Foreign funding for NGOs a bid to stall public projects: Govt in SC | Latest News India - Hindustan Times
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Foreign funding for NGOs a bid to stall public projects: Govt in SC

Apr 16, 2024 08:12 AM IST

A number of non-profits had their FCRA licences revoked as a result of the central government’s increased crackdown on NGOs and their foreign funding in the past few years

There is a concerted effort by foreign entities to fund Indian NGOs and trusts aiming to obstruct public projects and undermine India’s economic interests, the central government told the Supreme Court on Monday.

The Centre’s affidavit was filed on Monday within hours of Mehta raising preliminary objections to entertaining Environics Trust’s petition by the top court (ANI)
The Centre’s affidavit was filed on Monday within hours of Mehta raising preliminary objections to entertaining Environics Trust’s petition by the top court (ANI)

Defending its action to open tax reassessment proceedings against non-profit Environics Trust, the Centre underscored concerns about the misuse of foreign funds by certain NGOs, including the Centre for Policy Research (CPR) and Oxfam India, to stall essential public projects critical for national development.

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In an affidavit filed before the court, the income-tax department, represented through solicitor general Tushar Mehta, stated that while the tax reassessment proceedings were initiated based on specific facts related to the Environics Trust, broader concerns about foreign funding influencing Indian NGOs and trusts were pertinent.

The Centre pointed out that Environics Trust, along with several other organisations like CPR, Oxfam India, Legal Initiative for Forest and Environment (LIFE) and Care India Solution for Sustainable Development (CISSD) exhibited close relations and interlinked key personnel.

“A concerted effort by foreign entities in funding Indian NGOs/Trusts in order to stall the public projects and affect the economic interests of India has come to light...in the case of Environics Trust, survey action was carried out along with some other trusts like CPR, Oxfam India, LIFE and CISSD. It is seen that these organisations are having close relations with each other and their main persons are interlinked. These NGOs are directly or indirectly involved in agitation or litigation beyond their objects,” stated the affidavit.

All these NGOs are funded by foreign entities for the activities that cannot be said to be genuine or in line with the objects of these institutions, the Centre held. The Environist Trust is engaged in research of environmental issues and human behaviour.

A number of non-profits had their Foreign Contribution Regulation Act (FCRA) licences revoked as a result of the central government’s increased crackdown on NGOs and their foreign funding in the past few years. While the Centre defends the crackdown in the face of mounting concerns about certain NGOs misusing foreign funding and to protect national security and sovereignty, a number of non-profits have voiced their opposition to the removal of funding that they require to support their work in areas such as the environment, health, education and gender.

The Centre’s affidavit was filed on Monday within hours of Mehta raising preliminary objections to entertaining Environics Trust’s petition by the top court.

Earlier in the day, a bench of justices Sanjiv Khanna and Dipankar Datta took up the trust’s petition against a March 2023 order by the revenue department seeking to impose a tax liability on 2.23 crore that the NGO had received in 2016-17 because the objectives of the trust were purportedly not followed. By its judgment in November 2023, the Delhi high court rejected the NGO’s challenge and pulled it up for suppressing material facts regarding its registration cancellation in September 2023.

When the matter was taken up on Monday, senior counsel S Muralidhar appeared for the NGO. Mehta, however, urged the bench to dismiss the petition at the threshold, pointing out that not only the NGO was guilty of concealing pertinent facts from a constitutional court, but it was also involved in activities detrimental to public projects and national growth.

“I am objecting to their ‘holier than thou’ approach. They conceal facts. They have not disclosed that their licence stands cancelled. Their FCRA license has also been revoked. But they have chosen to conceal it,” contended Mehta, adding he has an affidavit ready to show the NGO’s conduct.

Responding, Muralidhar said the revenue department was trying to prejudice the case of the NGO, which should get the first opportunity to present its case as a petitioner.

The court agreed to hear the matter in detail later, asking Mehta to bring the department’s affidavit on record. The bench further clarified that tax reassessment proceedings may continue but final orders shall not be passed without the leave of this court. It directed the NGO to cooperate in the reassessment proceedings.

According to the affidavit, the Environics Trust received funding from foreign entities such as Both Ends, Greenpeace and PYWP, which influenced its activities against public projects in India and abroad. The Centre accused the trust of arranging paid protestors to oppose these projects, leading to disruptions. Additionally, it highlighted that more than 90% of the trust’s income came from foreign donations, indicating a systematic effort by foreign entities to stall development projects in India.

Moreover, the affidavit referred to alleged instances where the Environics Trust funded protests against development projects in Odisha, misusing foreign contributions intended for relief efforts. It also cited evidence of the trust’s involvement in protests against multinational corporations and coal projects, contrary to its objectives.

The Centre emphasised that the tax reassessment proceedings were based on tangible material collected during a survey conducted by the income-tax department, which revealed activities inconsistent with the trust’s stated objectives. It argued that the jurisdictional requirements for reopening tax assessments under the Income Tax Act were met and the proceedings were not subject to judicial review based on the sufficiency or correctness of reasons.

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