HYDERABAD SCIENCE SOCIETY,HYDERABAD vs. DCIT., EXEMPTION CIRCLE 1(1), HYDERABAD

आयकर अपीलȣय अͬधकरण, हैदराबाद पीठ
IN THE INCOME TAX APPELLATE TRIBUNAL
Hyderabad ‘B’ Bench, Hyderabad

BEFORE SHRI VIJAY PAL RAO, VICE PRESIDENT
AND SHRI MANJUNATHA G. ACCOUNTANT MEMBER

आ.अपी.सं /ITA No.1128/Hyd/2024
Assessment Year 2015-2016

Hyderabad Science
Society, Hyderabad.
PIN - 500 028. Telangana.
Exemption Circle-1(1),
Hyderabad.
(Appellant)

(Respondent)

For Assessee : Sri P Murali Mohan Rao, CA
For Revenue : Dr. Narendra Kumar Naik, CIT-DR

Date of Hearing : 12.02.2026
Date of Pronouncement : 11.03.2026

आदेश/ORDER

PER VIJAY PAL RAO, VICE PRESIDENT :

This appeal by the Assessee is directed against the Order dated 30.09.2024 of the learned Commissioner of Income Tax (Exemption), Hyderabad, passed u/sec.12AB(4) of the Income Tax Act [in short "the Act"], 1961 whereby the 2
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registration of the assessee society granted u/sec.12A of the Act was cancelled.
2. The assessee has raised the following grounds of appeal:
1. “The Ld. CIT(E) has grossly erred, both on facts and in law, in passing the Order u/s 12AB(4) of the Act, dt. 30.09.2024. 2. The Ld. CIT(E) has erred in cancelling the registration granted u/s 12A of the Act without considering the facts of the case which is prejudicial to the interests of the appellant.
3. The Ld. CIT(E) erroneously taken up for re-determining the issue of registration u/s 12AA, giving a bye-pass to the superior judicial authority's decision i.e, the Hon'ble ITAT dt.
07.09.2021 in the present case only, on the same issue for the impugned asst. year, which is legally bad in law.
3.1. The L.d. CIT(E) ought to have appreciated the fact that the question of the registration u/s 12A to the appellant had already been decided by the Hon'ble ITAT vide order no. 361/Hyd/2019
dt. 07.09.2021 cancelling the CIT(E) order u/s 12A of the Act.
3.2
The Ld. CIT(E) ought to have appreciated the judicial discipline that, when a higher judicial authority gives a legal decision on an appeal, the lower judicial authority has to faithfully and judiciously follow and do the consequential action, even if the decision of the higher authority is unacceptable and that not following the above decision is contemptuous.
3.3
The very revisiting of the issue again by the CIT(E) when the ITAT order is still in force, especially when the AO had passed consequential order too, is not as per law.

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nor was there any transfer of assets to other taxable entity, no conversion of the trust as commercial entity.
11. The appellant may add or alter or amend or modify or substitute or delete and/or rescind all or any of the grounds of appeal at any time before or at the time of hearing of the appeal.”

the Tribunal and consequential order was also passed by the learned CIT(E) on 08.06.2022, this Tribunal vide Order dated
26.10.2022 set aside the Order of the learned CIT(A) and remanded the matter to the Assessing Officer for fresh adjudication in the light of the restoration of the registration.
In the set aside proceedings, the Assessing Officer again made a reference for cancellation of the registration to the learned CIT(E) and consequently, the learned CIT(E) has passed the impugned order whereby the registration of the assessee has been again cancelled with effect from the assessment year 2015-2016 onwards. Aggrieved by the impugned order, the assessee has filed the present appeal.
4. Before the Tribunal, the learned Authorised
Representative of the Assessee has submitted that the impugned order passed by the learned CIT(E) as per the reference made by the Assessing Officer is not sustainable in law when the Tribunal has already quashed the earlier Order of learned CIT(E) based on the identical reference made by the Assessing Officer. The learned Authorised Representative of the Assessee has submitted that the 2nd proviso to 7
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sec.143(3) has been introduced by the Finance Act, 2022
w.e.f. 01.04.2022 and therefore, the reference made by the Assessing Officer as per the 2nd proviso to sec.143(3) of the Act cannot be the basis for cancellation of registration with retrospective effect and particularly, with effect from the assessment year 2015-2016 as this amendment is not retrospective but it is prospective. The procedure adopted by the Assessing Officer as well as the learned CIT(E) u/sec.12AB(4) of the Act does not confer the power to the learned CIT(E) to withdraw or cancel the registration with retrospective effect and specifically prior to the said amendment brought into the statute. He has referred to the following decisions:
i.
Judgment of Hon’ble Delhi High Court in the case of Centre for Policy Research vs. Pr. CIT (Central)
[2024] 461 ITR 540 (Del.); ii.
(Central) [2024] 204 ITD 605 (Bangalore-Tribu.);

