LI Network
Published on: 12 August 2023 at 16:59 IST
The Delhi High Court recently issued a temporary stay to the ongoing Income Tax (IT) reassessment proceedings targeting the non-profit organization Oxfam India.
The court’s decision comes in response to a petition filed by Oxfam, challenging the legitimacy of the income tax proceedings.
Justices Rajiv Shakdher and Girish Kathpalia presided over the division bench that issued the interim order on August 4, 2023. The IT department has been issued notice to respond to Oxfam’s plea.
The court’s order stipulates that a counter-affidavit must be submitted within the upcoming six weeks, and any rejoinder will be expected five days before the next hearing.
The ongoing reassessment proceedings have been stayed until further directions are provided by the court.
The IT proceedings against Oxfam were initiated subsequent to a survey conducted at the organization’s office on September 7, 2022.
The IT authorities claimed that Oxfam had breached the Foreign Contribution (Regulation) Act (FCRA) by engaging in litigation activities and accepting funds from foreign nationals.
Moreover, the authorities contended that Oxfam did not appropriately allocate over ₹15 crores as revenue and had not met the required 85% expenditure toward its objectives within the relevant period, as stipulated by the IT Act for charitable or non-profit entities.
Oxfam challenged these allegations, asserting that the reassessment proceedings pertained to the assessment year 2016-17, rendering them time-barred.
The organization also highlighted that it had not been provided with the survey report prepared by the IT department.
Oxfam pointed out that the amendment introduced in Section 149(1)(b) of the Income Tax Act, as part of the Finance Act, 2022, would not be applicable to them, as it only applies from the fiscal year 2022-23.
After a thorough examination of the contrasting arguments, the Delhi High Court determined that the matter warranted further investigation.