Delhi HC Stays Income Tax Proceedings Against Centre For Policy Research

The Delhi High Court has recently stayed the income tax proceedings initiated against the think tank Centre for Policy Research.

On May 24, a Division Bench of Justices Rajiv Shakdher and Girish Kathpalia passed the order after CPR moved a plea against the notices issued by the Income Tax department under Sections 148A(b) & 148 of the Income Tax Act.

The Court ordered, “According to us, the matter requires examination. Besides this, as noticed above, it is, at least, prima facie, evident to us that Section 149 of the Act, as amended, may not be applicable… In the meanwhile, there shall be a stay on the continuation of the reassessment proceedings, till further directions of the court.”

However, CPR has been involved in research with a focus on India’s 21st-century challenges since 1973.

It is headed by the political scientist and the former principal of Lady Shri Ram College, Meenakshi Gopinath. Yamini Aiyar is the think tank’s President & Chief Executive. The other members of its governing board include former foreign secretary Shyam Saran and Senior Advocate Shyam Divan.

Their Foreign Contribution Regulation Act application got suspended by the Central government in February 2023.

Therefore, the Court said that the tax reassessment relates to the assessment year 2016-17 and the proceedings began after a survey conducted by the IT authorities at the CPR premises in September last year.

Senior Advocate Arvind P Datar appeared the petitioner and contended that the authorities did not provide the whole survey report to the think tank, despite the fact that it is the ground for initiating the reassessment procedures. He said that this was a breach of natural justice norms.

Further, Datar contended that the amended Section 149 of the Act has been applied to the petitioner, although the transaction relates to the assessment year 2016-17.

However, the IT department stated that the information that emerged from the survey would be deemed to be considered as information, suggesting income chargeable to tax has escaped assessment.

After considering the case, the Bench noted that the entire survey report wasn’t submitted to the CPR and even the IT department conceded that only the relied-upon portion of the survey report was being provided to the petitioner.

Therefore, the Bench stated that the matter requires consideration and therefore, passed an interim order staying the proceedings. It also issued a notice to the IT department.
The case will be considered next on November 22.