Group of Citizens agitating for their Rights without a Political Goal can’t be denied Foreign Contribution, says SC [Read Judgment]

Customs Valuation - Foreign Contribution - Income Tax Act - SC - Taxscan

Last month, while reserving its order, the Supreme Court said that the voluntary organizations which have absolutely no connection with any kind of politics cannot be denied access to foreign contribution.

The appellant, Indian Social Action Forum (INSAF) is a registered society involved in resisting globalization, combating communalism and defending democracy. In the Writ Petition filed before the High Court was dismissed. The appellant preferred the appeal in the apex court and contended that Sections 5(1) and 5(4) of the Foreign Contribution (Regulation) Act, 2010 and Rules 3(i), 3(v) and 3(vi) of the Foreign Contribution (Regulation) Rules, 2011 are violative of Articles 14, 19(1)(a), 19(1)(c) and 21 of the Constitution of India. And hence must be declared void.

The decision of a two-judge bench consisting of Justice L Nageswara Rao and Justice Deepak Gupta comes against a petition by the Indian Social Action Forum (INSAF) that challenged certain provisions of the FCRA, claiming it violated certain fundamental rights as guaranteed by the Constitution. However, the bench read down and diluted it.

“To save this provision from being declared unconstitutional, we hold it is only those organizations that have a connection with active politics, or take part in politics, that is covered,” the bench said.

“Support to public causes by resorting to legitimate means of dissent like bandh, hartal, etc. cannot deprive an organization of its legitimate right of receiving foreign contribution,” the court affirmed.

“Any organization which supports the cause of a group of citizens agitating for their rights without a political goal or objective cannot be penalized by being declared as an organization of a political nature”, the bench said.

The court pointed out that the legislative intent behind the law had been to prohibit political organizations from receiving foreign contributions. It added that a balance had to be drawn between that objective and the rights of voluntary organizations to have access to foreign funds.

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