How to Reply to ROC Notice for CSR Non-Compliance under Section 135 of the Companies Act, 2013

How to Reply to ROC Notice for CSR Non-Compliance under Section 135 of the Companies Act, 2013.  Corporate Social Responsibility (“CSR”) compliance has become an important area of scrutiny by the Ministry of Corporate Affairs (“MCA”) and the Registrar of Companies (“ROC”). Companies covered by Section 135 of the Companies Act, 2013 are required not only to calculate and spend the prescribed CSR amount but also to properly disclose CSR information, deal with unspent amounts, maintain supporting records and file prescribed returns.
Where discrepancies are noticed in MCA filings, the ROC may issue a notice seeking information and explanations under Section 206(1) of the Companies Act, 2013. Section 206(1) empowers the Registrar, after scrutiny of documents filed by a company or based on information received, to require the company to furnish explanations or produce further documents and the company and its officers in default are required to furnish the information within the period specified in the notice. 
A Section 206(1) notice should therefore not be treated as a routine email but at the same time, receipt of such a notice does not automatically establish that the company has committed every default alleged by the ROC, hence the first task is to reconcile the notice with the company's actual statutory records.
Why Is ROC Issuing CSR Notices?
Section 135 applies to every company meeting any of the prescribed financial thresholds in the immediately preceding financial year: net worth of Rs.500 crore or more, turnover of Rs.1,000 crore or more, or net profit of Rs.5 crore or more. MCA's CSR FAQs confirm these applicability thresholds. 
Once Section 135 applies, the company may have obligations relating to the CSR Policy, CSR expenditure, treatment of unspent amounts, Board oversight, annual CSR reporting and Form CSR-2.
MCA introduced Form CSR-2 in 2022. Rule 12(1B) of the Companies (Accounts) Rules requires companies covered by Section 135(1) to furnish a report on CSR in Form CSR-2. The requirement was introduced beginning with FY 2020-21. 
As a result, MCA now has structured CSR information which can be compared against AOC-4, financial statements and other corporate filings. Differences between these records can result in ROC scrutiny.
A recent Section 206(1) CSR notice reviewed by us raised issues relating to CSR spending shortfall, transfer of unspent amounts, non-filing of CSR-2, CSR Committee constitution, CSR Policy disclosure in the Board's Report and absence of the CSR Policy website link, which makes it important to examine each ROC query separately instead of giving one general response.
First Step: Do Not Admit the ROC Observation Without Verification
One of the most common mistakes in replying to an ROC notice is assuming that every observation mentioned in the notice represents an established default.
The ROC may have generated its observation based on structured MCA-21 data, the contents of AOC-4, CSR-2, financial statements or an apparent inconsistency between different filings.
For example, a company may have spent only part of its CSR obligation during the financial year but may have subsequently transferred the remaining amount to an eligible Schedule VII Fund within the statutory time. An MCA data comparison may nevertheless flag the difference as a “CSR shortfall.”
Similarly, an ROC notice may refer to failure to transfer money to an Unspent CSR Account by 30 April, whereas the company's unspent amount may not relate to an ongoing project at all.
Accordingly, every observation must first be classified as a genuine default, a documentary gap, a disclosure inconsistency, or a query that is factually or legally not applicable.
Common ROC CSR Queries and How They Should Be Examined

ROC Observation

What the Company Should Verify Before Replying

Shortfall in CSR expenditure

Recalculate the CSR obligation under Section 135(5), amount actually spent, excess set-off, if any, and treatment of the balance unspent amount.

Amount transferred after 30 April

Determine whether the amount related to an ongoing project. The 30-day transfer requirement to the Unspent CSR Account applies to ongoing projects.

CSR-2 not filed

Verify MCA acknowledgement/SRN. Do not state that CSR-2 was filed unless an actual SRN is available.

Amount transferred after 30 September

For a non-ongoing unspent amount, verify the actual bank debit/transfer date to the eligible Schedule VII Fund, not merely the date written on a cheque.

CSR Committee not constituted

Check applicability of Section 135(9), Board/Committee resolutions and disclosures made in the CSR Annual Report.

