The Confederation of Indian Textile Industry (CITI) undertakes the Cotton Development and extension Activities through its extension arm- CITI Cotton Development & Research Association (CITI CDRA).
CITI is registered under Sec 25 of Companies Act, now under Section 8 of amended Companies Act and as a trust u/s 12AA of Income Tax Act.
CITI CDRA is registered as a Trust dated 24th April 1970 under Bombay Public Trust Act 1950. It is also registered as a trust u/s 12A (a) of the Income Tax Act.
CITI CDRA activities aim at strengthening the cotton value chain by involving stakeholders. These activities are being conducted since its inception i.e. 1970 onwards. CDRA’s activities are essentially meant to improve yield and production of cotton, creating awareness among the cotton growers from the project areas about the latest production, plant protection and Nutrient Management Technologies and equipping the farmers with these technologies for sustaining cotton production and improving the economic status of the farmers who are the weakest link in the cotton value chain.
General Circular No. 21/2014 of MCA dated June 18, 2014 clarifies that Contribution to Corpus of a Trust/Society/Section 8 companies will qualify as CSR expenditure as long as:
(a) the Trust/Society/Section 8 company etc. is created exclusively for undertaking CSR activities or
(b) Where the corpus is created exclusively for a purpose directly relatable to a subject covered in Schedule VII of the act
Circular also clarifies that the entries in the said schedule must be interpreted liberally so as to capture the essence of the subjects enumerated in the said Schedule. The items enlisted in the Schedule are broad -based and are intended to cover a wide range of activities.
Rule 4(2) of Companies (Corporate Social Responsibility Policy) Rules 2014, gives the reference that if such trust, society or company is not established by the company or its holding or subsidiary or associate company, it shall have an established track record of three years in undertaking similar programs or projects.
CITI CDRA is carrying on activities as mentioned in Schedule VII of the Act and accordingly, payments made by companies to the CITI CDRA will be treated as CSR expenditure as per the Companies Act, 2013 (as per opinion sought from the professionals).