Can’t act against NGO for not submitting returns, Centre told

Source: The Hindu

What is the News?

The Delhi High Court has restrained the Centre from taking any coercive steps against an NGO for not submitting the FCRA form. Because NGO could not submit its annual return due to a discrepancy in the new form prescribed for declaring foreign contributions.

Background:

• Section 18 of the Foreign Contribution Regulation Act(FCRA), 2010 requires NGOs to file received foreign contributions before the Central government.
• The process for filing such intimation is set out in Rule 17 of the Foreign Contributions Regulations Rules,2011.
• However, Rule 17 was amended in 2020 which replaced earlier Form FC-6 with FC-4 form.
• The FC-4 form also requires the beneficiary to submit a copy of the statement of account of the bank in which it maintains the exclusive Foreign Contribution Account.
• In 2020, the Centre made it mandatory for all NGOs to receive foreign contributions only at the New Delhi Branch of the SBI. Prior to this, there was no requirement of the FCR account being in SBI.

What was the issue with these rules?

• A petition has been filed in the Delhi High Court by an NGO which receives foreign contributions in accordance with the rules set out in the Foreign Contribution Regulation Act, 2010(FCRA).
• The NGO said that the requirement of the FCR account being in the SBI, New Delhi was introduced only in September 2020. And the specific branch of the bank was notified only on October 7,2020.
• Whereas, the NGO’s accounts where foreign contributions were received were not in the SBI. As a result, it became impossible for it to submit the return under the FC-4 form for 2019-2020.

What did the Delhi High Court say?

• The Delhi High Court has restrained the Central Government from taking any coercive action against the NGO for failure to file the requisite return under the FC-4 form until the next hearing.