FCRA for NGOs

An organisation having a definite cultural, economic, educational, religious or social programme shall accept foreign contribution, only after such organisation obtains a certificate of registration from the Central Government.

Any person, if it is not registered with the Central Government, can accept foreign contribution only after obtaining the prior permission of the Central Government and such prior permission shall be valid for the specific purpose for which it is obtained and from the specific source.

If the person referred as above has been found guilty of violation of any of the provisions of the Foreign Contribution (Regulation) Act, 1976, the unutilized or unreceived amount of foreign contribution shall not be utilized or received, as the case may be, without the prior approval of the Central Government.

i.	the person or class of persons who shall obtain its prior permission before accepting the foreign contribution; or
ii.	the area or areas in which the foreign contribution shall be accepted and utilized with the prior permission of the Central Government; or
iii.	the purpose or purposes for which the foreign contribution shall be utilized with the prior permission of the Central Government; or
iv.	the source or sources from which the foreign contribution shall be accepted with the prior permission of the Central Government

Any association registered with the Central Government or granted prior permission under that section of the Foreign Contribution (Regulation) Act, 1976, as it stood immediately before the commencement of this Act, shall be deemed to have been registered or granted prior permission, as the case may be, under this Act and such registration shall be valid for a period of five years from the date on which this section comes into force.

An application for registration of an organisation for acceptance of foreign contribution shall be made electronically on-line in Form FC-3, and shall be followed by forwarding the hard copy of the on-line application duly signed by the Chief Functionary of the association together with the required documents:

i.	Form FC-3 duly filled in triplicate.
ii.	Audited statement of accounts of past three years.
iii.	Annual Report specifying activities of past three years.
iv.	If the association is a registered Trust or Society a certified copy of the registration certificate.
v.	Copy of the Memorandum of Association and/or the Articles of Association as applicable.
vi.	List of Main objects and definite programmes for which the contribution is to be accepted / utilised.
vii.	Details of names and addresses of the members of the Executive Committee/Governing Council etc. of the Association.
viii.	Copy of any prior permission granted to the organization.
ix.	Copy of resolution of Governing Body of the organisation, authorizing the registration under FCRA.
x.	Copy of Power of Attorney or the resolution of Governing Body by which the Chief Functionary is authorized to submit FC-3.
xi.	List of present members of the Governing Body of the organisation and the office bearers.
xii.	Copy of any Journal or other publication of the organization.
xiii.	If the association is having any parent or sister or subsidiary organisation which is registered under the FCRA then the registration number along with Ministry of Home Affairs file number should be mentioned.
xiv.	If the association has submitted any application earlier then its reference number should be mentioned.
xv.	If the association has received any foreign contribution with or without the prior approval of the Central Government, then the detail should be given.
xvi.	Details of Bank along through which the foreign contribution shall be received.
xvii.	A recommendation certificate from any competent authority.
xviii.	Copy of certificates of exemption or registration issued by the Income Tax Department u/s80G and 12A.

The hard copy of the on-line application shall reach the Central Government within thirty days of the submission of the on-line application, failing which the request of the organisation shall be deemed to have ceased.

Any organisation whose request has ceased may make a fresh on-line application with the Central Government only after six months from the date of cessation of the previous application.

An organisation seeking registration shall be required to open an exclusive bank account to receive the foreign contribution.

The organisation may open one or more accounts in one or more banks for the purpose of utilising the foreign contribution after it has been received and, in all such cases, intimation on plain paper shall be furnished to the Secretary, Ministry of Home Affairs New Delhi, within fifteen days of the opening of any account.

An application made for the grant of the registration shall be accompanied by a fee of 2000/- (Two Thousand only).

The fee shall be remitted by demand draft or banker’s cheque in favour of the “Pay and Accounts Officer, Ministry of Home Affairs”, payable at New Delhi.