CSR Policy not disclosed in Board's Report

Compare the main Board's Report with its CSR Annexure. An Annexure alone may not cure a contradictory statement appearing in the main report.

CSR website link not provided

Verify whether the company maintained a website. The statutory requirement is relevant to the company's website “if any.”

Treatment of Unspent CSR Amount Is Critical
The response to the ROC must clearly distinguish between an ongoing project and a non-ongoing CSR obligation.
For an ongoing project, Section 135(6) requires the unspent amount to be transferred within 30 days from the end of the financial year to a special bank account known as the Unspent Corporate Social Responsibility Account. The company then has three financial years to utilise the amount for the ongoing project, failing which the amount must be transferred to a Schedule VII Fund within the prescribed period. 
For an unspent amount not relating to an ongoing project, Section 135(5) requires the company to transfer the amount to a Fund specified in Schedule VII within six months from the expiry of the financial year. 
Therefore, a notice asking why an amount was not transferred by 30 April should not automatically be admitted if there was no ongoing project. The reply should expressly state whether the CSR activity was ongoing or non-ongoing and support that statement through Board approvals, CSR Annual Report and project documentation.
Do Not Rely Only on the Cheque Date
Where the company claims that an unspent CSR amount was transferred to a Schedule VII Fund before the statutory deadline, supporting evidence becomes crucial.
Merely producing a cheque bearing a date before the deadline may not conclusively establish timely compliance. The company should ideally produce the relevant bank statement, debit entry, beneficiary acknowledgement, payment receipt and, where applicable, bank confirmation showing when the payment was actually effected.
This is especially important where the ROC specifically alleges that the company transferred the amount after 30 September.
How to Deal With CSR-2 Non-Filing
Form CSR-2 was introduced through the Companies (Accounts) Amendment Rules, 2022. For FY 2020-21 onwards, companies covered by Section 135 became subject to CSR reporting through this prescribed form. 
The procedural requirements and separate filing dates have changed through year-specific amendments; therefore, the applicable rule for the relevant financial year should always be checked before preparing the response. MCA has issued separate amendments prescribing CSR-2 filing arrangements for subsequent financial years as well. 
If CSR-2 was genuinely not filed, the company should ordinarily avoid taking an artificial defence merely because CSR details were contained in the Board's Report.
Instead, the reply should distinguish between substantive CSR compliance and the procedural filing lapse. It may state that CSR activities and disclosures were otherwise undertaken and explain the circumstances leading to the filing omission, while seeking appropriate consideration from the ROC.
CSR Committee: Check the Rs.50 Lakh Exemption
Another frequent issue is an allegation that the company did not constitute a CSR Committee.
Section 135(9) provides an important exception. Where the CSR amount required to be spent under Section 135(5) does not exceed Rs.50 lakh, the requirement to constitute a CSR Committee does not apply and the functions of the Committee may instead be discharged by the Board of Directors. 
Therefore, the reply should not merely state whether a committee existed. It should first determine whether a CSR Committee was statutorily required at all.
If a company nevertheless constituted a CSR Committee voluntarily, the relevant Board resolution, Committee composition and meeting records should be annexed to the response.
CSR Disclosure in the Board's Report
Section 134(3)(o) requires the Board's Report to contain details about the CSR Policy developed and implemented by the company and the CSR initiatives undertaken during the year. MCA has also confirmed that Section 134(3)(o) mandates CSR Policy disclosure in the Board's Report. 
This area requires particular attention where the main Board's Report and CSR Annexure contain inconsistent information.
For example, a CSR Annexure may correctly disclose CSR applicability, CSR Policy, CSR expenditure and unspent CSR amount, while the main Board's Report may inadvertently state that “CSR provisions are not applicable.”
In such a case, the company should not simply deny the ROC observation. A better response is to explain that the main report contained an inadvertent clerical or drafting inconsistency, while the statutory CSR Annexure forming part of the Board's Report contained the detailed and correct CSR disclosures.
Such an explanation should be supported by the complete filed Annual Report rather than isolated pages.
CSR Policy Website Disclosure
Section 135 requires the contents of the CSR Policy to be placed on the company's website if the company has a website. Therefore, where the company genuinely did not maintain any website during the relevant financial year, the reply should clearly state that fact. The company should not create a retrospective website merely to make it appear that the disclosure existed during the relevant year. The reply should deal with the historical facts as they actually existed.
