act, 2013 shall not be deemed to been incurred for the purpose of business and hence, shall not be allowed as deduction under section 37.

d) The rationale behind the disallowance is that CSR expenditure, being an application of income, is not incurred wholly &exclusively for the purposes of carrying on business.

e) However, the explanatory Memorandum to the Finance( no 2) Bill, 2014 clarifies that CSR expenditure, which is of the nature described in sections 30 to 36, shall be allowed as deduction under those sections subject to fulfilment of conditions, if any, specified therein.

Before introducing the mandatory CSR norms in Companies Act 2013, several voluntary guidelines have been made in time to time by respective Authority Bodies. Before the Companies Act 2013, the CSR policy was guided by Corporate Social Responsibility Voluntary Guidelines 2009 introduced by The Ministry of Corporate Affairs (MCA). The fundamental principle of the guidance was that each business entity has to be formulated a CSR policy to guide its strategic planning and provide a roadmap for its CSR initiatives, which are an integral part of overall business policy and aligned with its business goals. The policy is framed with the participation of various level executives and duly approved by the Board.

The CSR policy covered the following key elements-
  • Care for all Stakeholders,
  • Ethical functioning,
  • Respect for Workers’  Rights and Welfare,
  • Respect for Human Rights,
  • Respect for Environment,
  • Activities for Social and Inclusive Development

In 2011, the Corporate Social Responsibility Voluntary Guidelines 2009 has been made amendment by the Ministry of Corporate Affairs (MCA) supported by Indian Institute of Corporate Affairs. The  Guidelines  presented  herein  are  a  refinement  over  the  Corporate  Social Responsibility  Voluntary  Guidelines  2009,  released  by  the  Ministry  of  Corporate Affairs  in  December  2009.  Significant  inputs,  received  from  diverse  stakeholder groups  across  the  country  have  been  duly  considered,  and  based  on  these  inputs; appropriate  changes  have  been  made in  the  original  draft  Guidelines  produced  by the Guidelines Drafting  Committee.  This document  therefore  represents  the  consolidated perspective  of  vital  stakeholders  in  India,  and  accordingly  lays  down  the  basic requirements  for  businesses  to  function  responsibly ,  thereby  ensuring  a  wholesome and inclusive  process of economic  growth. These  Guidelines  have  been  developed  through  an  extensive consultative  process  by  a  Guidelines  Drafting  Committee  (GDC)  comprising competent  and  experienced  professionals  representing  different  stakeholder  groups. The  GDC  was  appointed  by  the  Indian  Institute  of  Corporate  Affairs  (IICA). The  Guidelines  are  designed  to  be  used  by  all  businesses irrespective  of  size,  sector  or  location  and  therefore  touch  on  the  fundamental aspects  –  the  'spirit'  -  of  an  enterprise.

The basic core elements of the Guidelines are the following-
  • Businesses  should  develop  governance  structures,  procedures  and  practices  that ensure  ethical  conduct  at  all  levels;  and  promote  the  adoption  of  this  principle across  its  value  chain.
  • Businesses  should  communicate  transparently  and  assure  access  to  information about  their  decisions  that  impact  relevant  stakeholders.
  • Businesses  should  not  engage  in  practices  that  are  abusive,  corrupt,  or  anti -competition.
  • Businesses  should  truthfully  discharge  their  responsibility  on  financial  and other  mandatory  disclosures.
  • Businesses  should  report  on  the  status  of  their  adoption  of  these  Guidelines  as suggested  in  the  reporting  framework  in  this  document.
  • Businesses  should  avoid  complicity  with  the  actions  of  any  third  party  that violates  any  of  the  principles  contained  in  these  Guidelines.

In  August  2012,  the  Securities  and  Exchange  Board  of  India  “mandated inclusion  of  Business  Responsibility  Reports  (“BR  reports”)  as  part  of  the  Annual Reports for top 100 listed entities based on market  capitalization  at BSE and NSE as on  March  31,  2012  (Clause  55,  Listing  agreement).”  Other  entities  can  voluntarily include  the  BR  reports  as  part  of  their  Annual  reports.  This came into effect as on December 31, 2012.

In  2013,  new  guidelines  related  to  CSR  and  Sustainability  was  issued  by  the Department of Public Enterprises. According to the policy document, “Corporate Social Responsibility (CSR) should be viewed as a way of conducting business, which enables the creation and distribution of  wealth  for  the  betterment  of  its  stakeholders,  through  the  implementation  and integration of ethical systems and sustainable management practices.”  The pull factor is from within, and not external to the organization. The guidelines cover multiple areas for CPSE (Central Public Sector Enterprise) functioning in the sphere of CSR.  This may  in fact  be  a  model  that  may  be  informally  adopted  by  the  corporate  sector,  till rules and guidelines are finalized under the new Companies Bill.

It is mandatory to every corporate house to contribute 2% out of profit for the CSR activities or social development. These activities include abiding the provisions of Companies Act and the Income Tax Act. According to Companies act following activities are included under CSR activities- hunger and poverty, education, promotion of women empowerment and gender equality, reducing child mortality and improve maternal health, environmental sustainability, etc. According to Income Tax Act for claiming deduction following expenditure are not considered as CSR activity- expenditure related to normal course of business, expenditure on CSR activities outside India, expenditure for the employees of the company & their family, contribution to political parties, etc.
Though mandatory provisions of CSR has been made in 2013 but, tea industry is being associated with CSR activities since its from beginning. The development of railways is the direct contribution of tea industry. One of the major educational institutions of Assam Handiqe Girls College was also the contribution of a Tea planter’s family. The other two well-known colleges in Dibrughar District namely Hanuman Bosco Kanoi College and Monuhary Devi Kanoi College also the part of the contribution of tea industry. The “vice-Chancellor residence” of Dibrughar University was donated by great tea industrialist Hanuman Bosco Kanoi Deb. Some of the land mark contribution of tea houses individually as well as in group are Machkhowa ITC complex in Guwahati, Assam Valley School at Tezpur, The Tata group of hospital at Sabua, Assam Valley Annual award by the Magor group of institutions, Scholarship to the meritorious students by Williams and Magor group, etc.

