Entity Recognised As Charitable Under Income Tax Act With S.12A Registration Cannot Be Treated Otherwise Under FCRA: Madras High Court

The Madurai Bench of the Madras High Court has held that a trust already recognised as a charitable organisation under the Income Tax Act cannot be ignored as such while considering its application under the Foreign Contribution (Regulation) Act, 2010 (FCRA). A Single Judge Bench of Justice G.R. Swaminathan was dealing with a writ petition filed by Arsha Vidya Parampara Trust challenging the rejection of its FCRA registration by the Ministry of Home Affairs . The Bench stated that when according to the Income Tax Department, the petitioner is a charitable organization, it cannot cease to be one under FCRA regime. That is the true import of Section 52 of the Act. The certificate issued in favour of the petitioner under Section 12A of the I.T Act is definitely a relevant material and failure to consider the same indicates non-application of mind. The High Court noted that the Trust was granted registration under Section 12A of the Income Tax Act, 1961, pursuant to an order of the Income Tax Appellate Tribunal, and the said registration was still valid and subsisting. The Bench held that this 12A registration is a relevant and material consideration while examining an organisation's eligibility under the FCRA regime. It observed that the FCRA, 2010 does not override other laws, and Section 52 of the FCRA expressly states that its provisions are in addition to, and not in derogation of, other statutes. Accordingly, when the Income Tax Department has already recognised an entity as a charitable organisation, the authorities under the FCRA cannot casually disregard that status, unless there is clear material showing inconsistency or misuse. The Bench observed that the failure of the FCRA authority to even consider the existing Section 12A registration clearly amounted to non-application of mind. The Bench held that an organisation cannot “cease to be charitable under the FCRA regime” when it continues to be treated as charitable under the Income Tax Act. In view of the above, the High Court set aside the rejection order and remitted the matter back to the FCRA authority for fresh consideration, directing it to take into account all relevant materials, including the Trust's income-tax registration. The writ petition was allowed. Case Title: Arsha Vidya Parampara Trust Vs. The Union of India & Anr Case No.: WP(MD) No. 29610 of 2025 Appearance for Petitioner: Mr, Sricharan Rangarajan, Senior Counsel for Mr. Mohamed Ashick Appearance for Respondents: Mr. A.R.L. Sundaresan, Additional Solicitor General of India assisted by Mr. K. Govindarajan, Deputy Solicitor General of IndiaClick Here To Read/Download Order

Entity Recognised As Charitable Under Income Tax Act With S.12A Registration Cannot Be Treated Otherwise Under FCRA: Madras High Court

Rajnandini Dutta

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