2023 (1) TMI 944 - HC - FEMA

Non-profit granted relief on FCRA account details filing due to retrospective amendments

WNS Cares Foundation & Anr. Versus Union Of India

The court allowed the petitioners, a non-profit company under FCRA, to file annual returns without FCRA account details for specific years due to ... Levy of penalty - Petitioners having opened the FCRA account belatedly - Form FC-4 required a FCRA account as on 31st March of the end of financial year - scope of Foreign Contribution Regulation (Amendment) Act, 2020 - HELD THAT:- A perusal of the said form at serial no.7 requires FCRA account says that receipt of foreign contribution “as on 31st March of the year ending” has to be provided and the bank account has to be in the SBI, Sansad Marg branch. Since the Petitioner No.1 opened its account in August, 2021 and in any case, as on 31st March, 2020, the Foreign Contribution Regulation (Amendment) Act, 2020, had not come into effect, there appears to be some justification in the Petitioners’ case. Petitioner No.1 having opened its FCRA account in August, 2021 is, accordingly, permitted to fill up the said details of its FCRA account in serial no.7 of the Form FC – 4 and submit the same. No coercive steps shall be taken against the Petitioners for having opened the FCRA account belatedly, inasmuch as it is the case of the Petitioners is that no foreign contribution has been received by them in the FY 2019-2020 and FY 2020-21. No penalty shall be imposed upon the Petitioners if the returns for FY 2019-2020 and FY 2020-21 are filed within a period of one month. No further orders are called for by filling in the details of the bank account opened in August 2021, in SBI, Sansad Marg branch. Issues:1. Amendment of Form FC-4 for filing annual returns without FCRA account details.2. Requirement of FCRA account as per amended FCRA provisions.3. Inability to submit Form FC-4 online due to retrospective amendment.4. Delay in opening FCRA account and filling Form FC-4 details.5. Coercive steps and penalties for delayed filing of annual returns.Analysis:1. The petitioners sought directions to amend Form FC-4 to file annual returns without FCRA account details for FY 2019-2020 and FY 2020-2021. The petitioners, a non-profit company registered under FCRA, faced challenges due to amendments requiring a designated FCRA account at SBI, New Delhi Main Branch.2. The FCRA was amended in 2020, mandating foreign contributions to be received in a designated FCRA account at SBI, New Delhi. The petitioners, having complied with FCRA rules previously, faced difficulties in retrospectively providing FCRA account details as per the amended provisions.3. The petitioners highlighted the issue of inability to submit Form FC-4 online for years prior to the amendment's effective date. They argued that the online portal design made it impossible to file returns for FY 2019-2020 and FY 2020-2021 without the designated FCRA account details.4. Despite opening the FCRA account in August 2021, the petitioners hesitated to fill Form FC-4 details due to the requirement stating 'as on 31st March.' The court acknowledged the timing of the FCRA amendment and permitted the petitioners to fill the FCRA account details in the form.5. The court directed that no coercive steps or penalties be imposed on the petitioners for the delayed opening of the FCRA account, considering no foreign contributions were received in the relevant years. The petitioners were given one month to file the returns without facing penalties, and the case was disposed of along with pending applications.