Foreign entities funding NGOs to stall public projects: I-T Dept to SC

“It is found that the petitioner Trust is being funded by foreign entities and is being used to stall public projects, which are in the interest of India. It is also found that the petitioner Trust is hiring paid protesters to protest against public projects of India. More than 90% of the income of the petitioner Trust is from foreign donations,” the affidavit said.

It added that the Trust’s “activities appear to be a systematic effort by foreign entities to stall development projects in India, which though has not been a factor considered while issuing the notice under Section 148 of the Income Tax Act, it would be a relevant factor to support the finding of the Hon’ble High Court that this is not a fit case for exercise of jurisdiction under Article 226”.

A bench of Justices Sanjiv Khanna and Dipankar Datta was hearing an appeal of the NGO challenging the November 8 order of last year of the Delhi High Court.

The Trust had approached the Delhi High Court challenging the notice issued to it under Section 148 of the Income Tax Act, 1961. The provision enables the department to reassess the tax returns where it is of the view that income has escaped assessment.

The I-T Department pointed out that the Trust had received Rs 14.27 crore from 2016-2021 of which Rs 13.66 crore was by way of foreign contributions.

For the year 2015-16, the foreign donors included Foundation for Ecological Security, Centre for Study of Public, DWOI-New Ways to Palo Alto, Global Green Grants, European Climate Change Foundation, Earthday Network, Earthlife Coal, Asia Resource Monitoring Centre, Oxfam India and Sara Services Charitable Trust.

The Trust was registered in March 2003 with the object of conducting research and development on environmental issues and human behavioural aspects to implement programmes for community development and to provide assistance to communities to redress injustices and uphold their rights.

However, the survey by the investigation wing revealed that the Trust “has funded protests against development projects in a village in Odisha under the guise of distribution of relief packages to households”. “It is found that Environics Trust has transferred an amount of Rs 1,250 per individual from its ICICI bank account… to those who were involved in the said protests and named in the FIR registered in this regard. Thus, the Environics Trust is misusing the foreign contribution for stalling development projects instead of using them for the stated purpose,” the affidavit said.

The I-T department said, “There are evidence such as MoU between a foreign entity ‘Both ENDS’ and the…Trust dated 01.09.2020 which make it clear that…Trust was involved in the said protests in Odisha. These protests were apparently funded by ‘Fair Green and Global Alliance’, which consists of 6 Dutch member Organization.”

The affidavit further said, “There is an agreement between ‘Oxfam India’ and Environics Trust, which shows that Oxfam India funded the… Trust to mobilize communities with the help of local unions against the coal industries.” It added that the Trust “was found to be indulged in protest against a multinational corporation in Visakhapatnam as per evidence available in the form of email dated 05.06.2020”.

The Trust “was found to be involved with Mineral Inheritors Right Association (MIRA) for protesting against Steel and Coal Projects in Odisha that is not as per the objects of the Trust… Involvement of Environics Trust with European Climate Foundation (ECF) for protesting against Thermal Power Projects in India is not as per the objects of the Trust,” it said.

The Department also took exception to what it said was the NGO “suppressing” from the HC the “material fact… regarding the cancellation of its registration under Section 12A, 12AA and 12AB of the IT Act”. It had also not placed on record “the latest development that the registration under FCRA of the…trust has also been cancelled”.