Delhi High Court Stays IT Department's Order Cancelling Tax Exemption Status Of Oxfam India, Care India

The Delhi High Court has recently stayed the order passed by the Income Tax department cancelling the tax exemption status of two non-government organisations, Oxfam India and CARE India.

A division bench of Justice Yashwant Varma and Justice Purushaindra Kumar Kaurav passed the order identical to an interim order passed on August 25 last year in favour of leading public policy think tank, Centre for Policy Research and said that the two NGOs shall also be entitled to identical interim reliefs.

However, the bench clarified that the donations that may be accepted by Oxfam India and CARE India pursuant to the interim directions shall be confined to domestic contributions only.

The court also ordered that the interim order passed in favour of Centre for Policy Research will continue till February 27, the next date of hearing.

On August 25, 2023, a coordinate bench had stayed the Income Tax department's order cancelling CPR's tax exemption status, noting that the cancellation will entail severe consequences as the NGO will not be able to accept any contributions from domestic donors.

The bench was dealing with the pleas moved by the three NGOs challenging the cancellation of their tax exemption status by the IT department.

The court was informed by Senior Advocate Arvind P. Datar, appearing for the three NGOs, that a Special Leave Petition challenging the interim order passed in the NGOs favour was dismissed by the Supreme Court on January 05.

The counsel appearing for the IT department raised a preliminary objection to the maintainability of the writ petitions and contended that the impugned order is appealable in terms of Section 253(c) of the Income Tax Act, 1961 and the the appeal is liable to be tried by the Income Tax Appellate Tribunal.

The bench observed that the matter raises a substantial jurisdictional question and that there is a need to adopt a uniform and consistent approach regarding the interim orders.

“This since an identical challenge has been duly entertained by a coordinate Bench of this Court and interim protection accorded. The Court also bears in mind that pleadings in W.P.(C) 11270/2023 already stand completed and thus the issue can be decided finally on a short date,” the court said.

It added: “We consequently hold that the petitioners shall be entitled to interim reliefs in terms identical to those provided in paragraphs 17-19 of the aforenoted order of 25 August 2023 passed in W.P.(C) 11270/2023, subject to the clarification that the donations that may be accepted by the petitioners pursuant to the aforenoted interim directions shall be confined to domestic contributions only.”

Counsel for Petitioners: Mr.Arvind P.Datar, Sr.Adv with Mr.Sachit Jolly, Mr.Rishabh Malhotra, Ms.Disha Jham, Ms.Soumya Singh and Mr.Devansh Jain. Advs

Counsel for Respondents: Mr.Hossain, Sr.SC, Mr.Vipul Agrawal, Sr.SC with Mr.Sanjeev Menon, Jr.SC

Title: OXFAM INDIA v. PRINCIPAL COMMISSIONER OF INCOME TAX, (CENTRAL), DELHI-2 & ANR. and other connected matters

Citation: 2024 LiveLaw (Del) 79

Click Here To Read Order