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Pankaj Tyagi
| Updated: 22 Jan, 2022 | Category: NGO

NGO files plea opposing provisions of FCRA certification cancellation in Andhra Pradesh HC

FCRA certification

A writ petition has been filed before the High court in Andhra Pradesh opposing the constitutional validity of specific provisions cited under FCR, Act related to canceling the FCRA certification. The hearing shall come to effect next month. In the meantime, the HC has sought the complete paper book of the subject matter pending before the Apex court to avert overlapping proceedings.

What’s in the petition?

  • The petition states that the Section 14(1) (d), 14(3), & 15 under Foreign Contribution Regulation Act, 2010 & rule 15 under Foreign Contribution Regulation rules, 2015 are breaching the constitutional rights of petitioner available under Articles 14, 19, & 21 of the constitution.
  • The plea also opposes the notification released by the MHA on 18/Oct/2019, which revoked the petitioner’s FCRA certification u/s 14 for non-filing of returns for FY 2017-18 without an apt hearing.
  • According to the petition, the petitioner was penalized by authority for non-filing of returns for FY 2017-18. It was unintentional conduct, and despite complying with relevant penal provisions, the authority canceled his re-registration application as per the MHA’s scheme. Cancellation of application further led to the closure of bank account, which was utilized to receive the overseas contribution.

Underlying Facts about the petitioner and FCRA norms

  • The petitioner is a registered charitable society, operational in AP for more than two decades. It claims to be dependent on overseas contributions to executing its undertaking, including staff hiring, aiding communities via charitable work, and rendering relief during an ongoing pandemic.
  • The Foreign Contribution Regulation Act[1] regulates the matter pertaining to foreign contribution in India. Section 11 states that no individual having a definite economic, cultural, religious, educational, or social program shall accept cross-border contribution unless it secures consent from GOI.
  • Section 18 of FCRA read with Rule 17 of FCRA rules states that every individual with a registration certificate must disclose the entire particulars of foreign contribution via annual return filing. While doing so, he/she must enclose details such as funding source, purpose, amount, and ways in which such fund is being utilized. The section mandates the filing of annual returns within nine months of the closure of FY.
  • The FCRA certification had been under the possession of the petitioner since 2003. But after the release of the notification dated 18/Oct/2019, the said license failed to sustain its validity due to the non-filing of annual return for the financial year 2017-18.

Provisions for cancellation of FCRA certification

Section 14(1) of FCRA provides that the certificate shall be subjected to cancellation imposed by the Government for various grounds.

  • One of the grounds cited under clause (d) is license holder has breached any of the underlying provisions of this Act or rules or orders released thereunder.
  • Section 14(3) states that “any individual whose registration has been subjected to cancellation under this section shall stand ineligible for registration or grant of prior consent for three years from the cancellation date of such certificate.
  • Section 15 of the said Act provides the provisions for the management of foreign contributions of the person whose registration has been canceled. Such a person may vest in such authority as sets out by the central Government. The provisions also confer the prescribed authority the power to administer undertakings of a person whose certificate has been canceled.

Conclusion

The said petition came out a serious concern for NGOs across India. It shows that the prevailing norms under FCRA are becoming stiffer every passing year, consequently hampering the operational ability of NGOs. NGOs are the helping hand of the Government and have made remarkable contributions in battling the Covid-19 pandemic. Therefore, such restriction on FCRA certification will undermine their ability to operate seamlessly and provide relief to needy ones.

Read our Article:Online Renewal of FCRA Registration: A Step by Step Process

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Pankaj Tyagi

Pankaj has a diverse experience of writing research papers, blog, and articles during his college time. Earlier, he was working as a tax consultant in a financial firm, but his interest in writing drives him to pursue a career in the writing field.

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