Prospective operation of charitable registration cancellation provisions bars retrospective withdrawal for pre-01.04.2022 alleged violations.

Section 12AB(4), which introduces cancellation of charitable registration for specified violation, operates prospectively from 01.04.2022 and cannot be applied to alleged defaults relating to earlier years absent express legislative authority. The cancellation order also relied on section 12AA despite that provision no longer governing the relevant regime. On the stated facts, alleged valuation discrepancies, accounting issues, donor details, and foreign receipt concerns were not shown to establish misapplication of funds, non-genuine activities, or false information in the registration application. The cancellation was therefore unsustainable and the registration was restored.

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Issues: Whether cancellation of charitable registration under section 12AB(4) could be sustained for alleged violations pertaining to periods prior to 01.04.2022, and whether the alleged specified violations on merits justified withdrawal of registration.

Analysis: The statutory regime of section 12AB(4) introducing cancellation on account of "specified violation" came into force with effect from 01.04.2022. In the absence of an express legislative mandate, the provision could not be applied to alleged defaults relating to earlier assessment years. The principle that a provision imposing a new burden operates prospectively, unless the statute clearly provides otherwise, governed the matter. The cancellation order also rested on section 12AA even though that provision had ceased to operate in the relevant regime. On merits, the alleged discrepancies in valuation, maintenance of accounts, donor details, and foreign receipts in the hands of individuals were not shown to establish misapplication of the society's funds, non-genuine activities, or false information in the registration application.

Conclusion: The invocation of section 12AB(4) for pre-01.04.2022 periods was invalid, and the alleged specified violations were not made out. Cancellation of registration was not sustainable.

Final Conclusion: The assessee succeeded, the cancellation of registration was set aside, and the registration stood restored.

Ratio Decidendi: Section 12AB(4), being a provision creating a new cancellation regime on account of specified violation, applies prospectively from its effective date and cannot be used to cancel registration retrospectively for earlier years in the absence of express statutory authority.

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