The Income Tax Department has made a startling assertion, suggesting a coordinated effort by foreign entities to financially back Indian NGOs and Trusts with the purported aim of stalling public projects and undermining the economic interests of India. This revelation emerged during the department’s opposition to a plea by the NGO Environics Trust, challenging a notice issued for the reassessment of tax returns.

In an affidavit submitted to the Supreme Court, the Income Tax department detailed its investigation into the NGO, initiated on September 7, 2022. Following a thorough analysis, the department concluded that the activities of Environics Trust did not align with the stated objectives of the Trust and were, in fact, funded substantially by foreign entities. Moreover, the affidavit alleged that the Trust was utilizing these funds to orchestrate protests against public projects in India, purportedly hiring paid demonstrators for this purpose.

The affidavit highlighted that over 90% of the Trust’s income stemmed from foreign donations, pointing to a systematic effort by external forces to obstruct developmental initiatives within India. While this aspect was not explicitly considered during the issuance of the notice under Section 148 of the Income Tax Act, the department argued that it should be a relevant factor in supporting the decision that the case was not suitable for the exercise of jurisdiction under Article 226.

In a bench presided over by Justices Sanjiv Khanna and Dipankar Datta, the NGO’s appeal against the November 8 order of the Delhi High Court was under consideration. The Trust had contested the notice issued under Section 148 of the Income Tax Act, 1961, which empowers the department to reassess tax returns if income evasion is suspected.

Further scrutiny revealed that the Trust had received significant foreign contributions, with Rs 13.66 crore out of Rs 14.27 crore received between 2016 and 2021 originating from abroad. The affidavit detailed specific foreign donors, including notable organizations such as Oxfam India and the Foundation for Ecological Security.

Despite being registered with the objective of addressing environmental concerns and promoting community development, the investigation unearthed instances where the Trust allegedly diverted funds towards instigating protests against development projects. Specifically, the affidavit cited examples in Odisha and Visakhapatnam where the Trust’s involvement in protests against multinational corporations and coal projects deviated from its stated objectives.

Furthermore, the department accused the NGO of concealing pertinent information from the High Court regarding the cancellation of its registration under various sections of the Income Tax Act, as well as its FCRA registration.

In light of these findings, the Income Tax Department’s affidavit presents a damning indictment of the alleged misuse of foreign funds by Environics Trust, painting a picture of external interference aimed at subverting India’s developmental agenda.