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[2024] 160 taxmann.com 217 (Bangalore-Tribu.); iv.
[2024] 166 taxmann.com 324 (Delhi-Tribu.); v.
[2024] 208 ITD 120 (Cuttack – Tribu.); vi.
[2024]
162
taxmann.com 673 (Cuttack-Tribu.); vii.
(Central) [2024] 206 ITD 601 (Bangalore-Tribu.);
4.1. The learned Authorised Representative of the Assessee has further submitted that even the Assessing
Officer has not completed the assessment after the set aside of the matter by this Tribunal vide Order dated 26.10.2022
and therefore, the said assessment completed by the 9
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Assessing Officer on 12.12.2024 is barred by limitation provided u/sec.153 of the Act. Thus, the reference made by the Assessing Officer in the assessment proceedings is invalid being barred by limitation and cannot be a basis for cancellation of the registration as per provisions of sec.12AB(4) of the Act. Thus, the learned Authorised
Representative of the Assessee has submitted that the show cause notice issued by the learned CIT(E) u/sec.12AB(4) r.w.s.12AB(5) of the Act for cancellation of the registration is not valid. He has further contended that the learned CIT(E) has proceeded to issue the show cause notice as well as passed the impugned order which is against the judicial discipline when this Tribunal has already quashed the earlier order of the learned CIT(E) and the department has already filed an appeal before the Hon’ble High Court which is pending adjudication.
Thus, the learned
Authorised
Representative of the Assessee has submitted that the learned CIT(E) could have waited for the outcome of the appeal filed by the department before the Hon’ble High Court and cannot cancel the registration on the same basis without

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any new development or new facts. He has pointed out that the Assessing
Officer was supposed the pass the consequential order u/sec.143(3) r.w.s.254 of the Income Tax
Act, 1961 on or before 31.03.2024. However, the Assessing
Officer passed the consequential order only on 12.12.2024
which is barred by limitation and therefore, when the assessment order itself is invalid, then, the reference made by the Assessing Officer and consequential Order passed by the learned CIT(E) also not sustainable in law and liable to be quashed. In support of his contention, he has relied upon the following Judgments:
i.
Judgment of Hon’ble Delhi High Court in the case of Aircom International India (P) Ltd., [2024] 159
taxmann.com 148 (Delhi.); ii.
Judgment of Hon’ble Karnataka High Court in the case of DCIT vs. Biesse India (P) Ltd., [2025] 178
taxmann.com 282 (Karnataka) (HC); iii.
ITA.No.1128/Hyd./2024

Circle-10(1), New Delhi in ITA.No.3353/Del./2024
dated 03.09.2025; iv.
Judgment of Hon’ble Karnataka High Court in the case of Wipro Ltd., vs. JCIT, Special Range-7,
Bangalore [2021] 438 ITR 581 (Karnataka);
4.2. The learned Authorised Representative of the Assessee submitted that the Hon’ble High Courts as well as this Tribunal has held that the limitation for passing the consequential order is provided u/sec.153 of the Act and therefore, the Order passed by the Assessing Officer beyond the limitation period is barred by limitation and hence, the same is invalid and nullity.
5. On the other hand, the learned DR has submitted that the learned CIT(E) has initiated the proceedings for cancellation of the registration as per the reference/proposal sent by the Assessing Officer in terms of second proviso to sec.143(3) r.w.s.12AB(4) of the Act. Thus, the proceedings initiated by the learned CIT(E) are strictly as per the provisions of the Act and therefore, the impugned order passed by the learned CIT(E) is strictly in accordance with the 12
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provisions of the Act as well as based on the facts reported by the Assessing Officer and examined by the learned CIT(E) while passing the impugned order. The learned DR has pointed out that this Tribunal vide Order dated 07.09.2021
quashed the earlier Order of the learned CIT(E) dated
31.12.2018 on technical ground of invalid show cause notice u/sec.12AB(4) of the Act. He has pointed out that the Tribunal has noted that the show cause notice was not issued by the learned CIT(E) but it was issued by DCIT (Exemption).
Therefore, there is no bar for issuing fresh valid show cause notice by the learned CIT(E) for cancellation of the registration u/sec.12AB(4) of the Act. The learned DR has further submitted that sec.12AB(4) of the Act contemplates that after granting the registration if the Commissioner noticed occurrence of one or more specific violations during any previous year, the Commissioner after calling such documents or information or making such enquiry as he think necessary, has to satisfy himself about the occurrence or otherwise of any specific violation, pass an Order in writing cancelling the registration, after affording a reasonable

