I continue with our Dialogue on cancellation of FCRA. There is no doubt that due to large scale cancellations many genuine organisations have also been put in a lot of difficulty and anguish. Several of them, if not all, have upto date filing of returns. Despite the same, these organisations are facing uncertainty about their future, due to freezing of their bank accounts. These organisations do not know how to manage their activities. They have to pay salaries, rents, food for children and for other essential and genuine needs. If they withdraw funds from FCRA account, they are going against the law, since they cannot touch that money once FCRA is cancelled. However they may not have much choice considering the ground realities of running projects.
FCRA Dept. seems to live in its own world. While it is acknowledged that they have to weed out non-compliant, but I am sure they can do so in a manner that least disrupts the activities of the genuine organisations. FCRA Dept.’s defence seems to be that they have sent notices to all the cancelled organisations and they took this action only because either these notices have been returned, undelivered or remained unanswered. Such a large number of organisations were untraceable seems a bit difficult to digest, however even if it is accepted, why not consider suspending the registration under S. 13 of FCRA 2010 Act. In fact the very purpose of bringing suspension clause was realisation, at the time of drafting the legislation, that before cancellation a final opportunity needs to be provided considering its severity. However the Dept. has gone ahead and cancelled registration of more than 4100 organisations.
Further S. 14 (2) goes on to state that ‘No Order of cancellation of certificate under this section shall be made unless the person concerned has been given a reasonable opportunity of being heard’. How many have been given this opportunity is anybody’s guess.
This is not the first time that the Dept. has taken such brazen action. Last year, rules required that all organisations transferring funds even to registered organisations would require prior permission from the Dept. This despite several representations submitted to the Dept. by several organisations, including two by SRRF, that this is against the very principle of the FCRA Act which allows registered organisations to receive funds. Soon they realised the Rule was not practical since the Dept. could never handle the scrutiny of such a large volume of transfers. They had to initially issue clarification and subsequently amend the rule.
Some confusion is there, if organisations have to have their registered office address with FCRA Dept. It is clarified that the Dept. asks for ‘postal address’ when one applies for the registration and not registered office address (see new Forms FC3 & FC4 – application for registration & prior permission ). Problem is that once this address has been put on record, and if your postal address has changed, you need to update the same with Dept., otherwise any notices issued by the Dept. may not be received. This is to be done manually by submitting relevant form for the same.
Even in case of cancellations there may be a silver lining for some of the cancelled organisations who have otherwise complied with the law. It is suggested that all such organisations should immediately submit evidence that they have complied with various provisions of the Act.
A lot of pressure is being built on the Department on this account and let us hope it will result in some positive development, but in the meantime ensure that you have put up your case with the dept.
Hoping for early resolution