Prospective cancellation of charitable registration under amended tax law cannot operate retrospectively without express statutory language.

An amendment empowering cancellation of charitable registration was held to operate prospectively only, absent express retrospective language. Applying the general rule that income-tax law is governed by the law in force for the relevant assessment year, the ITAT held that section 12AB(4) could not be used to cancel the assessee's registration for assessment years predating the Finance Act, 2022 amendment. It also noted that cancellation carries serious civil consequences and cannot reach back to earlier years unless the statute clearly so provides. The retrospective cancellation from AY 2015-16 onwards was therefore unsustainable and was set aside.

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Issues: Whether the cancellation of the assessee's charitable registration under section 12AB(4) of the Income-tax Act, 1961 could validly operate retrospectively from assessment year 2015-16 onwards.

Analysis: The impugned cancellation was founded on a reference made in the reassessment / set-aside proceedings and was challenged on the footing that the amended framework inserted by the Finance Act, 2022 could not be applied to earlier assessment years. The Tribunal held that, in income-tax matters, the law applicable is ordinarily the law in force in the relevant assessment year unless a contrary intention is shown. It further relied on the settled principle that an amendment conferring power to cancel registration, when it does not expressly provide retrospective operation, cannot be used to withdraw registration for earlier years. The Tribunal also noted that cancellation of charitable registration has serious civil consequences and that the amended provision permits cancellation only from the relevant previous year and subsequent years, not by reaching back to periods predating the amendment.

Conclusion: The retrospective cancellation from assessment year 2015-16 onwards was held to be unsustainable in law and was set aside.

Final Conclusion: The assessee's registration could not be cancelled for past years under the amended provision, and the impugned cancellation order was quashed.

Ratio Decidendi: In the absence of express retrospective language, an amendment authorising cancellation of charitable registration operates prospectively and cannot be invoked to cancel registration for assessment years prior to its commencement.

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