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opportunity of being heard to such trust or institution for such previous year and all subsequent previous year. Thus, the learned DR has submitted that the cancellation will be with effect from previous year in which the Commissioner found the occurrence or otherwise any specified violation committed by the trust or institution and hence, there is no bar for cancellation of registration for the assessment year prior to 2022. The Commissioner has recorded the specific violations of the assessee for diversion of the funds and involvement in non-genuine activities of providing commission based bogus donations as it was detected during a survey conducted in the case of M/s. Matriveni Institute of Experimental Research & Education. It was also found that another donation to Vichar Manch is also a Kolkata based and was involved in process of money laundering. The assessee has failed to explain the above violation of involvement of the assessee in allowing its bank account to transfer the fund in the guise of donation received and donation paid. He has relied upon the impugned order of the learned CIT(E) as well as the Judgment of Hon’ble Supreme

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Court in the case of ITO vs. Vikram Sujitkumar Bhatia in Civil Appeal No.911 of 2022 [SLIP (C) No.29096 of 2019]
dated 06.04.2023 and submitted that the Hon’ble Supreme
Court has observed that it is the duty of the Court while interpreting the machinery provisions of taxing statute to give effect to its manifest purpose. Wherever the intention to impose liability is clear, the Courts ought not be hesitant in espousing a commonsense interpretation to the machinery provisions so that the charge does not fail. Thus, the learned
DR has submitted that the provisions of sec.12AB(4) should be given a meaning so as to achieve its purpose and not to make it redundant.
6. We have considered the rival submissions as well as the relevant material on record. This case has a chequered history as multiple rounds of litigation has taken place regarding the cancellation of the registration and assessment. Earlier the learned CIT(E) vide Order dated
31.12.2018 cancelled the registration while passing the Order u/sec.12AA(3) r.w.s.12AA(4) of the Act. The said Order

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was quashed by this Tribunal vide Order dated 07.09.2021
in ITA.No.361/Hyd./2019 in Para nos.3 and 4 as under:
“3. We have given our thoughtful consideration to rival contentions against and in support of the correctness of the CIT(E)'s order under challenge cancelling the assessee's Section 12AA registration. We find no reason to express our agreement with the Revenue's arguments supporting the same. This is for the precise reason that the CIT(E) passed his impugned order in furtherance to the corresponding show cause notice dt.08-02-2018 (page Nos.20
to 22) which had in fact been issued by the DCIT(E) only. This latter authority has nowhere been vested any juri iction to issue such a show cause notice u/s.12AA of the Act. Case law CIT Vs. Modern
School Society (2020) [114 taxmann.com 587] (SC) holds that whilst affirming the corresponding hon'ble high court's judgment
(2018) [99 taxmann.com 379] (Raj) that any order passed under the provisions of the Act by an authority without having any juri iction is a non est action only.
4. Learned CIT-DR fails to dispute that the CIT(E) had not issued any other show cause notice proposing to finalise the impugned action. We therefore hold that the CIT(E)'s impugned order is not sustainable on law since based on an invalid show cause notice. Quashed accordingly.”