Documents to Review Before Drafting the ROC Reply
Before finalising the response, the company should conduct a complete reconciliation of its AOC-4 and attachments, audited financial statements, Board's Report, Annual Report on CSR Activities, CSR-2 and SRN, CSR Policy, Board/CSR Committee resolutions, bank statements, Unspent CSR Account records, Schedule VII Fund receipts, implementing-agency documents, CSR project approvals and utilisation evidence. This exercise frequently identifies the real source of the ROC observation.
For example, the accounts may record CSR expenditure of Rs.2 lakh, the CSR Annexure may show an additional Rs.6 lakh transferred after year-end, but CSR-2 may never have been filed. The issue is then not necessarily a straightforward Rs.6 lakh CSR spending default; it may involve a combination of subsequent statutory transfer, reporting inconsistency and non-filing of CSR-2.
How Should the Reply to ROC Be Structured?
A good Section 206(1) response should begin by referring to the ROC's letter number, date, company CIN and relevant financial year. It should confirm that the Board/company has examined the observations and is submitting a query-wise response with supporting documents.
Each ROC observation should then be reproduced separately followed by the company's factual response, statutory justification and documentary evidence.
Where the allegation is incorrect, state clearly why it is not applicable. Where the company's filing contains an inconsistency, explain it rather than denying something that is visible on MCA records. Where an actual procedural lapse occurred, the response should present the facts accurately, explain the circumstances and demonstrate the extent of substantive compliance. Most importantly, do not combine seven different CSR observations into one general paragraph.
Deadline for Replying to Section 206(1) Notice
Section 206 permits the Registrar to require information or documents within the reasonable time stated in the notice. 
Accordingly, the company should follow the specific deadline appearing in its notice.
For example, the ROC notice reviewed for this article required both hard-copy and soft-copy responses within 30 days from receipt, duly certified by a Director, KMP or authorised signatory.
Thirty days should, however, not be assumed to be the deadline for every Section 206 notice.
Failure to furnish the information or documents required under Section 206 can itself expose the company and officers in default to consequences under Section 206(7). A 2026 court decision also reproduces the statutory consequence of failure to respond to a Section 206 notice. 
Penalty for CSR Non-Compliance
Section 135(7) specifically addresses failure to comply with the requirements relating to transfer of unspent amounts under Sections 135(5) and 135(6).
The company may be liable to a penalty of twice the amount required to be transferred or Rs.1 crore, whichever is lower, while every officer in default may be liable to one-tenth of the amount required to be transferred or Rs.2 lakh, whichever is lower. 
MCA's CSR FAQs clarify an equally important point: Section 135(7) is specifically concerned with defaults under Sections 135(5) and 135(6). Other CSR-related non-compliances may attract Section 134(8) or the general penalty provisions under Section 450, depending upon the nature of the default.
This is why the legal characterisation of each ROC observation is extremely important.
Common Mistakes While Replying to an ROC CSR Notice
The biggest risks generally arise from admitting every observation without verification, relying only on the date of a cheque instead of actual transfer proof, treating an ongoing and non-ongoing CSR amount identically, ignoring contradictory Board's Report disclosures, claiming that CSR-2 was filed without an SRN, or submitting unsupported CSR expenditure merely because a payment receipt is available.
A CSR payment must itself satisfy the statutory framework. The eligibility of the activity, identity of the implementing entity where relevant, Board approval, utilisation and Schedule VII linkage should all be reviewed before the amount is relied upon in an ROC response.
CCL observations
Receiving an ROC Notice for CSR Non-Compliance under Section 135 does not necessarily mean that every allegation in the notice is correct. Such notices frequently require a detailed reconciliation of MCA filings with the company's underlying books, Board records, CSR Annual Report, CSR-2, bank transactions and supporting documents.
The most effective approach is to classify each ROC observation separately as a substantive default, procedural filing lapse, disclosure inconsistency, documentary deficiency or non-applicable observation.
A carefully prepared, evidence-based and query-wise reply can make a significant difference, particularly where the ROC's observation has arisen from incomplete or inconsistent MCA-21 reporting rather than an actual failure to discharge the company's CSR obligation.

