Specified violation cannot be applied retrospectively; cancellation power operates prospectively from the amendment's effective date.

The note addresses two issues: whether the Principal Commissioner had jurisdiction to cancel registration despite a Board notification allocating territorial and subject-matter authority to a prescribed authority, and whether the amended statutory regime introducing "specified violations" (effective 01.04.2022) permits retrospective cancellations. It concludes that territorial jurisdiction under the Board notification remained with the prescribed authority and absent express reallocation the Principal Commissioner lacked jurisdiction, and that the specified-violation provisions operate prospectively so cannot be invoked to cancel registrations for periods before the amendment; consequential cancellation orders are quashed.

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Issues: (i) Whether the Principal Commissioner of Income Tax (PCIT) had jurisdiction to cancel registration under the amended statutory scheme (including power under Section 12AB(4) read with Rule 17A and related provisions) and/or whether the territorial jurisdiction vested in the prescribed authority by Notification No. 52/2014 precluded PCIT from passing the cancellation order; (ii) Whether registration granted under earlier provisions could be cancelled retrospectively by invoking the concept of "specified violation" introduced by amendment effective from 01.04.2022.

Issue (i): Whether the PCIT had jurisdiction to cancel registration under the statutory scheme and in light of the territorial allocation by CBDT Notification No. 52/2014.

Analysis: The decision examines the effect of the Board's territorial notification and the statutory allocation of powers to the authority designated for exemptions. It considers the scope of transfer orders under the statutory transfer provision and the explanation of "case" relied upon by the authority, the role of applications and references under the second proviso to Section 143(3), and whether the transfer of assessment proceedings operated to transfer the exclusive jurisdiction of the authority prescribed by the Notification for grant or cancellation of exemption. The analysis addresses whether existing notifications or subsequent circulars authorised exercise of cancellation powers by the PCIT in place of the prescribed CIT (Exemptions).

Conclusion: The PCIT did not have jurisdiction to pass the impugned cancellation order; the territorial and subject-matter authority to grant or cancel registration in the circumstances rested with the prescribed authority under the Board's notification. The impugned order is quashed for want of jurisdiction.

Issue (ii): Whether the concept of "specified violation" introduced by amendment effective from 01.04.2022 could be invoked to cancel registrations retrospectively for assessment years prior to the effective date.

Analysis: The decision considers the temporal operation of the statutory amendment introducing "specified violations" and the related procedural code, the scope and effect of Rule 17A and the explanatory circular clarifying the effective applicability of the new provisions. It examines whether show-cause notices and cancellation proceedings based on specified violations occurring prior to the amendment's effective date are legally sustainable and whether reference under the proviso to Section 143(3) was competent after completion of assessment proceedings.

Conclusion: The concept of "specified violation" and the power to cancel registration under the amended provision could not be applied retrospectively to periods before 01.04.2022; show-cause notices and the cancellation order founded on that retrospective application are erroneous and are quashed. Relief is granted to the assessee.

Final Conclusion: The impugned cancellation orders are quashed and the appeals are allowed; the statutory amendment introducing specified violations operates prospectively from its effective date and territorial jurisdiction under the Board's notification governs authority to grant or cancel registration.

Ratio Decidendi: In the absence of express Board authorization or notification extending the exercise of cancellation powers to the PCIT, territorial jurisdiction conferred by the Board's notification and the prospective operation of the statutory amendment (effective 01.04.2022) preclude retrospective cancellation by the PCIT; consequently cancellation orders premised on jurisdictional transfer or retrospective application of specified-violation provisions are invalid.

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