learned CIT(E). The Revenue has filed an appeal before the Hon’ble High Court against the said Order of the Tribunal which is pending adjudication. Pursuant to the said Order of the Tribunal dated 07.09.2021 the learned CIT(E) then restored the registration u/sec.12AA of the Act vide Order dated 08.06.2022. In the meantime, the Assessing Officer has passed the assessment order denying the exemption u/secs.11 and 12 of the Act to the assessee which was challenged before the learned CIT(A). However, the learned
CIT(A) has dismissed the appeal of the assessee vide Order dated 09.06.2022 on the basis of the reasons given by the Assessing Officer as well as learned CIT(E) for cancellation of the registration u/sec.12AA(3) of the Act. On further appeal against the Order of the learned CIT(A), this Tribunal vide
Order dated
26.10.2022
in ITA.Nos.268
&
269/Hyd./2022 for the assessment years 2015-2016 and 2016-2017 set aside the Order of the learned CIT(A) and remanded the matter to the record of the Assessing Officer with a direction to grant one more opportunity to assessee to substantiate its case and decide the issue as per facts and 17
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law. The relevant finding of the Tribunal in Para no.11 is as under:
“11. We find the Assessing Officer in the instant case denied exemption u/s 11 for the impugned A.Y and following this order he also rejected the claim of benefit u/s 11 of the I.T. Act. for the A.Y 2016-17. After the orders passed by the Assessing Officer for the A.Ys 2015-16 and 2016-17, the Pr.CIT cancelled the registration issued to the assessee u/s 12A of the I.T. Act. We find on appeal by the assessee, the Tribunal vide
ITA
No.361/Hyd/2019 dated 7.9.2021 restored the registration u/s 12AA of the I.T. Act and the CIT vide order dated 8.6.2022 has given the appeal effect and has granted registration u/s 12AA of the I.T. Act. Under these circumstances, we deem it proper to restore the issue to the file of the Assessing Officer with a direction to grant one more opportunity to the assessee to substantiate his case and decide the issue as per fact and law. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.”

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has been challenged by the assessee before the learned
CIT(A). Therefore, we refrain from expressing any view on the said point.
6.3. As regards the validity of the impugned order for cancellation of the registration with effect from the assessment year 2015-2016, we find force in the arguments of the learned Authorised Representative of the Assessee as fortified by various decisions of Hon’ble High court as well as this Tribunal. In the case of Amala Jyothi Vidya Kendra
Trust vs. PCIT (supra), the ITAT, Bangalore Bench has considered an identical issue and held in Para nos.6 to 8 as under:
“6. We have heard the rival submissions and perused the materials available on record. The main contention of the Id. A.R.
is that the Id. PCIT has cancelled the registration granted to the assessee w.e.f. the previous year Le. 2020-21 relevant to assessment year 2021-22 by applying the provisions as stood on 12-5-2023, which cannot be applied for the violations of the provisions of section 12AA or 12AB of the Act. According to the Id.
A.R., the Id. PCIT has cancelled the registration granted to the assessee since the Id. PCIT was satisfied that one or more specified violations have taken place. The specified violations are mentioned in explanation to section 12AB(4) of the Act as follows:

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Explanation: For the purposes of this sub-section, the following shall mean "specified violation",--
(a) Where any income derived from property held under trust, wholly or in part for charitable or religious purposes, has been applied, other than for the objects of the trust or institution; or (b) The trust or institution has income from profits and gains of business which is not incidental to the attainment of its objectives or separate books of account are not maintained by such trust or institution in respect of the business which is incidental to the attainment of its objectives; or (c) The trust or institution has applied any part of its income from the property held under a trust for private religious purposes, which does not ensure for the benefit of the public; or (d) The trust or institution established for charitable purpose created or established after the commencement of this Act, has applied any part of its income for the benefit of any particular religious community or caste; or (e) Any activity being carried out by the trust or institution-
(i) is not genuine, or (ii) is not being carried out in accordance with all or any of the conditions subject to which it was registered; or (f) The trust or institution has not complied with the requirement of any other law, as referred to in item (B) of sub-clause (i) of clause
(b) of sub-section (1), and the order, direction or decree, by whatever name called, holding that such non-compliance has occurred, has either not been disputed or has attained finality.

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(c) Such case has been selected in accordance with the risk management strategy, formulated by the Board from time to time, for any previous year;
The Principal Commissioner or Commissioner shall- i.
call for such documents or information from the trust or institution, or make such inquiry as he thinks necessary in order to satisfy himself about the occurrence or otherwise of any specified violation; ii.
pass an order in writing, cancelling the registration of such trust or institution, after affording a reasonable opportunity of being heard, for such previous year and all subsequent previous years, if he is satisfied that one or more specified violations have taken place; iii.
pass an order in writing, refusing to cancel the registration of such trust or institution, if he is not satisfied about the occurrence of one or more specified violations; iv.
forward a copy of the order under clause (ii) or clause (iii), as the case may be, to the Assessing Officer and such trust or institution.
Explanation: For the purposes of this sub-section, the following shall mean "specified violation",--
(a) Where any income derived from property held under trust, wholly or in part for charitable or religious purposes, has been applied, other than for the objects of the trust or institution; or (b) The trust or institution has income from profits and gains of business which is not incidental to the attainment of its objectives or separate books of account are not maintained by such trust or institution in respect of the business which is incidental to the attainment of its objectives or separate books