Although it is mandatory for all the corporate houses to undertaking the CSR activity, yet in tea industry its nature is different from others. As the ownership of tea estates are categorised into sole-proprietorships, partnership and company basis. So, it is very difficult to maintain the CSR norms by sole-proprietorship and partnership firms.  In the context of convention and practises these tea estates maintain the CSR activities in the form of the cultural needs, social needs, economic needs, etc. Sometimes it is depend upon the collective bargaining agreement between the tea estate management authorities and different trade union of tea estates like Chah Mazdoor Sangha, Assam Tea Labour Union, Cha Bagan Mazdoor Union, etc. At times it is been seen that CSR activities are performed by the tea estates on the basis of local demand of the people of that particular locality.

According to Companies Act and Income Tax Act, basic necessities and benefit for employees are not included in CSR, it is mandatory for every tea estate to provide the basic necessities for the employees and labour according to Plantation Labour Act, 1951(Any land used or intended to be used for growing tea plantation in a area of 25 hectares or more and where 225 or persons are employed are included or termed as tea-estates). These includes- drinking water facility to labour, conservancy, medical facility, canteen, crèche,  education facility, residential facility, housing facility, sickness and maternity benefits, etc. It has been observed that before introduction of mandatory norms under Companies Act, 2013 all the welfare activities are considered as a CSR activity. After introduction of CSR norms under Companies Act 2013, the concept of CSR and welfare activities have been segregated which has been headed by Companies Act, 2013 and Plantation Labour Act, 1951 respectively. Though the benefits of CSR activities are not for the employees of the Tea Estates but they have provided the basic necessities for the employees of the tea estates. Hence, we can divide the CSR activities performed by Tea Estate to the society into two categories- intramural and extramural activities. In the first category all the facilities provided for the employees and labour are included and in second category activities performed for beyond the boundaries of the tea estates.

1.   Conclusion
The tea estates in Assam occupy a landmark position in the industrial arena of not only Assam but also for the North – Eastern – Region. Social expectations are a natural fall out for any community especially from industrial houses which have ascended to a towering height of industrial progress. Regulatory authorities have framed minimum obligatory rules for corporate houses. The Income Tax Authority regulations is an instrument of prohibiting manipulative evasion of CSR responsibilities while the companies Act establishes norm for mandatory allocation of resources under CSR head, Besides international regulation and standards formulated by many institutions namely ILO, WTO, etc, which also provide humanistic protection to labour community can also be construed as having similarity with the concept of welfarism and CSR. It is worth mentioning that welfare activities prevailed in Assam Tea Estates much before formal codification of CSR by the state authorities. The authorities of tea estates under British regime voluntarily undertook social service activities, many of which are today coined under the modern terminology of CSR. Apart from company owned gardens in Assam, there are gardens under the ownership of sole-proprietorship and partnership. It is admittedly true that resources of non-corporate gardens are meagre compared to resources of corporate gardens. The tea companies, besides taking individual initiative for CSR activities, have also contributed in group for CSR.

  • Companies Act, 2013. Universal Law Publishing Co., New Delhi, 2013.
  • Corporate Social Responsibility Voluntary Guidelines 2009, Universal Law Publishing Co., New Delhi, 2009.
  • Govt. of Assam. Economic Survey-Assam 2012-2013, Guwahati: Directorate of economics and statistics, 2013.
  • Govt. of Assam. Statistical Hand Book-Assam 2012-2013, Guwahati: Directorate of economics and statistics, 2013.
  • Income Tax Act 1961(amendment 2014), Universal Law Publishing Co., New Delhi, 2014.
  • Plantation Labour Act, 1951, Universal Law Publishing Co., New Delhi, 1988.

About the Author: The author, Partha Pratim Bora is a Research Scholar, Dept. of Commerce, Gauhati University, Guwahati, Assam.


  1. Thank You for sharing your article, This is an interesting & informative blog. It is very useful for the developer like me. Kindly keep blogging. Besides that Wisen has established as Best Corporate Training in Chennai .

    Nowadays JavaScript has tons of job opportunities on various vertical industry. Know more about JavaScript Framework Training visit Corporate Training Companies in India.

    This post gives me detailed information about the technology. corporate training companies in india

  2. New web site is looking good. Thanks for the great effort. navigate to this website

  3. Feel wild excitement? Spend it in our online casino. Excellent play roulette online Feel what money is with us.


Share Every Sense on Art, Culture & Literature; Travel & Tourism; Commerce & Economy; Science & Technology; etc. Send us your Write-up by Email:


Share every sense on Art, Culture & Literature; Travel & Tourism; Commerce & Economy; Science & Technology; etc. Publish Article, Story, Poetry, Book Review, Travelogue, Recipe and News. Send us your creative contents written or transcreated in English at

Get Free Updates at Your Inbox! Enter Your Email Address:


Twitter Bird Gadget