International NGO Commonwealth Human Rights Initiative (CHRI) on Thursday said it would seek legal recourse against the cancellation of its Foreign Contribution Regulation Act registration by the Union home ministry last week.

FCRA registration is mandatory for any NGO or association to receive foreign funds.

The CHRI, which works for human rights in Commonwealth countries, said it had explained every alleged irregularity cited by the ministry of home affairs (MHA) and that the cancellation order did not mention why the explanations were deemed unsatisfactory.

In a statement, the CHRI said it had fully cooperated with the ministry in all the proceedings initiated since June 2021, submitting detailed responses against the allegations contained in the suspension order, the audit team’s observations and the showcause notice.

“More than 7,500 pages of records containing details of our transactions were photocopied and submitted on MHA’s demand, within the deadlines stipulated. Nothing in the cancellation order indicates why the MHA finds our explanation unsatisfactory, unreasonable or untenable,” the statement said.

“CHRI will seek all remedies in law to reverse the MHA’s cancellation order. Meanwhile, CHRI will continue to work for the practical realisation of people’s human rights, access to justice and access to information, as per its mandate.”

The Narendra Modi government has been accused at home and abroad of harassing NGOs in multiple ways, including preventing them from receiving foreign funding.

The CHRI’s FCRA registration was suspended for 180 days in June last year, and the suspension was extended in December by another 180 days.

According to the CHRI, the home ministry’s order of April 19 this year cancelling its FCRA registration cited three major grounds.

**That the CHRI had deposited a sum of Rs 31.9 lakh with its FCRA bank account although the money was not covered under the definition of “foreign contributions”.

“On two occasions, CHRI explained to the MHA, with supporting evidence, that these funds were received from foreign donor agencies situated in the United Kingdom and Sri Lanka for carrying out specific project activities in India in 2014 and 2018 respectively,” the CHRI statement said.

“Even though these were consultancy project agreements, out of abundant caution, CHRI reported them to MHA as contribution received from ‘foreign sources’ which indeed they are.”

**That the NGO had provided incomplete information in the FC-4 Form in financial year 2018-2019 by failing to reveal details of its activities and projects for which foreign funds had been received and utilised.

To this, the NGO said it had explained to the ministry on three occasions that it had submitted online the details of project-wise foreign contributions received and utilised during the period, “along with the opening and closing balances of funds as part of the receipts and payments account and the income and expenditure account for the same period”.

The home ministry also alleged that the CHRI had provided incorrect and conflicting information in the FC-4 Form in AR (annual report) from 2013-14 to 2018-19 on the opening and closing balances relating to foreign contributions.

Contesting this, the NGO has said it follows an accrual-based accounting system and not a cash-based accounting system.

“During the August 2021 audit of our books of accounts conducted by the MHA’s audit team, in order to arrive at the year wise opening/ closing balance, they have taken into consideration only the cash and bank accounts but not taken into consideration fixed deposits reported under the head,” the statement said.

“This has resulted in the differences in the opening and closing balance as calculated by the CHRI and MHA’s audit team.”

The statement added that it would not be appropriate to compare the balances shown in FC-4 returns with the receipts and payment accounts.

It further said that the ministry’s audit team report had typographical errors.

**That the NGO had utilised foreign contributions on activities beyond the scope of the act for which the registration was granted, thereby violating FCRA provisions.

“CHRI is unable to offer any explanation against such a vague and bald allegation which finds mention only in the cancellation order but not during any of the prior proceedings,” the NGO said.

“However, in the observations of its audit team and the December 2021 showcause notice, MHA had alleged that CHRI has utilised foreign contributions received for the benefit of foreign countries and foreign citizens from FYs 2013-14 to 2019-20. This allegation is not mentioned in the cancellation order.”

The NGO said it had explained to the ministry on three occasions during the probe that there was nothing in the FCRA that proscribed activities abroad by an FCRA-registered association, especially when such activities furthered the declared “purpose for which the contribution has been received” as well as the stated aims and objectives of the association.

“CHRI’s activities abroad are squarely in compliance with the provisions of the Act…. The total cost on activities undertaken by the CHRI with benefit to citizens of foreign countries including CHRI’s staff time, as a percentage of the total utilisation of foreign contribution during the FYs 2013-14 to 2019-20 is 7.37 per cent only,” the statement said.