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of account are not maintained by such trust or institution in respect of the business which is incidental to the attainment of its objectives; or (c) The trust or institution has applied any part of its income from the property held under a trust for private religious purposes, which does not ensure for the benefit of the public; or (d) The trust or institution established for charitable purpose created or established after the commencement of this Act, has applied any part of its income for the benefit of any particular religious community or caste; or (e) Any activity being carried out by the trust or institution-
(i) is not genuine, or (ii) is not being carried out in accordance with all or any of the conditions subject to which it was registered; or (f) The trust or institution has not complied with the requirement of any other law, as referred to in item (B) of sub-clause (1) of clause (b) of sub-section (1), and the order, direction or decree, by whatever name called, holding that such non-compliance has occurred, has either not been disputed or has attained finality.
6.3. As per section 12AB(4) of the Act as applicable to assessment year 2021-22, the Id. PCIT if he is satisfied that activities of the Trust or institution are not genuine or not being carried out in accordance with the objects of the trust or institution, as the case may be, he shall pass an order in writing cancelling the registration of such trust or institution after affording reasonable opportunity of being heard. As per section 12AB(5) of the Act, when trust or institution complied wholly or in part of the income of such trust or institution in violation of section 13(1) of the Act or if they complied with any other law, for the time being in force by the trust or institution as are material for the purpose of 23
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achieving its objectives as mentioned in section 12AB(1)(b)(ii) (B) of the Act. However, in the present case, the Id. PCIT invoked the provisions of section 12AB(4)(a)(ii) of the Act as stood in the assessment year 2022-23. The objection of the Id. A.R. is that for the cancellation of registration for the assessment year 2021-22, he could not invoke the provisions of section 12AB(4)(ii) of the Act which is introduced by Finance Act, 2022 w.e.f. 1-4-2022 and applicable for the assessment year 2022-23 onwards.
6.4. In the case of Isthmian Steamship Lines reported in 20 ITR 572 (SC) wherein the Hon'ble Supreme Court held that "it is a cardinal principle of the tax law that law to be applied is that in force in the assessment year unless otherwise provided expressly or by necessary implication".
6.5. In the case of Karimtharuvi Tea Estate Ltd. v. State of Kerala [1964] 51 ITR 129 (SC) the same view was taken by the Hon'ble Supreme Court.
6.6. Further, the Hon'ble Supreme Court in the case of Shree Choudhary Transport Corpn. v. IΤΟ [2020] 118 taxmann.com
47/272 Taxman 472/426 ITR 289 wherein held as under:
17.4. It needs hardly any detailed discussion that in income-tax matters, the law to be applied is that in force in the assessment year in question, unless stated otherwise by express intendment or by necessary implication. As per section 4 of the Act of 1961, the charge of income-tax is with reference to any assessment year, at such rate or rates as provided in any central enactment for the purpose, in respect of the total income of the previous year of any person. The expression
"previous year" is defined in section 3 of the Act to mean "the financial year immediately preceding the assessment year";

