The Canadian government auditors have alleged that ISNA-Canada “failed to conduct any meaningful due diligence” when it transferred $1,36,000 to India's Kashmir region where groups like Hizbul Mujahideen have been in an armed conflict with the Indian forces. The CRA said that the Islamic charity has acted as a ‘conduit’ for many organisations which supports terrorist activities in other countries. “It is the CRA’s view that the society’s resources may have, directly or indirectly, been used to support the political efforts of Jamaat-e-Islami and/or its armed wing Hizbul Mujahideen,” CRA has stated, according to an India Today report .

Canadian Revenue Agency (CRA) has suspended the Islamic Society of North America-Canada (ISNA- Canada) for funding groups allegedly linked to terrorist organisations like the Hizbul Mujahideen. The CRA has banned the Mississauga-based Islamic charity organisation for a year starting from 12 September and has also ordered it to pay a fine of $5,50,000.

According to Sputnik International, CRA audit documents reportedly allege that ISNA-Canada donated $90,000 to the Relief Organization for Kashmiri Muslims (ROKM) between 2007 and 2009 and funded an additional $46,000 to the Kashmiri Relief Fund of Canada, which had previously raised funds for the ROKM.

"Our research indicates that ROKM is the charitable arm of Jamaat-e-Islami, a political organisation that actively contests the legitimacy of India's governance over the state of Jammu and Kashmir, including reportedly through the activities of its armed wing Hizbul Mujahideen," the CRA said. The audit was conducted in 2011 and covered the period from 2007 to 2009. The results were conveyed to ISNA-Canada in 2014 but the CRA only sanctioned the charity on 5 September 2018.

"Providing resources to organisations operating in support of a political purpose, including the achievement of nationhood or political autonomy, are not recognised at law as charitable," the CRA said.

By acting as a "conduit" for other organisations, ISNA-Canada "may have, knowingly or unknowingly, provided the benefits of its status as a registered charity to support the efforts of a political party and its armed wing”, CRA said.

However, according to a Hindustan Times' report, the Charities Directorate has not revoked ISNA-Canada’s charity status but the group was required to enter a compliance agreement whereby it must “cease its overseas operations”.

According to a Global News article, ISNA Islamic Services of Canada was stripped of its charitable status for “non-compliance,” according to records obtained by Global News. Authorities also revoked a related charity, the Canadian Islamic Trust Foundation. Both are former affiliates of the Islamic Society of North America-Canada (ISNA-Canada), and shared its Mississauga, Ontario, address.

However, the ISNA-Canada has denied all the allegations levelled against it by the CRA. “We are saddened by this outcome," ISNA-Canada said in a written statement, another Global News article said.

According to the report, ISNA- Canada has also denied any links to terrorism and has said that it has in fact made "progressive and important changes” to its governance and in "how it operates as one of the largest Muslim organisations in Canada".

“We remain politically impartial and are not in any way linked to any political or extremist group,” said the organisation, adding, “We will continue our operations and remain committed to always striving to be the best possible organisation we can be in service to Canadians."

According to the Global News report, in a letter addressed to community members, ISNA-Canada chair Katherine Bullock said: "We have spent the last decade rectifying these mistakes and reforming our organisation to ensure that we have a robust governance structure in place so that the mistakes made are not repeated."