Registration cancellation of charitable trust for nongenuine activities and specified violations upheld; jurisdiction transfer validated.

Principal Commissioner's transfer of the assessee's PAN to Central jurisdiction under the transfer provision conveys all powers and proceedings, including registration cancellation, to the transferee; thus territorial/functional objection to jurisdiction was rejected. Cancellation powers existed from October 2004 and were amplified by the 2022 amendments to include specified violations, applicable prospectively to permit cancellation for earlier assessment years where nongenuine activities are found. The trust was found to divert funds to profitmaking entities and to publish biased/political content inconsistent with its charitable objects; registration under the charitable registration provisions was cancelled and the appeal dismissed.

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Issues: (i) Whether the Principal Commissioner of Income Tax (Central) had jurisdiction to cancel the assessee's registration under sections 12AA/12AB following transfer under section 127; (ii) Whether specified violations and non-genuine activities (including exerting influence to promote political articles, biased promotion/targeted coverage, support of polarised content, and payments to forprofit entities as professional fees) were established such that cancellation under section 12AB(4) was justified; (iii) Whether cancellation of registration could be given retrospective effect from previous year 2016-17.

Issue (i): Whether the Principal Commissioner of Income Tax (Central) had jurisdiction to cancel registration after transfer under section 127.

Analysis: The Tribunal examined section 127 and its Explanation, relevant CBDT notifications and authorities interpreting transfer of a 'case' and concluded that transfer within same city and notification framework vest jurisdiction over all proceedings pertaining to the PAN with the transferee authority; prior decisions distinguishing limited transfer were considered and distinguished.

Conclusion: The Principal Commissioner of Income Tax (Central) had jurisdiction to cancel the registration after transfer under section 127.

Issue (ii): Whether specified violations/nongenuine activities were proved (influence to promote political articles by differential payments; biased promotion/targeted coverage via communications; publication/support of polarised content; payments to forprofit entities lacking services).

Analysis: The Tribunal reviewed the impounded agreements, rate schedules, WhatsApp chats, grant/payment records and sampled published content relied upon by the Principal Commissioner. It found evidence of a rate schedule paying higher sums for specified topics (including politics), communications from the trust's CEO suggesting particular stories to grantees, instances of funding to entities publishing polarised content, and substantial payments to forprofit entities where service delivery or ownership of content in furtherance of the trust's objects was not shown. The assessee's explanations and affidavits were treated as insufficient to rebut the documentary material.

Conclusion: Specified violations and nongenuine activities were established; the findings support cancellation of registration under section 12AB(4) (against the assessee).

Issue (iii): Whether cancellation could be made effective retrospectively from previous year 2016-17.

Analysis: The Tribunal considered statutory history (power to cancel since 2004), case law on retrospective effect of cancellation, and CBDT guidance; it held that cancellation may take effect from the period when the breach occurred and that the statutory scheme and authorities permit cancellation effective from earlier previous years where violations are shown.

Conclusion: Cancellation with effect from previous year 2016-17 was permissible under the facts (against the assessee).

Final Conclusion: The Tribunal upheld the Principal Commissioner's order cancelling the assessee's registration under section 12AA/12AB effective from previous year 2016-17 to subsequent years, dismissing the assessee's appeal.

Ratio Decidendi: Where documentary evidence and contemporaneous communications demonstrate specified violations or nongenuine activities falling outside a trust's stated objects, the competent authority (having jurisdiction) may cancel registration under section 12AB(4) effective from the period when such breaches occurred.

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