No forcible action against NGOs that fail to file annual returns: Delhi HC to MHA

The Delhi High Court has directed the Ministry of Home Affairs (MHA) not to take any "coercive" action against Non-Governmental Organisations (NGOs) if they fail to file their annual returns prior to June 30, 2021.

The court passed the order after deliberating on petitions from NGOs in which they had stated that they were unable to file returns under the FC-4 Form for 2019-20. This was due to the online system, established under the amended Foreign Contribution (Regulation) Act 2020, accepting entries only if the account is in the State Bank of India's (SBI) New Delhi Main Branch, the Economic Times reported. The NGOs wanted the High Court's direction to the MHA to amend the FC-4 Form and also to give an extension for filing annual returns.

"A citizen cannot be penalised for a discrepancy in the form prescribed by the union government, resulting in the form being unable to be submitted even in the case of a law-abiding citizen," observed the Delhi High Court upon passing the order, according to the daily.

The government can cancel FCRA licenses of NGOs for violations such as failure to file annual returns, according to the rules.

During the proceedings, the MHA explained to the court that it cannot extend the deadline for filing returns. The ministry added that organisations should file their returns at a later date with an appropriate penalty attached. On this, the court said, "The submission does not comment itself to acceptance at all. In view thereof, till the next date of hearing, the respondent is restrained from taking any coercive action for failure to file the return before June 30, 2021."

NGOs have maintained that they have greatly contributed to India's GDP and have also provided livelihood to millions either through direct employment or social giving. "Non-profits have played a crucial role in serving the needs of the community during the Covid-19 pandemic," the NGOs said.

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