4 April 2022
MCA extends timelines for CSR-2 filing and implementation of the audit trail feature
Ministry of Corporate Affairs (MCA) has issued a notification dated 31 March 2022, which extends the timelines for compliances with respect to:
  1. Filing of Form CSR-2; and
  2. Audit trail feature being implemented in accounting software
The announcement of these extensions has been summarized as under:

Extension announced in filing Form CSR-2

On 11 February 2022, the Central Government notified amendments to Companies (Accounts) Rules, 2014. The amended Rules apply to companies required to undertake Corporate Social Responsibility (CSR) activities as prescribed under Section 135 of the Companies Act, 2013 (Act). The Central Government's intent behind this amendment was to closely monitor any irregularities, discrepancies, and mismanagement in CSR contributions.

In accordance with this amendment, companies undertaking CSR as per the requirements of Section 135 of the Act are required to file Form CSR-2 in addendum to Form AOC-4/ AOC-4 XBRL/ AOC-4 NBFC (Ind AS) as applicable. For the financial year 2021-22 under Rule 1B of this notification, Form CSR-2 was to be filed on 31 March 2022.

On 31 March 2022, MCA has announced a notification that extends the date of filing Form CSR-2 from 31 March 2022 to 31 May 2022.

Click here to read our alert summarizing the announcement and features of Form CSR-2.

Extension in date of applicability of 'Audit Trail' feature in accounting software

MCA notification dated 24 March 2021 required every company using accounting software for maintaining books of accounts to use only such accounting software which has the following features:
  • Recording the audit trail of every transaction; and
  • Creating an edit log that captures each change with the date on which these changes were done; and
  • Ensuring that the audit trail cannot be disabled.
The above requirement for accounting software to have an audit trail feature came into effect on 1 April 2021. However, this date was extended to 1 April 2022. On 31 March 2022, MCA notification has further extended the date for having the audit trail feature up to 1 April 2023.
Our Comments

The extension announced for the filing of Form CSR-2 releases the compliance pressure that companies undergo in the process of financial reporting, closure, and finalization. There is no room for mismanagement of CSR activities with detective and corrective protocols present in Section 135 of the Act and the Rules made thereunder. The extension in filing Form CSR-2 will not harm the interests of stakeholders.
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