The Delhi High Court has intervened by imposing a temporary halt on the ongoing Income Tax (IT) reassessment proceedings initiated against the renowned non-profit organization, Oxfam India.
This legal development transpired on August 4, 2023, as a division bench comprising Justices Rajiv Shakdher and Girish Kathpalia issued an interim order. The court also directed the Income Tax department to respond to Oxfam's plea challenging the income tax proceedings.
The court's order specified a timeline, stipulating the filing of a counter-affidavit within the next six weeks. Additionally, any rejoinder would need to be submitted at least five days before the forthcoming hearing date. In the meantime, the court granted a stay on the continuation of the reassessment proceedings until further directions are issued.
The circumstances leading to this legal intervention originated from a survey conducted at Oxfam's office on September 7, 2022, which subsequently led to a notice being issued to the organization on March 29, 2023, under Section 148A(b) of the IT Act.
The notice accused Oxfam of engaging in litigation activities that purportedly violated Section 8(1) of the Foreign Contribution (Regulation) Act (FCRA) and of receiving contributions from foreign nationals. Furthermore, it alleged that Oxfam failed to account for over ₹15 crores as revenue, which reportedly constituted an advance against future projects.
Authorities also contended that Oxfam did not allocate 85% of its total receipts towards its intended objectives within the relevant period, as required by the IT Act's provisions applicable to charitable or non-profit organizations. As a result, an order was issued on April 19 under Section 148A(d), followed by a consequential notice under Section 148 on the same day.
However, Oxfam countered these allegations by asserting that the reassessment pertained to the assessment year 2016-17, asserting that it should be barred by limitations. The organization also claimed that the IT department had not shared the survey report, and it further argued that the amendment introduced in Section 149(1)(b) of the Income Tax Act through the Finance Act, 2022, should not be applicable to them, given that it applies only from the fiscal year 2022-23.
After careful consideration of the arguments presented, the High Court determined that the case required further examination. The next hearing is scheduled for November 22, 2023.
Oxfam was represented by a legal team led by Senior Advocate Arvind P Datar, alongside advocates Sachit Jolly, Disha Jham, and Soumya Singh. The Income Tax department was represented by Senior Standing Counsel Vipul Agrawal, as well as standing counsel Gibran Naushad and Sakshi Shairwal.
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TAGS: Delhi High Court Income Tax reassessment Oxfam India stay order non-profit organization IT proceedings Foreign Contribution (Regulation) Act (FCRA) litigation activities revenue recognition charitable organizations assessment year 2016-17 amendment Finance Act 2022 legal intervention hearing Senior Advocate Arvind P Datar Senior Standing Counsel Vipul Agrawal.
