Delhi High Court - Orders
William J Clinton Foundation vs Deputy Commissioner Of Income Tax on 12 September, 2022
Author: Manmohan
Bench: Manmohan, Manmeet Pritam Singh Arora
$~S-36
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) 13189/2022 & CM APPL.39932/2022
WILLIAM J CLINTON FOUNDATION ..... Petitioner
Through: Mr.Kavin Gulati, Sr.Advocate with
Mr.Amit Dhingra, Mr.Rohit Mahajan
and Mr.Rony John, Advocates.
versus
DEPUTY COMMISSIONER OF INCOME TAX ..... Respondent
Through: Mr.A.Renganath, Advocate with
Mr.Ajit Sharma, Sr.Standing Counsel.
CORAM:
HON'BLE MR. JUSTICE MANMOHAN
HON'BLE MS. JUSTICE MANMEET PRITAM SINGH ARORA
ORDER
% 12.09.2022 CM APPL.39933/2022 (exemption) Allowed, subject to all just exceptions.
Accordingly, the application stands disposed of. W.P.(C) 13189/2022 & CM APPL.39932/2022 Present writ petition has been filed challenging the order passed under Section 148A(d) and the notice issued under Section 148 of the Income Tax Act, 1961 ('the Act') both dated 30th July, 2022 issued for the assessment year 2015-16.
Learned senior counsel for the Petitioner states that the reassessment has been initiated on the ground that the Petitioner has received contribution Signature Not Verified Digitally Signed By:JASWANT SINGH RAWAT Signing Date:13.09.2022 18:00:58 of Rs.35,42,98,174/- for the purpose of 'Education' but most of the amount from the said contribution was spent on medical relief. He states that on this basis, it was held that the expenditure amounting to Rs.30,40,96,133/- claimed by the Petitioner should be disallowed and added back to the income of the Petitioner.
Learned senior counsel for the petitioner submits that this disallowance has no legal basis as Section 2(15) of the Act defines charitable purpose to include medical relief.
Learned senior counsel for the petitioner also states that in its application for registration dated 30th June, 2011 under the FCRA, the petitioner set out its main activities as "To promote high quality medical care and treatment to people living with HIV AIDS". He emphasises that the petitioner's main object/activity does not fall within the prohibited activities stipulated under Section 3 of the FCRA.
He further states that the books of accounts of the Petitioner were considered during the scrutiny assessment and the utilisation of contributions towards medical relief was accepted by the Assessing Officer. He submits that the reassessment is based only on a change of opinion since it is not the Assessing Officer's case that any new document or information was discovered after the scrutiny assessment was concluded in 2017.
He also submits that the Assessing Officer is required to apply his mind and "decide" whether it is a fit case to issue a notice under Section 148 of the Act. According to him, the impugned order is a complete abdication of the decision-making process, inasmuch as, it is based on borrowed satisfaction i.e. satisfaction of the Director General of Audit.
Signature Not Verified Digitally Signed By:JASWANT SINGH RAWAT Signing Date:13.09.2022 18:00:58Issue notice. Mr.A.Renganath, Advocate on behalf of Mr.Ajit Sharma, learned counsel for the respondent-revenue, accepts notice. He prays for and is permitted to file a counter affidavit within four weeks. Rejoinder affidavit, if any, be filed before the next date of hearing.
List on 16th March, 2023.
Though, the Assessing Officer is permitted to pass the assessment order, yet it is directed that the same shall not be given effect to and shall be subject to further orders that may be passed by this Court.
MANMOHAN, J MANMEET PRITAM SINGH ARORA, J SEPTEMBER 12, 2022 TS Signature Not Verified Digitally Signed By:JASWANT SINGH RAWAT Signing Date:13.09.2022 18:00:58