an initiative of FMSF & CPA

       
 

OFFENCES & PENALTIES

Common offences subject to severe penalty

NGO’s receiving foreign contributions should guard against violating the provisions of FCRA. The following are a few common offences, which are subject to severe penalty and punishment:

I. NGO’s accepting foreign contribution without registration or prior permission.
II. NGO’s having FCRA registration but receiving foreign contribution in different bank accounts.
III. NGO’s having FCRA registration and not filing annual return in prescribed Form.
IV. NGO’s having FCRA registration filing false information in the annual return.
V. NGO’s with FCRA registration or prior permission not maintaining the required books of account.
VI. NGO’s receiving foreign contribution on behalf of other NGO’s not having FCRA registration.
VII. Not filing nil return in the year when foreign contribution is received.
VIII. Diversion of funds for the purposes other than for which they were received.
IX. Not maintaining the separate books of account
X. Mixing of Local funds with foreign funds.

Press note dated 09.01.1998 issued by Ministry of Home Affairs: Ministry of Home Affairs (FCRA division) in its press note dated 09.01.1998 [refer Annex. 44.1] has clarify that the above mentioned offences would be treated as violation of FCRA attracting severe penalties. The relevant extract of the press note is as under:

“ Non-submission of the return in time; furnishing of false information; mis-utilisation or diversion of foreign contribution for purposes other than those for which such contribution was received; transfer of contribution to any other organisation who have not been permitted to receive foreign contribution either by way of registration or prior permission, constitute a violation of the provisions of the Act and attract penal action”. {This Press Note issued in context with FC(R)A, 1976 is presumed to have the same applicability with FC(R)A, 2010}

Other Offences:

I. NGOs giving false intimation or seeks prior permission or registration by means of fraud, false representation or concealment of material fact.
II. NGOs accepts, or assists any person, political party or organisation in accepting ,any foreign contribution or any currency or security from a foreign source
III. Seizure and confiscation

Under FCRA the Central Government has the power of seizing and confiscating articles and currency if held in contravention.

The relevant sections are as under:

Section 28

Any article or currency or security which is seized under section 25 shall be liable to confiscation if such article or currency or security has been adjudged under section 29 to have been received or obtained in contravention of this Act.

Section 29

(1) Any confiscation referred to in section 28 may be adjudged—
a) without limit, by the Court of Session within the local limits of whose jurisdiction the seizure was made; and
b) subject to such limits as may be prescribed, by such officer, not below the rank of an Assistant Sessions Judge, as the Central Government may, by notification in the Official Gazette, specify in this behalf.
(2) When an adjudication under sub-section (1) is concluded by the Court of Session or Assistant Sessions Judge, as the case may be, the Sessions Judge or Assistant Sessions Judge may make such order as he thinks fit for the disposal by confiscation or delivery of seized article or currency or security, as the case may be, to any person claiming to be entitled to possession thereof or otherwise, or which has been used for the commission of any offence under this Act.

Section 30

No order of adjudication of confiscation shall be made unless a reasonable opportunity of making a representation against such confiscation has been given to the person from whom any article or currency or security has been seized.

Procedure for seizure

Section 27

The provisions of the Code of Criminal Procedure, 1973 shall apply in so far as they are not inconsistent with the provisions of this Act to all seizures made under this Act.

Persons liable for punishments under FCRA

The following persons may be liable to penalties and punishments depending on the nature of the offences:

i. NGO
ii. Chief Functionary
iii. Governing body members
iv. Other officers
v. Other persons who indulge.

Penalties and punishments

Under FCRA laws, severe penalties and punishments are specified which can be invoked depending on the nature and quantum of the offence and the persons involved.

The following are the possible penalties under FCRA:

i. seizure and confiscation of foreign contribution receipts.
ii. fine up to 5 times the value of the foreign contribution spent.
iii. inspection and seizure of accounts and records.
iv. compulsory prior permission requirement even if the NGO is registered under FCRA.

Overall Summary

To sum up the discussions :

(i) Violation of FCRA can attract severe penalties which could be as under :
a) seizure and confiscation of foreign contribution receipts.
b) fine upto 5 times the value of the foreign contribution spent.
c) inspection and seizure of accounts and records.
d) compulsory prior permission requirement even if the NGO is registered under FCRA.
e) imprisonment upto 5 years and/or fine.
f) prohibition on accepting foreign contribution for 3 years for persons convicted twice.