Prospective operation of registration cancellation amendment bars retrospective withdrawal for an earlier assessment year.

Amendments to section 12AB(4)(ii) could not be applied retrospectively to cancel charitable registration for assessment year 2021-22. For that year, the applicable law was the unamended provision, which permitted cancellation only if the trust's activities were not genuine or were not carried out in accordance with its objects. As the amended grounds and expanded cancellation power came into force only from 01.04.2022, and no express retrospective effect was provided, the cancellation order was based on an inapplicable statutory regime and was unsustainable. The registration cancellation was therefore set aside.

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Issues: Whether registration under section 12AB(4)(ii) of the Income-tax Act, 1961 could be cancelled retrospectively for assessment year 2021-22 on the basis of the amended provisions introduced from 01.04.2022.

Analysis: The relevant law for income-tax proceedings is the law in force in the assessment year unless the statute expressly or by necessary implication provides otherwise. For assessment year 2021-22, the unamended section 12AB(4) governed cancellation of registration only where the activities of the trust or institution were found to be not genuine or not carried out in accordance with its objects. The amended section 12AB(4)(ii), which introduced specified violations and empowered cancellation for the relevant previous year and subsequent years, came into force only from 01.04.2022. In the absence of express retrospective language, the amended provision could not be used to withdraw registration for an earlier assessment year. The impugned order was therefore founded on an inapplicable statutory regime.

Conclusion: The cancellation of registration for previous year 2020-21 relevant to assessment year 2021-22 under section 12AB(4)(ii) was invalid and unsustainable.

Final Conclusion: The assessee's registration cancellation was set aside, and the appeal succeeded.

Ratio Decidendi: In income-tax matters, an amendment affecting cancellation of registration operates prospectively unless the legislature clearly provides retrospective effect, and the cancellation power must be exercised only under the law applicable to the relevant assessment year.

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