Corporate Social Responsibility (“CSR”) compliance has become an important area of scrutiny by the Ministry of Corporate Affairs (“MCA”) and the Registrar of Companies (“ROC”). Companies covered by Section 135 of the Companies Act, 2013 are required not only to calculate and spend the prescribed CSR amount but also to properly disclose CSR information, deal with unspent amounts, maintain supporting records and file prescribed returns.

Where discrepancies are noticed in MCA filings, the ROC may issue a notice seeking information and explanations under Section 206(1) of the Companies Act, 2013. Section 206(1) empowers the Registrar, after scrutiny of documents filed by a company or based on information received, to require the company to furnish explanations or produce further documents and the company and its officers in default are required to furnish the information within the period specified in the notice.

A Section 206(1) notice should therefore not be treated as a routine email but at the same time, receipt of such a notice does not automatically establish that the company has committed every default alleged by the ROC, hence the first task is to reconcile the notice with the company's actual statutory records.

Why Is ROC Issuing CSR Notices?

Section 135 applies to every company meeting any of the prescribed financial thresholds in the immediately preceding financial year: net worth of Rs.500 crore or more, turnover of Rs.1,000 crore or more, or net profit of Rs.5 crore or more. MCA's CSR FAQs confirm these applicability thresholds.

Once Section 135 applies, the company may have obligations relating to the CSR Policy, CSR expenditure, treatment of unspent amounts, Board oversight, annual CSR reporting and Form CSR-2.

MCA introduced Form CSR-2 in 2022. Rule 12(1B) of the Companies (Accounts) Rules requires companies covered by Section 135(1) to furnish a report on CSR in Form CSR-2. The requirement was introduced beginning with FY 2020-21.

As a result, MCA now has structured CSR information which can be compared against AOC-4, financial statements and other corporate filings. Differences between these records can result in ROC scrutiny.

A recent Section 206(1) CSR notice reviewed by us raised issues relating to CSR spending shortfall, transfer of unspent amounts, non-filing of CSR-2, CSR Committee constitution, CSR Policy disclosure in the Board's Report and absence of the CSR Policy website link, which makes it important to examine each ROC query separately instead of giving one general response.

First Step: Do Not Admit the ROC Observation Without Verification

One of the most common mistakes in replying to an ROC notice is assuming that every observation mentioned in the notice represents an established default.

The ROC may have generated its observation based on structured MCA-21 data, the contents of AOC-4, CSR-2, financial statements or an apparent inconsistency between different filings.

For example, a company may have spent only part of its CSR obligation during the financial year but may have subsequently transferred the remaining amount to an eligible Schedule VII Fund within the statutory time. An MCA data comparison may nevertheless flag the difference as a “CSR shortfall.”

Similarly, an ROC notice may refer to failure to transfer money to an Unspent CSR Account by 30 April, whereas the company's unspent amount may not relate to an ongoing project at all.

Accordingly, every observation must first be classified as a genuine default, a documentary gap, a disclosure inconsistency, or a query that is factually or legally not applicable.

Common ROC CSR Queries and How They Should Be Examined

ROC Observation	What the Company Should Verify Before Replying
Shortfall in CSR expenditure	Recalculate the CSR obligation under Section 135(5), amount actually spent, excess set-off, if any, and treatment of the balance unspent amount.
Amount transferred after 30 April	Determine whether the amount related to an ongoing project. The 30-day transfer requirement to the Unspent CSR Account applies to ongoing projects.
CSR-2 not filed	Verify MCA acknowledgement/SRN. Do not state that CSR-2 was filed unless an actual SRN is available.
Amount transferred after 30 September	For a non-ongoing unspent amount, verify the actual bank debit/transfer date to the eligible Schedule VII Fund, not merely the date written on a cheque.
CSR Committee not constituted	Check applicability of Section 135(9), Board/Committee resolutions and disclosures made in the CSR Annual Report.
CSR Policy not disclosed in Board's Report	Compare the main Board's Report with its CSR Annexure. An Annexure alone may not cure a contradictory statement appearing in the main report.
CSR website link not provided	Verify whether the company maintained a website. The statutory requirement is relevant to the company's website “if any.”