No specific time limit has been provided under FCRA for making an application, unlike Income Tax Act, which requires an organisation to apply within one year from its creation or registration under section 12A. Normally FCRA is granted after 3 years of active existence, therefore, the application should be made after three years though nothing in the Act prevents from making such application earlier.

Relevance of three years’ audited statement : In the absence of any time limit provided in FCRA, reliance is normally made on clause 8 of Form FC-3, which provides for submission of past three years audited statement. On the basis of the requirement of form FC-3, it is normally understood that application for registration under FCRA can only be after 3 years of the creation of the organisation. But, in our opinion, under FCRA laws, there is no such restriction, which prohibits application before completion of three years.

The requirement of submission of 3 years audited statements under Form FC-3, is only directory in nature and there is no reason to make an implicit presumption of a 3years waiting period before applying for registration. Incidentally, Form FC- 4, which is the application form for seeking, prior permission also requires submission of last 3 years audited statements. Therefore, if this submission of 3 years statements is assumed to be a mandatory pre-condition, then an organisation cannot even apply for prior permission before completion of three years.

Rule does not specify any time limit - Rule 9(1)(a) of the Foreign Contribution (Regulation) Act 2010, provides that an application for registration of an association under section 11(1), shall be made in Form FC-3. Rule 9(1)(a), does not provides for any period of restriction only after which the application can be made. It is only the Form FC- 4 and Form FC-3, which require as a part of enclosures, 3years audited statements and detail of activities. As far as Form FC- 4 is concerned it is a foregone conclusion that if 3 years audited statements are not available, lesser number of years audited statements could be enclosed. But, somehow a confusion in practice as well as understanding seemed to have crept in that application for registration can only be made after the completion of 3 years.

Supreme court’s view - In this regard, it is pertinent to refer the Supreme Court decision in STO vs. K.I. Abraham [1967] 20 STC 367, where is was held that the rule making authority had no power to prescribe any time restriction. Infact, the FCRA rules also do not provide any restrictive time limit. It is only the requirement of Form FC- 4 as well as Form FC-3, which requires 3 years audited statements and activity reports. Such requirements are directory and general in nature and therefore, should not be construed as a mandatory requirement of the FCRA.

Application can be filed at any time - Consequently, in our opinion, application for registration under FCRA can be filed any time after the registration of the organisation. But, the organisation with a considerable past history of activities have a greater chance of convincing the FCRA authorities with regard to the genuiness and the relevance of their purpose.

The FCRA department may ask the intelligence bureau for a report. Some authorities from the intelligence bureau may visit the office and the project area of the organisation and inspect the books of account and other records available. On the basis of the reports submitted by the intelligence bureau the FCRA department decides whether to accept or reject the application.

The FCRA department issues a registration certificate and provides a permanent registration number. This registration number is required to be quoted in all future correspondences and filling of returns and forms.

After making inquiry, the Central Government may register such organisation and grant him a certificate, ordinarily within ninety days from the date of receipt of application.
In case the Central Government does not grant, within the said period of ninety days, a certificate, it shall communicate the reasons there for to the applicant.

An undertaking has to be given by the Chief Functionary, affirming that the information’s are correct and the organisations would undertake to abide by the following:

i.	Inform within 30days regarding change of name, address, objects, etc. with evidence.
ii.	Not to accept any foreign contribution without prior permission, if more than 50% of the office bearers as were mentioned in the application for registration are changed or replaced.
iii.	Not to change the bank account or branch of the bank without prior permission.
iv.	Not to accept foreign contribution before the registration is granted or with prior permission only.

