2023 (5) TMI 610 - HC - FEMA

FCRA registration - Delay of opening of an FCRA bank account with the State Bank of India - Petitioner faced difficulties in uploading the FCRA annual return under Form FC-4 under Rule 17 of the Foreign Contribution (Regulation) Rules, 2011 for F.Y 2019-2020, due to the fact that the bank account details were being sought as of 31st March, 2020 - HELD THAT - Admittedly, in the present case, the FCRA account in the SBI was opened by the Petitioner only on 4th October, 2021, which was much beyond the deadline fixed initially i.e. 31st March 2021, and even after the expiry of the extended period till 30th June 2021 vide notification dated 18th May 2021. Petitioner has now opened the said FCRA bank account in SBI Sansad Marg Branch, Parliament Street-New Delhi, and has deposited the penalty and also uploaded the annual return for the F.Y 2019-2020, the relief sought for in this petition has become infructuous. Moreover, none of the cases which have been decided by this Court including WNS Cares Foundation v. Union of India 2023 (1) TMI 944 - DELHI HIGH COURT and Shree Swaminaryan Mandir v. Union of India 2023 (4) TMI 974 - DELHI HIGH COURT would be applicable in the facts of the present case. In the facts of the present case, there was a delay in the opening of the said FCRA bank account and the delay has not been convincingly explained by the Petitioner. Further, the penalty amount has been deposited with Respondent No. 1-MHA, therefore the prayer for refund is not tenable and is accordingly rejected. FCRA FC-4 annual return for the F.Y 2019-2020 which has been uploaded, shall be taken as valid without any payment of further penalties by the Petitioner.

Summary

Issues involved:
The issues involved in the judgment are related to the renewal of Foreign Contribution Regulation Act (FCRA) registration, difficulties faced by the Petitioner in uploading FCRA annual return, the requirement of opening an "FCRA bank account" with the State Bank of India (SBI), and the penalty imposed for delay in opening the bank account.

Renewal of FCRA Registration:
The Petitioner, an NGO, obtained FCRA registration in 2011 and applied for renewal in 2016. The Foreign Contribution (Regulation) Amendment Act, 2020 mandated the opening of an "FCRA Account" with SBI in New Delhi. The Petitioner faced challenges in uploading the FCRA annual return for 2019-2020 due to delayed opening of the designated bank account.

Difficulties in Uploading FCRA Annual Return:
The Petitioner requested the Court to allow filing and uploading of Form FC-4 for the financial year 2019-2020 beyond the scheduled date without penalty. The Court noted the delay in opening the FCRA bank account and directed the Petitioner to deposit the penalty amount, which was done on 28th October 2022. The annual return was subsequently uploaded.

Requirement of FCRA Bank Account with SBI:
The Court observed that the Petitioner opened the FCRA bank account in SBI only on 4th October 2021, missing the initial and extended deadlines. However, as the account was now opened and the penalty paid, the relief sought in the petition became infructuous. The Court differentiated this case from previous judgments where similar issues were addressed.

Penalty Imposed for Delay:
The Court acknowledged the delay in opening the FCRA bank account and the penalty paid by the Petitioner. While the Court rejected the prayer for a refund, it deemed the uploaded FCRA annual return for 2019-2020 as valid without further penalties. The petition, along with pending applications, was disposed of accordingly.