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DELHI HIGH COURT
VIBHU BAKHRU, AMIT MAHAJAN
Mizpah Charitable Trust – Appellant
Versus
Union of India – Respondent
JUDGMENT
Vibhu Bakhru, J.
Introduction
1. The petitioner impugns the Notification bearing No.S.O. 1070(E) dated 26.04.2013 (hereafter the `impugned notification') issued by the respondent under Section 41 of the Foreign Contribution (Regulation) Act, 2010 (hereafter the `FCR Act'). The petitioner claims that the impugned notification is ultra vires of the provisions of the FCR Act. In addition, the petitioner also impugns an order dated 12.03.2014 (hereafter `the impugned order') issued by the respondent, whereby the petitioner was advised to pay a penalty of Rs.11,78,260/- (Rupees Eleven Lakhs Seventy-eight Thousand Two Hundred & Sixty Only) for compounding the offence of delay in filing of the annual returns under the FCR Act, for the financial years 2009-10, 2010-11 and 2011-12. The petitioner contends that the delay in filing an annual return is not an offence punishable under the FCR Act. It is also contended that since the FCR Act came into effect on 01.05.2011, the same cannot be applied to impute commission of an offence prior to that date.
Controversy
2. The questions that fall for consideration before this Court are:
(a) whether the impugned notification is violative
Delay in filing annual returns under the Foreign Contribution (Regulation) Act constitutes non-compliance and is subject to penalties; however, penalties cannot be imposed retrospectively for actions....
The delayed opening of the FCRA bank account and subsequent actions of the petitioner influenced the court's decision in validating the uploaded annual return without further penalties.
Compounding a violation under the FCRA Act rectifies the applicant's status, and vague basis for rejection violates principles of natural justice.
Organizations that opened their FCRA accounts after the amendment came into effect could still fill up the account details in Form FC-4 and submit the same without facing coercive action or penalty.
The court established that genuine hardship must be considered in applications for condonation of delay in filing tax-related documents, emphasizing the need for a compassionate approach by authoriti....
Point of law : By the time suspension order was passed, the Central Government had neither issued any notice of hearing / Show Cause notice in terms of sub-section (2) of Section 14 nor had it initia....
The court established that a liberal interpretation of 'genuine hardship' is essential in tax matters, particularly for public charitable trusts, to ensure substantial justice.
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