The Delhi High Court has stayed the Income Tax Department’s order cancelling the tax exemption status granted to non governmental organisations Oxfam India and Care India, Bar and Bench reported on Monday.

A bench of Justices Yashwant Varma and Purushaindra Kumar Kaurav, however, directed both organisations to only accept domestic contributions.

In September 2022, the Income Tax department had raided the offices of Oxfam India, along with the Centre for Policy Research and the Independent and Public Spirited Media Foundation, in Bengaluru. A year later in October, the department revoked its tax exemption status.

A tax exemption status can provide complete relief from taxes, reduced rates or tax on only a portion of the income.

On Monday, the High Court said that another division bench had granted interim relief to the Centre for Policy Research in August by staying the tax exemption cancellation order of the Income Tax department, reported The Indian Express.

The High Court also said the interim order passed in favour of the Centre for Policy Research will continue till February 27, when it will next hear the matter.

While the reason for revoking the status of Oxfam India has not been stated, Newslaundry reported in October, citing unidentified officials, that the department alleged the organisation was “involved in questioning the integrity of the government and discussing political issues in the meeting, which do not align with the objects of the assessee”.

The department had also alleged that Oxfam India had submitted to the United Nations Global Impact “to delist Adani Ports, which is not as per the objects of the assessee”, reported Newslaundry. The UN Global Impact is a non-binding pact to get businesses to adopt sustainable and socially responsible policies.

Oxfam India is a non-profit organisation under Section 8 of the Indian Companies Act, 2013. It has been working in the country since 1951. According to its website, it is engaged in knowledge building, public campaigning and disaster relief, among other activities.

Oxfam India was also among 5,932 non-government organisations whose registrations under the Foreign Contribution Regulation Act had ceased on January 1, 2022, either because they did not apply for renewal or the home ministry refused to sanction their renewal applications. Oxfam India is in the latter category.

FCRA registration is mandatory for any non-profit organisation in India to receive funds from abroad.

The non governmental organisation had moved the High Court against the pendency of its renewal application and the Centre was instructed in November 2022 to decide on its plea within six weeks. In December 2022, the home ministry rejected the application and refused to renew Oxfam India’s FCRA registration. Oxfam India continues to seek recourse in the High Court.

Earlier in January, the organisation had told the High Court in an affidavit that its “operations have virtually been forced to halt entirely” after the Union home ministry refused to renew its foreign funding licence.

It said that three out of seven development projects it was working on, as recently as December 2023, have had to be terminated due to a lack of funds. The others will be terminated soon.

Oxfam India is currently working with only 15 staff members, as against the 251 staffers it had in December 2021. By March, its strength will be down to four employees, the affidavit said.