Delhi High Court stays IT department order cancelling tax exemption to Centre for Policy Research

In a major relief for the prominent public policy think tank Centre for Policy Research (CPR), the Delhi High Court on Friday stayed the Income Tax department’s order cancelling its tax exemption status. .A division bench of Justices Rajiv Shakdher and Girish Kathpalia stayed the order dated June 30, 2023 noting that cancellation of CPR’s registration will entail severe consequences as it will not be able to accept any contributions from domestic donors.The Court said that the CPR is an organisation that survives on contributions and therefore, its inability to accept donations may delay its programmes which are in the pipeline.“Thus, having an overall view of the matter, we are of the opinion that the petitioner has made out a prima facie case for stay of the order and examination of the matter further by the Court. Accordingly, issue notice. Notice is accepted by the respondent revenue. Counter affidavit to be filed in six weeks, rejoinder in five days. In the meanwhile, the operation of the impugned order shall remain stayed,” the Court ordered..It directed CPR to maintain proper accounts of the contributions received and the details of the contributors.They should also give the details of the mode and way contributions were received and spent, the Court said. The details will have to be placed before the Court in the form of an affidavit, the bench added.Furthermore, petitioner will ensure that the contributions received are spent in a manner that they are aligned to the objects for which was constituted, the Court directed.It further said that in case of violation, the IT department shall be free to bring the same to the notice of the Court.The matter will be considered next on November 30. .CPR has been involved in research with a focus on India’s 21st-century challenges since the year 1973.It is headed by political scientist and former principal of Lady Shri Ram College, Meenakshi Gopinath. Yamini Aiyar is the think tank’s President and Chief Executive. The other members on its governing board include former foreign secretary Shyam Saran and Senior Advocate Shyam Divan..The IT department surveyed the offices of CPR as well as Oxfam India and Independent and Public Spirited Media Foundation in September last year. Following the survey, notices were issued to CPR and other NGOs. Subsequently, reassessment proceedings also started against CPR. However, the same was stayed by the High Court in an order passed on May 24, 2023.CPR’s Foreign Contribution Regulation Act (FCRA) application was suspended by the Central government in February 2023..On June 30, 2023 its IT exemption licence was cancelled. According to reports, the department noted that the think tank was involved in non-charitable works which violated the tax exemption norms.It was alleged that CPR was involved in the Hasdeo movement against coal mining in the Chhattisgarh forests and it used some of the funds received for filing litigations and complaints rather than for research..Senior Advocate Arvind P Datar along with Advocate Sachit Jolly appeared for the Centre for Policy Research.The Income Tax department was represented by Additional Solicitor General (ASG) Balbir Singh..Delhi High Court stays income tax proceedings against Centre for Policy Research