“ The Association named hereinabove affirms that the information furnished above is correct and undertake.

i.	to inform the Central Government (Ministry of Home Affairs) within thirty days, if any, change takes place in regard to the name of the Association, its address, its registration, its nature, its aims and objects with documentary evidence effecting the change ;
ii.	to obtain prior permission for change of office bearer(s), if at any point of time such change causes replacement of 50% or more of the office bearers as were mentioned in the application for registration under the Foreign Contribution (Regulation) Act, 2010 and undertakes further not to accept any foreign contribution except with prior permission till the permission to replace the office bearer(s) has been granted.
iii.	Not to change the bank or branch of the bank without prior permission of the Central Government. The reasons for change of bank or branch of the bank shall have to be relevant and justifiable ; and
iv.	not to accept any foreign contribution unless it has obtained either the registration number, as applied for hereinabove, or prior permission of the Central Government under sub-section (2)of Sec. 11 of the Foreign Contribution (Regulation) Act, 2010.”

Nature and implication of the undertaking: It is important that the nature and implication of this undertaking is properly understood by the functionaries of the applicant organisation. The following analysis is made in brief:

i.	If there is any change in the name, address, the nature of registration, aims and objectives at any time after the submission of the application, then the FCRA authorities are required to be intimated within a period of 30 days.
ii.	The office bearers of the association are required to continue in the office and any change which causes more than 50% of the office bearers as were mentioned in the application for registration automatically debars the organisation from accepting foreign contribution. So in case where more than 50% of the office bearers are changed then it is required that the FCRA authorities are informed and due approval is taken. During the period between the date of change and the approval from FCRA authorities, the FCRA registration will remain suspended and the association cannot receive any foreign contribution. If it wants to receive foreign contribution it can do with prior permission only. This provision has been introduced to prevent the misuse and sale of FCRA registered associations.
iii.	Under FCRA only one bank account is permissible for the purpose of receiving foreign contribution. Therefore, for the change in bank account, due information should be given to the FCRA authorities and the change should be effected only after receiving the permission for same.

Section 12(4)(a) states the grounds or the reasons on the basis of which an application can be rejected. If the Central Government after making the necessary inquiry is of the opinion that the person making an application for registration is fictitious or benami; has been prosecuted or convicted for indulging in activities aimed at conversion through inducement or force, either directly or indirectly, from one religious faith to another; has been prosecuted or convicted for creating communal tension or disharmony in any specified district or any other part of the country; has been found guilty or diversion or mis-utilisation of its funds; is engaged or likely to engage in propagation of sedition or advocate violent methods to achieve its ends; is likely to use the foreign contribution for personal gains or divert it for undesirable purposes; has contravened any of the provisions of this Act; has been prohibited from accepting foreign contribution.

Where the Central Government refuses the grant of certificate, it shall record in its order the reasons therefor and furnish a copy to the applicant. The Central Government may not communicate the reasons for refusal for grant of certificate to the applicant in cases where is no obligation to give any information or documents or records or papers under the Right to Information Act, 2005.

Every certificate of registration granted to a organisation under the Act shall be valid for a period of five years from the date of its issue.

Every certificate of registration issued to a organisation shall be liable to be renewed after the expiry of five years from the date of its issue on proper application.

Every organisation shall apply to the Central Government in Form FC-5, six months before the date of expiry of the certificate of registration, for its renewal.

A organisation implementing an ongoing multi-year project shall apply for renewal twelve months before the date of expiry of the certificate of registration.

An application made for renewal of the certificate of registration shall be accompanied by a fee of Rs.500/- (Five Hundred only).

The fee for renewal of the certificate of registration shall be remitted by demand draft or banker’s cheque in favour of the “Pay and Accounts Officer, Ministry of Home Affairs”, payable at New Delhi.

In case no application for renewal of registration is received or such application is not accompanied by the requisite fee, the validity of the certificate of registration of such organisation shall be deemed to have ceased from the date of completion of the period of five years from the date of the grant of registration.

If the validity of the certificate of registration of a organisation has ceased in accordance with the provisions of these rules, a fresh request for the grant of a certificate of registration may be made by the organisation to the Central Government as per the provisions of rule 9.

