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Registration Under FCRA

Registration Details under FCRA

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.
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 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.
Time limit for making application for registration
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.
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.
Undertaking By The Chief Functionary
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.


Text of the undertaking: The text of the undertaking is a follows:
“ 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.

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