Delhi HC relief to human rights group, sets aside tax dept notice on NGO status

The Income Tax department had cited the NGO’s earlier FCRA cancellation by the Centre while issuing the notice. FCRA cancellation implies that the organisation cannot accept foreign contributions.

Notably, the NGO’s Foreign Contribution Regulation Act (FCRA) registration was cancelled twice by the Centre through the Ministry of Home Affairs (MHA). It was first cancelled in April 2022, which was then challenged by the NGO before the HC. The court had quashed the Centre’s order on the ground that it was not reasoned, directing it to reconsider the case.

Following reconsideration, the Centre cancelled the FCRA registration a second time through an order in September 2024. This is now under challenge before the HC, and is due to be heard next on September 14.

Pending the challenge, the Income Tax department on July 29 issued notice to CHRI under Section 12AB(4)(a), which deals with revocation of IT Act registration certificate granted in case of specified violations — that is, if the institution violates any other law.

The Commissioner of Income Tax (Exemption), Delhi, issued a hearing notice to CHRI under Section 12AB(4)(a) proposing cancellation of registration under Section 12A of the IT Act — its designation as a charitable organisation — on the ground that FCRA registration cancellation is a “specified violation” under Section 12AB(4)(f).

The notice had cited the two orders of FCRA cancellation by the MHA — 2022 and 2024.

Senior advocate Arvind Datar, appearing along with advocate Kabir Dixit on behalf of the NGO, in their challenge to the I-T department’s notice, pointed out that the only “specified violation” under Section 12AB(4)(a) relied on by the department was their cancellation of FCRA registration. They said this cannot be considered as a “specified violation” yet, as the FCRA registration cancellation is still under judicial scrutiny and has not attained finality.

It was further highlighted that such a notice proposing cancellation of their IT Act registration at this stage is premature and legally untenable.

Founded in 1987 as a public charity in the United Kingdom, CHRI was brought to India in 1993 by jurist and former Solicitor General of India, the late Soli Sorabjee. It shifted its headquarters to New Delhi.

The NGO was first granted FCRA registration in 1993 and a registration certificate under the IT Act in 1994. The IT registration certificate under 12A grants tax exemptions to charitable organisations, such as CHRI.

The organisation first ran into trouble with the government in 2021 when its certificate of registration under FCRA was suspended for six months on June 7, 2021, over five alleged violations.

The CHRI aims to promote access to justice, information and timely fulfilment of the UN’s Sustainable Development Goals. It has legal luminaries, former top police officers and environmental leaders comprising its executive committee. It is also recognised as a resource partner by several institutions of the central and state governments in domains of police and prison reforms, and transparency in governance.