Foreign entities are funding NGOS to stall public projects: I-T Dept to top court

THERE IS “a concerted effort by foreign entities in funding Indian Ngos/trusts in order to stall the public projects and affect the economic interests of India ”, the Income Tax Department told the Supreme Court while opposing the plea by NGO Environics Trust challenging the notice issued to it by the department for reassessment of tax returns.

In an affidavit filed before the top court, the I-T department said its investigation wing had initiated a survey against the NGO on September 7, 2022 and “after analysing the material and based on independent application of mind to the evidence, it was found that” its“activities are neither genuine nor being carried out as per the objects of the Trust”.

“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 st all 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 justice ssanjivkh anna and dip anka rd att awash earing an appeal of th eNG O challenging the November 8 order of last year of the Delhi High Court.

The Trust had approached the D el hihc challenging the notice issued to it under Section 148 of the Income Tax Act ,1961. The provision enables the department to re assess 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.

The Trust was registered in March 2003 with the object of conducting research on environmental issues and human behavioural aspects to implement programmes for community development and to provide assistance to communities to redress injustices. But 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 individualfrom it si ci ci bank account ... to those who were involved in the said protests and named in the FIR. Thus, the Environics Trust is mis using the foreign contribution for stalling development projects instead of using them for the stated purpose ,” the affidavit said.