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The Ministry of Home Affairs (MHA) extended the time limit or due date for filing the FCRA Annual Return in Form FC4 for the fiscal year 2020-21 from 31.12.2021 to 30.06.2022. This extension came almost three months after the due date had passed.
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Rules as per Foreign Contribution (Regulation) Act, 2010
According to Rule 17 of the Foreign Contribution (Regulation) Rules, 2011, (FCRR), anyone who receives a foreign contribution under the Foreign Contribution (Regulation) Act, 2010, (FCRA) must submit a signed or digitally signed report in electronic form in Form FC-4 with scanned copies of the income and expenditure statement, receipt and payment account, and balance sheet for each fiscal year beginning on April 1st within nine months of the financial year’s close.
Associations that did not receive foreign contributions during a specific fiscal year must also submit a “Nil” FC4 return for that fiscal year within the aforementioned time frame.
This means that companies that receives foreign contributions or has FCRA registration must submit the annual return in FCRA Form FC4 for FY 2020-21 by December 31, 2021, i.e. within 9 months of the end of FY 2020-21. (March 2021). We should file The ‘Nil’ by that date, which is December 31, 2021.
The Notification
According to the public notice posted on the FCRA website, the Central Government hereby extends the deadline for submitting/uploading online annual returns for the fiscal year 2020-21 until June 30, 2022, in the exercise of the powers conferred by Section 50 of the Foreign Contribution (Regulation) Act, 2010.
Penalty for non-submission of Annual Return in FC-4
Non-submission or late submission of the mandatory Annual Return in FC-4 is a violation of FCRA 2010 and FCRR 2011 and is punishable under Section 37 of the FCRA Act.
The penalty for failure to submit or late submission of the mandatory Annual Return in FC4 is Rs. 1, 00,000, or 5% of the foreign contribution received, whichever is greater. Companies that did not file their annual return in Form FC-4 for the fiscal year 2020-21 by December 31, 2021, can now do so until June 30, 2022, without penalty. Further, many associations have already submitted Form FC4 between January 1st, 2022, and March 31st, 2022 after paying a hefty penalty.
The Order is silent on what will happen to associations that have filed their Form FC-4 with the penalty after December 31, 2021. There is no clarification on the subject. Further, to avoid ambiguity and uncertainty, such extensions of the due date for filing returns must be issued well in advance of the due date’s expiration.
Takeaway
In short, the validity of those FCRA entities whose 5 years validity period expires between 01.04.2022 and 30.06.2022 and who applied for renewal before the expiry of the 5 years validity period will get extension until 30.06.2022 or until the date of disposal of the renewal application, whichever is earlier.