In case a organisation provides sufficient grounds, in writing, explaining the reasons for not submitting the certificate of registration for renewal within the stipulated time, his application may be accepted for consideration along with the requisite fee, but not later than four months after the expiry of the original certificate of registration.(Declaration of Undertaking format Annexure-1)

Every organisation shall apply to the Central Government in Form FC-5, six months before the date of expiry of the certificate of registration, for its renewal.

An organisation implementing an ongoing multi-year project shall apply for renewal twelve months before the date of expiry of the certificate of registration.

No organisation shall make a second application for registration within a period of six months after submitting an application for the grant of registration for the same project.

The FCRA does not specify registration under Income Tax Act as a pre-condition for getting registration under the FCRA. There are instances where FCRA registration has been provided without section 12A registration under the Income Tax Act. But, since FCRA registration is normally provided after satisfying the existence of activities and genuineness of the objectives, which may take sometime and for Income Tax purposes, the organisation has to apply within one year of its creation. Therefore, it is expected of an NGO to have completed its Income Tax registrations prior to applying for registration under FCRA.

The FCRA does not distinguish between registered and unregistered organisations, but the implications of section 6(1) of Foreign Contribution (Regulation) 1976, virtually ensures that only already registered organisations would be able to get themselves registered under FCRA. Section 6(1), categorically specifies that organisations having a definite cultural, economic, educational, religious or social programme shall only accept foreign contribution. In the absence of registration and written documentation, it may not be possible for an organisation to prove definiteness of its aims and objectives. Therefore only those organisations will be eligible for registration under FCRA, which are registered under Societies Registration Act, 1860, the Companies Act, 1956, the Bombay Public Trust Act, 1950 or as a public trust under general law.

In the light of the above discussion, under FCRA, an organisation registered in India, having a definite cultural, economic, educational, religious or social programme is entitled to apply for registration. In India legally valid charitable organisations can be registered as society or trust with foreigners as board members/trustees. Therefore, there is no legal bar on such organisation in making an application to the FCRA. FCRA authorities may exercise greater vigil and caution in processing such application. But as a matter of internal practice FCRA is not granting registration to organisation with foreigners on board. Such registration are given only in exceptional circumstances, very few instances are available.

NGOs engaged in publishing newspaper registered under the Press Registration of Books Act, 1867 are required to furnish details regarding such newspaper and also give a declaration in Form X. The Government Of India issued a notification in 1987 allowing NGOs which have publications other than newspaper as defined in section 1(1) of Press and Registration of Books Act, 1867. Further, a certificate is also required to be obtained from the Registrar of Newspapers of India, that the publication of the NGOs does not form in the category of newspaper as per section 1(1) and falls in the category B, which is permissible. The text of the notification is as under :

“ S.O.760(E), Dated August 3, 1987 [F.No.II/21022/14(5)/87-FCRA-I], published in the Gazette of India.

In exercise of the powers conferred by Section 31 of the Foreign Contribution(Regulation) Act,1976(49 of 1976), the Central Government hereby exempts from the operation of the provisions of section 4(1)(b) any association(not being a political party), organisation or individual (not being a candidate for election) whoso printed work is (i) not a newspaper as defined in section 1(1) of the Press and Registration of Books Act, 1867 (25 of 1867); or (ii) not required to be registered under Party V-A of the said Act, though it may, in fact, be registered by the Registrar of Newspapers of India under the Part : subject to the condition that such Association (not being a political party), organisation or individual (not being a candidate for election) whosoever claim exemption under this order shall furnish a declaration in the Form annexed here to the Central Government and such declaration shall subsequently be furnished in each calendar year by 31st January.”

Foreign Contribution (Regulation) Act, 2010 has clause in Form FC-3 requiring the insertion of a certificate from a competent authority. This certificate can be given by any one of the following :

(1) Collector of District
(2) Department of the Statement Government
(3) Ministry or Department of the Government of India

In this certificate the competent authority certifies the address and the field of activities in which the organisation is working. It also states that there are no adverse antecedents of the organisation, the proposed activities will be beneficial to the people living in that area and the detail of prior permission if taken earlier.

