The Madurai Bench of the Madras High Court has dismissed an appeal seeking registration under the Foreign Contribution (Regulation) Act, 2010 (FCRA), holding that an organisation seeking foreign funding must correctly disclose the nature of its activities.
A Division Bench of Justice G.R. Swaminathan and Justice M.D. Sumathi found that the appellant trust’s activities were religious in nature, although its FCRA application had not identified the organisation as a religious entity.
Background
Kanzeon Public Charitable Trust, which operates a Montessori School and a Zen Meditation Centre in Kodaikanal, had sought FCRA registration to receive foreign contributions. The trust was already registered under Sections 12AB and 80G of the Income Tax Act.
The Central Government rejected its application. The trust challenged that decision before the High Court, arguing that its Zen meditation activities should not be treated as religious programmes. The trust also relied upon earlier judicial decisions concerning religious and cultural organisations.
The Bench examined the trust’s stated association with Zen Buddhism and noted that the FCRA application requires an organisation to disclose whether its activities are religious, cultural, economic, educational or social. The Court observed that Zen is a school of Mahayana Buddhism and therefore falls within the broader religious category.
The Court also clarified that being a religious organisation does not by itself prevent an entity from seeking FCRA registration. However, complete and accurate disclosure is required while making the application.
"An application seeking FCRA registration should correctly disclose the nature of the applicant. Failure to do so will result in rejection of the application. Even if all the details are in order, the authority is still at liberty to negative the request. The decision of the authority will not be judged on a high threshold but in the light of the parameters mentioned in para 11. This is because there is no right as such to receive foreign contribution. It can at best be a privilege."
The Bench further distinguished religious organisations from entities engaged in education or preservation of Indian Knowledge Systems. It held that organisations teaching subjects such as Vedanta, the Bhagavad Gita, Upanishads and Yoga through educational or cultural programmes may fall within those categories rather than automatically being treated as religious institutions.
The High Court held that the authority was justified in rejecting the application because the trust had not correctly disclosed its religious nature. The Court also held that there is no vested or absolute right to receive foreign contributions under the FCRA.
The Division Bench sustained the impugned order and dismissed the civil miscellaneous appeal without awarding costs.
Case Details:
Case Title: Kanzeon Public Charitable Trust v. Union of India
Case Number: CMA(MD) No. 1057 of 2026
Judges: Justice G.R. Swaminathan and Justice M.D. Sumathi
Decision Date: 6 October 202
