SC refuses to entertain plea of environmental lawyer against HC verdict on I-T assessment

New Delhi, Aug 12 (PTI) The Supreme Court on Monday refused to entertain the plea of well-known environmental lawyer Ritwik Dutta against a Delhi High Court order dismissing his petition against reopening of his income tax assessment for the year 2020-21.

The Delhi High Court had on May 29, 2024 dismissed Dutta’s plea and upheld an order under section 148A(d) of the Income Tax (IT) Act. Under section 148 of the I-T Act, the Assessing Officer (AO) is empowered to reassess tax returns if income has been reported inaccurately.

Under section 148A of the I-T Act, if the IT officer has information that the taxpayer has undisclosed income for a specific assessment year, he must give the taxpayer a chance to provide an explanation before issuing a notice.

Solicitor General Tushar Mehta, appearing for the I-T department, said Dutta, an advocate, is the managing trustee of ‘Legal Initiative for Forest and Environment’ (LIFE), and on September 7, 2022, a survey action was undertaken by the I-T authorities under section 133A of the Act.

Section 133A of the I-T Act authorises the department officials to enter and inspect any premises if they have reasons to believe that documents, books, accounts or other material relevant to any proceeding under the Act may be found there. They can also seize any such documents if they find them during the inspection.

The I-T department said, on a perusal of the survey report and the impounded material, it was gathered that an amount of Rs 4.95 crore was received in assessment year 2020-21 by his organisation from M/s EarthJustice, USA.

“During the course of survey proceedings, it was observed that the assessee was earlier running a proprietorship concern in the name of M/s Lawyers Initiative for Forest & Environment (LIFE) in which he had received Rs 22 crores of professional receipts from one M/s EarthJustice, USA during the preceding five years,” the IT department said.

“This proprietorship was later converted into an LLP (Limited Liability Partnership).

“It was further found that funds made available by ‘Earth Justice’ are apparently being used for objects other than the approved objects of ‘LIFE’ for activities such as for litigation against coal power plants in India routed through the Petitioner/assessee who is the managing trustee of the Trust ‘LIFE’ in the garb of professional fee, for activities which cannot be considered to be professional service rendered by the assessee to ‘Earth Justice’,” the department said.

The solicitor general said in spite of the claim that the amount over Rs 4.95 crore was received as professional fee by Dutta, Earth Justice is not a party to any of the cases being represented by him.

The law officer said the assessing officer (AO) of the IT department issued an order on April 4, 2024 for reopening the assessment in the case of Dutta for 2020-21.

“All that the High Court has done in the impugned judgment is that it has refused to interfere with proceedings at this stage and has left it open for the assessee (Dutta) to raise all its contentions before the statutory authorities,” it said.

The top court refused to entertain the plea at this stage.

Earlier in April last year, the Central Bureau of Investigation (CBI) had registered an FIR against Dutta for alleged violations of the Foreign Contribution (Regulation) Act.

The action was taken in response to a complaint from the Union home ministry alleging that LIFE was receiving funds from the US-based EarthJustice to litigate against Indian coal projects with the intention of “targeting and stalling them”, a practice that the ministry deemed a “violation of FCRA”.

The criminal complaint was part of the CBI FIR naming Dutta, the winner of many awards including Sweden’s alternative to the Nobel Prize called the Right Livelihood Award for 2021 for his effort to protect the environment in India through the use of law.

The complaint alleged that LIFE had received money from Earth Justice USA, disguised as “professional receipts”, which were actually intended to fund the targeting and stalling of development projects.