Treatment of Unspent CSR Amount Is Critical

The response to the ROC must clearly distinguish between an ongoing project and a non-ongoing CSR obligation.

For an ongoing project, Section 135(6) requires the unspent amount to be transferred within 30 days from the end of the financial year to a special bank account known as the Unspent Corporate Social Responsibility Account. The company then has three financial years to utilise the amount for the ongoing project, failing which the amount must be transferred to a Schedule VII Fund within the prescribed period.

For an unspent amount not relating to an ongoing project, Section 135(5) requires the company to transfer the amount to a Fund specified in Schedule VII within six months from the expiry of the financial year.

Therefore, a notice asking why an amount was not transferred by 30 April should not automatically be admitted if there was no ongoing project. The reply should expressly state whether the CSR activity was ongoing or non-ongoing and support that statement through Board approvals, CSR Annual Report and project documentation.

Do Not Rely Only on the Cheque Date

Where the company claims that an unspent CSR amount was transferred to a Schedule VII Fund before the statutory deadline, supporting evidence becomes crucial.

Merely producing a cheque bearing a date before the deadline may not conclusively establish timely compliance. The company should ideally produce the relevant bank statement, debit entry, beneficiary acknowledgement, payment receipt and, where applicable, bank confirmation showing when the payment was actually effected.

This is especially important where the ROC specifically alleges that the company transferred the amount after 30 September.

How to Deal With CSR-2 Non-Filing

Form CSR-2 was introduced through the Companies (Accounts) Amendment Rules, 2022. For FY 2020-21 onwards, companies covered by Section 135 became subject to CSR reporting through this prescribed form.

The procedural requirements and separate filing dates have changed through year-specific amendments; therefore, the applicable rule for the relevant financial year should always be checked before preparing the response. MCA has issued separate amendments prescribing CSR-2 filing arrangements for subsequent financial years as well.

If CSR-2 was genuinely not filed, the company should ordinarily avoid taking an artificial defence merely because CSR details were contained in the Board's Report.

Instead, the reply should distinguish between substantive CSR compliance and the procedural filing lapse. It may state that CSR activities and disclosures were otherwise undertaken and explain the circumstances leading to the filing omission, while seeking appropriate consideration from the ROC.

CSR Committee: Check the Rs.50 Lakh Exemption

Another frequent issue is an allegation that the company did not constitute a CSR Committee.

Section 135(9) provides an important exception. Where the CSR amount required to be spent under Section 135(5) does not exceed Rs.50 lakh, the requirement to constitute a CSR Committee does not apply and the functions of the Committee may instead be discharged by the Board of Directors.

Therefore, the reply should not merely state whether a committee existed. It should first determine whether a CSR Committee was statutorily required at all.

If a company nevertheless constituted a CSR Committee voluntarily, the relevant Board resolution, Committee composition and meeting records should be annexed to the response.

CSR Disclosure in the Board's Report

Section 134(3)(o) requires the Board's Report to contain details about the CSR Policy developed and implemented by the company and the CSR initiatives undertaken during the year. MCA has also confirmed that Section 134(3)(o) mandates CSR Policy disclosure in the Board's Report.

This area requires particular attention where the main Board's Report and CSR Annexure contain inconsistent information.

For example, a CSR Annexure may correctly disclose CSR applicability, CSR Policy, CSR expenditure and unspent CSR amount, while the main Board's Report may inadvertently state that “CSR provisions are not applicable.”

In such a case, the company should not simply deny the ROC observation. A better response is to explain that the main report contained an inadvertent clerical or drafting inconsistency, while the statutory CSR Annexure forming part of the Board's Report contained the detailed and correct CSR disclosures.

Such an explanation should be supported by the complete filed Annual Report rather than isolated pages.

CSR Policy Website Disclosure

Section 135 requires the contents of the CSR Policy to be placed on the company's website if the company has a website. Therefore, where the company genuinely did not maintain any website during the relevant financial year, the reply should clearly state that fact. The company should not create a retrospective website merely to make it appear that the disclosure existed during the relevant year. The reply should deal with the historical facts as they actually existed.

