Saving innocent undertrials: How Airtel's Nyaya Bharti programme falls short of the CSR benchmark

Telecom major Airtel and its promoter Sunil Mittal have decided to contribute Rs 5 crore a piece to Nyaya Bharti for bailing out innocent undertrials. It is true that 68 percent of the Indian prison population comprises undertrials, with convicts accounting for the remaining 32 percent, and therefore someone should take up their cause. Both the proposed contributions, corporate and individual, bristle with doubts though.[caption id=“attachment_1249315” align=“alignleft” width=“380”]  Bharti Enterprises chairman Sunil Mittal. Reuters[/caption] Airtel touts this gesture, laudable as it is, as a CSR discharge. A cursory look at the list of activities mentioned in Schedule 7 of the Companies Act, 2013 passing muster as CSR discharge shows that coming to the rescue of innocent undertrials does not make the grade even by a long stretch of imagination. To be sure, the Ministry of Corporate Affairs had in 2014 urged one to give a liberal interpretation to the list of activities making the grade. Obviously, it cannot make the grade under elimination of poverty and hunger because the black humor doing the rounds for ages is the poor often court arrest so as to ensure food, clothing and shelter for themselves though in the process dependents’ interests are forsaken. In the event, Airtel would be giving Rs 5 crore as donation that alas would beget it neither tax deduction nor pro tanto relief from CSR obligation mandated by the company law. But then the gesture would definitely project Airtel as a good corporate citizen though cynics may cavil at it as energy and amount spent for the wrong cause given the fact the society by and large looks down upon prisoners even if they are only undertrials. Be that as it may. Coming to Sunil Mittal’s gesture, his averment that his donation would be from out of the ample salary he gets from Airtel has kindled a doubt. Salary after all mixes seamlessly with one’s total income and thus is fungible. Mittal enjoys considerable other incomes including dividend. How then would he sustain his claim that his donation was from out of his salary? While he hasn’t explicitly stated that he has been motivated to tag the donation with salary for tax reasons, the truth is salary is taxable irrespective of its end use except when salary is surrendered to the Central government under Voluntary Surrender of Salaries Act, 1961. Mittal by no means is surrendering his salary but applying a part of it for bailing out innocent undertrials. He therefore won’t get any relief from income tax on this score. Will he get deduction under section 80G? Well not all altruistic donations automatically make the grade for deduction under section 80G because the institutions accepting donations must be approved by the Commissioner of Income Tax. Nyaya Bharti would have a tough time convincing the commissioner given the fact that its objects do not conform to the tax law’s notions of charity and public good. To be sure, Mittal has not said anything that arouses the suspicion that his gesture is a charity with strings attached or laden with tax relief expectations but the mention of salary has sown some seeds of doubt. He could have simply said he would be donating for the cause of innocent undertrials without mentioning the source from which the donation would be made. In the event both the annual donations, Airtel’s as well as its promoter’s, would have to be made in the spirit of concern for individual freedom. There could of course be a large segment of undertrial prison population who might find the twin gestures upsetting their apple cart or shall we say stopping their gravy train and hence spurn the generous offer of help. This segment’s implicit refrain is we are better off inside the prison rather than outside it! Their only lingering regret often in common with other prisoners is absence of the system of conjugal visits permitted in Brazil and a few states in the USA for example. Conjugal visits fosters family spirit including sex with the legally wedded spouse.