High Court Allows Late Annual Return Filing under Section 17 of FCRA

Case details: Shree Swaminarayan Mandir v. Union of India - [2023] 150 taxmann.com 211 (HC - Delhi)

Judiciary and Counsel Details

• • Prathiba M. Singh, J. 
  • Ruchesh Sinha, Adv. for the Appellant. 
  • Ajay Digpaul, Kamal Digpaul and Ms. Swati Kwatra, Advs. for the Appellant.

Facts of the Case

In the present case, the petitioner (i.e. Charitable Trust) filed petitions seeking directions to the respondent, Ministry of Home Affairs, to allow them to fill and upload Form FC-4 on the respondent’s portal. This would enable them to file annual returns for the financial year 2019-20.

Previously, the FCRA, 2010 was amended by the Foreign Contribution Regulation (Amendment) Act, 2020, which brought substantial changes. Pursuant to the said amendment of FCRA, a notification was issued by the respondent.

The notification specified that the State Bank of India (SBI), Sansad Marg, would be the designated branch for opening the FCRA account, as per the amended section 17 of FCRA. It was also stated that details of the FCRA account and the receipt of foreign contribution ‘as on 31st March of the year ending’ had to be provided in Form FC-4 (Annual Returns).

Since the annual returns for the year 2019-20 were to be uploaded in Form FC-4, the details of the SBI account as of 31st March, 2020 were required. However, the required details of the SBI bank account could not be provided.

Later, the Petitioners argued that the amendment to FCRA itself came into effect in September, 2020 and a six-month extension was granted for opening bank accounts in SBI. As a result, the SBI account opened later could not be filled by them `as of 31st March 2020′, which was a requirement according to the Portal.

The High Court referred to the directions issued in the case of WNS Cares Foundation v. Union of India [2023] 146 taxmann.com 386 (Delhi). As per these directions, a petitioner company registered under the Foreign Contribution (Regulations) Act, 2010, should be allowed to file its annual returns even if they are belated, provided that no foreign funds were received by the petitioner until the opening of its FCRA account.

Consequently, the petitioner company had already opened its bank accounts with SBI Sansad Marg Branch. Therefore, they were permitted to upload their annual returns for the year 2019-20, specifying the SBI account number of the account that was subsequently opened by them.

High Court Held

The High Court held that if the annual returns are uploaded within one month from today, no penalty shall be charged against the petitioners. Accordingly, the petitions are disposed of.