In the light of the powers conferred on the Central Government under section9, it is abundantly clear that any association applying for registration may not automatically get registration. Precaution and discretion can be exercised by the Central Government in order to ensure that the purposes of FCRA are safeguarded. The Central Government may prohibit acceptance of foreign contribution, if it is satisfied that such acceptance is likely to affect the following:

(i) the sovereignty and integrity of India; or
(ii) public interest; or
(iii) freedom or fairness of election to any Legislature; or
(iv) friendly relations with any foreign State; or
(v) harmony between religious, racial, social, linguistic or regional groups, castes or communities.

(a) prohibit any person or organisation not specified in section 3, from accepting any foreign contribution;

(b) require any person or class of persons, not specified in section 6, to obtain prior permission of the Central Government before accepting any foreign hospitality;

(c) require any person or class of persons not specified in section 11, to furnish intimation within such time and in such manner as may be prescribed as to the amount of any foreign contribution received by such person or class of persons as the case may be, and the source from which and the manner in which such contribution was received and the purpose for which and the manner in which such foreign contribution was utilized;

(d) without prejudice to the provisions of sub-section (1) of section 11, require any person or class of persons specified in that sub-section to obtain prior permission of the Central Government before accepting any foreign contribution;

(e) require any person or class of persons, not specified in section 6, to furnish intimation, within such time and in such manner as may be prescribed, as to the receipt of any foreign hospitality, the source from which and the manner in which such hospitality was received:

If an application is rejected and the applicant believes that an unjust order was passed against him, then he can appeal to High Court within a period of sixty days from the date of the order of rejection. The period of sixty days should be counted from the date of the order and not the date of receipt of the order.

The statutory provision - The provision for appeal is provided as per section 31 which is an under:

(2) Any organisation referred to in clause (f) of sub-section (1) of section 3, or any person or association referred to in section 6 or section 9, aggrieved by an order made in pursuance of section 5 or by an order of the Central Government refusing to give permission under this Act, or by any order made by the Central Government under sub-section (2) or sub-section (4) of section 12, or sub-section (1) of section 14, as the case may be, may, within sixty days from the date of such order, prefer an appeal against such order to the High Court within the local limits of whose jurisdiction the appellant ordinarily resides or carries on business or personally works for gain, or, where the appellant is an organisation or association, the principal office of such organisation or association is located.

(3) Every appeal preferred under this section shall be deemed to be an appeal from an original decree and the provisions of Order XLI of the First Schedule to the Code of Civil Procedure, 1908, shall, as far as may be, apply thereto as they apply to an appeal from an original decree.

I hereby declare that the above particulars furnished by me are true and correct and undertake to:

(i ) to inform the Central Government (Ministry of Home Affairs) within thirty days, if any change takes place in regard to the name of the Association, its address, its registration, its nature, its aims and objects together with documentary evidence effecting the change.

(ii) to obtain prior permission for change of Members of the Executive Committee / Governing Council, if, at any point of time, such change causes replacement of 50% or more of such Members as were mentioned in the application no.___________________________ dated _____________ for registration under the Foreign Contribution(Regulation)Act, 2010 (42 of 2010) and undertake further not to accept any foreign contribution except with prior permission till the permission to replace the office-bearer(s) has been granted.

(iii) not to change the Bank and/or branch of the Bank without prior permission of the Central Government [the reason(s) for change of bank or branch of the bank shall have to be relevant and justifiable] and,

(iv) not to accept any foreign contribution unless either registration certificate, as applied for hereinabove, or prior permission of the Central Government under the Foreign Contribution (Regulation) Act, 2010 (42 of 2010) is granted.

Signature of the Chief Functionary
[Name of the Chief Functionary in block letters]
(Seal of the Organisation/Association)