In Form CSR-2, we have to mention SRN of FY 2020-21 and Net worth, turnover & Profit before tax of FY 2019-20 which will automatically shows the criteria of applicability on the basis of figures of immediately preceding FY.

In such case, what will happen to Rule 3(2) which clearly says that “Every company which ceases to be a company covered under subsection (1) of section 135 of the Act for three consecutive financial years shall not be required to —(a) constitute a CSR Committee; and(b) comply with the provisions contained in 1[sub-section (2) to (6)] of the said section, till such time it meets the criteria specified in sub-section (1) of section 135.
For Instance Profit Before Tax for FY 2019-20 is less than 5 crore and all previous years are above 5 crore. Here subsection (1) of section 135 of the Act will still be applicable as per Rule 3(2) because the Profits are not below 5 crore for three consecutive financial years. That means we still have to follow provisions of sec 135 (1) and spend the amount.

But in Form CSR-2 when we mention Net worth, turnover & Profit before tax of FY 2019-20, there will not be any criteria for applicability. The form take details only for unspent of previous year and do not allows option to fill the details of previous three years. Which also means that company is not falling under 135(1) related to applicability and spending. However as per Rule 3(2) the company is still covered under 135(1) because the Profits are not below 5 crore for three consecutive financial years.

Please suggest that for the purpose of Form CSR-2, whether applicability/non-applicability is to be checked only on the basis on 135(1) i.e. only on the basis of immediately preceding financial year figures and we have to ignore rule 3(2). What will happen to Rule 3(2) thereafter?