Delhi HC Stays Income Tax Reassessment Against Oxfam India

A division bench comprising of Justice Rajiv Shakdher and Justice Girish Kathpalia issued the interim order on August 4, 2023, and notified the IT department about Oxfam’s plea challenging the income tax proceedings.

“A counter-affidavit shall be submitted within the next six (6) weeks. A rejoinder, if any, should be filed at least five days prior to the upcoming hearing date. Meanwhile, the reassessment proceeding shall remain on hold until further directives from the court,” the order stated.

The IT proceedings against Oxfam were initiated following a survey at their office on September 7, 2022. Oxfam received a notice under Section 148A(b) of the IT Act on March 29, 2023. The notice alleged that Oxfam had engaged in litigation activities that violated Section 8(1) of the Foreign Contribution (Regulation) Act (FCRA) and had received contributions from foreign nationals.

Additionally, it was claimed that Oxfam did not account for over ₹15 crores as revenue, which was reportedly received as an advance against future projects. The authorities also asserted that the NGO had not allocated 85% of its total receipts for its designated objectives within the relevant period, as required by IT Act provisions applicable to charitable or non-profit organizations.

Subsequently, an order was issued on April 19 under Section 148A(d), accompanied by a consequential notice under Section 148 on the same day. Oxfam contended that the reassessment proceedings pertained to the assessment year 2016-17, thereby falling under the limitation period.

Oxfam further argued that it had not been provided with the IT department’s survey report and that the amendment introduced in Section 149(1)(b) of the Income Tax Act through the Finance Act, 2022, would not apply to them. This is because the mentioned amendment would only be effective from the year 2022-23.

After evaluating the arguments presented by both parties, the High Court deemed the matter necessitated further examination. The case is scheduled for its next hearing on November 22, 2023.