an initiative of FMSF & CPA

       
 

REGISTRATION PROCESS UNDER FC(R)A

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, 2010, 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.

The Central Government may, by notification in the Official Gazette, specify—

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.

Application for Registration

An application for registration of an organisation for acceptance of foreign contribution shall be made electronically online in Form FC-3 e-signed by the Chief Functionary alongwith the seal of the association Further, the association would have to upload the scanned copies of the following documents alongwith the application for registration.

SI. No Document Name Maximum Size Limit of PDF document
1. Registration Certificate of Association. 1 MB
2. Memorandum of Association/Trust Deed. 5 MB
3. Activity Report for the Last 3 Years. 3 MB
4. Audited Statement of accounts for the last three years. 5 MB

Apart from the above mentioned information, the following information should be kept ready while filling the application for registration

i. Contact details of the association such as Address, e-mail ID, Website, Landline no. etc.
ii. Contact details of the Chief functionary such as mobile no. and mail id
iii. Registration details of the Organization such as date and place of registration, PAN etc.
iv. List of Main objects and definite programmes for which the contribution is to be accepted / utilised.
v. Details of Key functionaries of the Association such as name, nationality, contact details, relationship with other key functionaries.
vi. Details of any prior permission granted to the organization.
vii. 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.
viii. If the association has submitted any application earlier than its reference number should be mentioned.
ix. If the association has received any foreign contribution with or without the prior approval of the Central Government, then the detail should be given.
x. Details of Designated Bank Account through which the foreign contribution shall be received.
xi. Details of Utilization Bank Account through which the foreign contribution would be utilized, if any.

The scanned image of signature of Chief Functionary and image of Seal of the Association which are saved in JPG/JPEG format are also required to be uploaded:

SI. No Instruction for Images
1. Image Dimension of Signature should be 140(Width) × 60(Height) Pixel only.
2. Ensure that the size of the scanned signature image is not more than 50 KB.
3. Image Dimension of Seal of Association should be 40(Width) × 60(Height) Pixel only.
4. Ensure that the size of the scanned image of Seal of Association is not more than 100 KB

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 in Form FC-6 shall be submitted electronically 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 paid through online payment gateway provided at the FCRA website after the submission of such application. No Bank draft/cheque would be accepted after the recent amendments.

Time limit for making application for registration

No specific time limit has been provided under FCRA Act or rules 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 requirement in Form FC-3, which provides for uploading 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.

Further, FAQs issued by the FCRA department also mention the existence of three years of the organization as a pre-condition for applying for registration under FCRA, 2010.Also, the as per the FAQ, the organization should have spent at least Rs. 10,00,000 over the last three years as programme expenditure. The FAQ issued in this regard has been provided below

“ Normally be in existence for at least three years and has undertaken reasonable activity in its chosen field for the benefit of the society for which the foreign contribution is proposed to be utilised. For this purpose, the association should have spent at least Rs.10,00,000/- over the last three years on its aims and objects, excluding administrative expenditure.”

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 per the old forms) 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 genuineness and the relevance of their purpose.

Field Enquiry

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.

Time Limit For Granting Registration

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.

Refusal to grant registration

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.

Validity Of Certificate

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. In a recent circular, the FCRA department has extended the validity of the FCRA registration certificate till 30th October, 2016 for all the registration expiring on or before 30th September, 2016.

Whether registration under Income Tax Act necessary

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.
Foreigners on Board at the time of registration

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, 2013, 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.

However, foreigners other than Indian nationals, may be appointed as executive committee members after obtaining prior approval from the central government if the foreigners are fulfilling any of the following conditions

• the foreigner is married to an Indian citizen;
• the foreigner has been living and working in India for at least five years;
• the foreigner has made available his/her specialized knowledge, especially in the medical and health related fields on a voluntary basis in India, in the past;
• the foreigner is part of the Board of Trustees/Executive Committee in terms of the provisions in an inter-governmental agreement;
• the foreigner is part of the Board of Trustee/Executive Committee, in an ex-officio capacity representing a multilateral body which is exempted from the definition of foreign source.

NGOs bringing out newspapers/newsletters

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.”

POWERS OF GOVERNMENT TO PROHIBIT ACCEPTANCE OF CONTRIBUTIONS

In the light of the powers conferred on the Central Government under section 9, 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.

The Central Government may—
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:

Appellate remedies

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.