Documents to Review Before Drafting the ROC Reply

Before finalising the response, the company should conduct a complete reconciliation of its AOC-4 and attachments, audited financial statements, Board's Report, Annual Report on CSR Activities, CSR-2 and SRN, CSR Policy, Board/CSR Committee resolutions, bank statements, Unspent CSR Account records, Schedule VII Fund receipts, implementing-agency documents, CSR project approvals and utilisation evidence. This exercise frequently identifies the real source of the ROC observation.

For example, the accounts may record CSR expenditure of Rs.2 lakh, the CSR Annexure may show an additional Rs.6 lakh transferred after year-end, but CSR-2 may never have been filed. The issue is then not necessarily a straightforward Rs.6 lakh CSR spending default; it may involve a combination of subsequent statutory transfer, reporting inconsistency and non-filing of CSR-2.

How Should the Reply to ROC Be Structured?

A good Section 206(1) response should begin by referring to the ROC's letter number, date, company CIN and relevant financial year. It should confirm that the Board/company has examined the observations and is submitting a query-wise response with supporting documents.

Each ROC observation should then be reproduced separately followed by the company's factual response, statutory justification and documentary evidence.

Where the allegation is incorrect, state clearly why it is not applicable. Where the company's filing contains an inconsistency, explain it rather than denying something that is visible on MCA records. Where an actual procedural lapse occurred, the response should present the facts accurately, explain the circumstances and demonstrate the extent of substantive compliance. Most importantly, do not combine seven different CSR observations into one general paragraph.

Deadline for Replying to Section 206(1) Notice

Section 206 permits the Registrar to require information or documents within the reasonable time stated in the notice.

Accordingly, the company should follow the specific deadline appearing in its notice.

For example, the ROC notice reviewed for this article required both hard-copy and soft-copy responses within 30 days from receipt, duly certified by a Director, KMP or authorised signatory.

Thirty days should, however, not be assumed to be the deadline for every Section 206 notice.

Failure to furnish the information or documents required under Section 206 can itself expose the company and officers in default to consequences under Section 206(7). A 2026 court decision also reproduces the statutory consequence of failure to respond to a Section 206 notice.

Penalty for CSR Non-Compliance

Section 135(7) specifically addresses failure to comply with the requirements relating to transfer of unspent amounts under Sections 135(5) and 135(6).

The company may be liable to a penalty of twice the amount required to be transferred or Rs.1 crore, whichever is lower, while every officer in default may be liable to one-tenth of the amount required to be transferred or Rs.2 lakh, whichever is lower.

MCA's CSR FAQs clarify an equally important point: Section 135(7) is specifically concerned with defaults under Sections 135(5) and 135(6). Other CSR-related non-compliances may attract Section 134(8) or the general penalty provisions under Section 450, depending upon the nature of the default.

This is why the legal characterisation of each ROC observation is extremely important.

Common Mistakes While Replying to an ROC CSR Notice

The biggest risks generally arise from admitting every observation without verification, relying only on the date of a cheque instead of actual transfer proof, treating an ongoing and non-ongoing CSR amount identically, ignoring contradictory Board's Report disclosures, claiming that CSR-2 was filed without an SRN, or submitting unsupported CSR expenditure merely because a payment receipt is available.

A CSR payment must itself satisfy the statutory framework. The eligibility of the activity, identity of the implementing entity where relevant, Board approval, utilisation and Schedule VII linkage should all be reviewed before the amount is relied upon in an ROC response.

CCL observations

Receiving an ROC Notice for CSR Non-Compliance under Section 135 does not necessarily mean that every allegation in the notice is correct. Such notices frequently require a detailed reconciliation of MCA filings with the company's underlying books, Board records, CSR Annual Report, CSR-2, bank transactions and supporting documents.

The most effective approach is to classify each ROC observation separately as a substantive default, procedural filing lapse, disclosure inconsistency, documentary deficiency or non-applicable observation.

A carefully prepared, evidence-based and query-wise reply can make a significant difference, particularly where the ROC's observation has arisen from incomplete or inconsistent MCA-21 reporting rather than an actual failure to discharge the company's CSR obligation.