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and the expression "assessment year" is defined in clause (9) of section 2 of the Act to mean "the period of twelve months commencing on the 1st day of April every year".
17.5. In the case of CIT v. Isthmian Steamship
Lines(1951) 20 ITR 572 (SC), a 3-judge Bench of this court exposited on the fundamental principle that "in income-tax matters the law to be applied is the law in force in the assessment year unless otherwise stated or implied." This decision and various other decisions were considered by the Constitution Bench of this court in the case of Karimtharuvi Tea
Estate Ltd. v. State of Kerala (1966) 60 ITR 262 (SC) and the principle were laid down in the following terms (at pages 264-
266 of 60 ITR):
"Now, it is well-settled that the Income-tax, as it stands amended on the first day of April of any financial year must apply to the assessments of that year. Any amendments in the Act which come into force after the first day of April of a financial year, would not apply to the assessment for that year, even if the assessment is actually made after the amendments come into force......
The High Court has, however, relied upon a decision of this court in CIT v. Isthmian Steamship Lines 3 where it was held as follows:
'It will be observed that we are here concerned with two datum lines: (1) the 1st of April, 1940, when the Act came into force, and (2) the 1st of April, 1939, which is the date mentioned in the amended proviso. The first question to be answered is whether these dates are to apply to the accounting year or the year of assessment. They must be 25
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held to apply to the assessment year, because in income- tax matters the law to be applied is the law in force in the assessment year unless otherwise stated or implied. The first datum line therefore, affected only the assessment year of 1940-41, because the amendment did not come into force till the 1st of April, 1940. That means that the old law applied to every assessment year up to and including the assessment year 1939-40. This decision is authority for the proposition that though the subject of the charge is the income of the previous year, the law to be applied is that in force in the assessment year, unless otherwise stated or implied. The facts of the said decision are different and distinguishable and the High
Court was clearly in error in applying that decision to the facts of the present case." (Emphasis Supplied)
17.6. We need not multiply on the case law on the subject as the principles aforesaid remain settled and unquestionable. Applying these principles to the case at hand, we are clearly of the view that the provision in question, having come into effect from April 1, 2005, would apply from and for the assessment year 2005-06 and would be applicable for the assessment in question. Putting it differently, the Legislature consciously made the said sub- clause (ia) of section 40(a) of the Act effective from April 1,
20056, meaning thereby that the same was to be applicable from and for the assessment year 2005-06; and neither there had been express intendment nor any implication that it would apply only from the financial year 2005-06. 26
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the primary ground nos.2, 3, 5 & 12 and order of Id. PCIT passed u/s 12AB(4)(ii) of the Act is quashed.
7. In view of our findings in ground Nos.2, 3, 5 & 12, the grounds of appeal in Ground Nos. 4,6,7,8,9,10,11,13 & 14 have become infructuous as the order of Id. PCIT itself has been quashed.
8. In the result, appeals of the assessee are allowed.”

Lakhmi Chand Charitable Society vs. PCIT (supra) has also considered an identical issue in Para nos.18 to 22 as under:
“18. Having regard to the judgment as relied upon by the Ld. A.R we are of the considered opinion that the reference made in terms of 2nd proviso of Section 143(3) of the Act to the PCIT to whom the AO was subordinate is not permissible rather it is the CIT(E) Delhi, having territorial juri iction specified in Column 4 of the Notification Nos. 52/2014 and 53/2014 both dated
22.10.s2014 from whom exemption inter/alia under Section 12A of the Act is being claimed is the appropriate authority. In fact by and under the said notification the CIT(Exemption) has been constituted separately for the purposes mentioned therein. In that view of the matter the order passed by the PCIT cancelling registration of the appellant society on the reference made by the Assessing Officer is found to be flawed and without juri iction.
19. Apart from that after considering the 2nd proviso of Section 143(3) of the Act, we find that the reference granted under Section 12AA of the Act is permissible to be made only during the pendency of the assessment proceeding. However, in the case in hand the assessment proceeding has already been concluded on 29.03.2022. In fact, the reference could be made only during the course of assessment proceedings so as to enable the Ld. AO to give effect of the order passed on reference in the Assessment
Order itself. More so, the said proviso has been inserted w.e.f
01.04.2022 in the statute to make reference to the PCIT by the AO under Section 12AA, 12AB of the Act. In that view of the matter application of a particular provision of law which was not in existence during the material point of time cannot be said to have been rightly invoked.

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(b) Final registration granted under section 12AA(1).
The erstwhile provision did not cover cases of provisional registration granted under section 12AB(1)(c). Now, the provisional registration granted for the first time can also be cancelled by the authorities.
8.3. As seen from the above, since the assessee has secured the registration u/s 12A of the Act dated 4.6.1992, which was effective till the date of 23.9.2021 and this registration granted u/s 12A cannot be cancelled u/s 12AB(4)(ii) of the Act for the previous year 2020-21 covering the assessment year 2021-22. On the other hand, he could cancel the registration from assessment year 2022-23
onwards u/s 12AB(4) (ii) of the Act. In our opinion, if there is any violation in the previous assessment year 2020-21
relating to the assessment year 2021-22, this cannot be reason to cancel the registration granted for the assessment year 2022-23 to 2026-27 as the assumption of juri iction u/s 12AB(4)(ii) of the Act is itself wrong on the reasons discussed herein above. The specific violation committed by the assessee in any of these assessment years is to be considered independently and not the violation committed in assessment year 2021-22 for cancelling the registration granted u/s 12AB of the Act for the assessment year 2022-
23 to 2026-27. As such, we make it clear that the Id. PCIT at liberty to pass the fresh order of cancellation independently u/s 12AB(4)(ii) of the Act for these assessment years le.
2022-23 to 2026-27, if so advised. Accordingly, we allow this ground taken by the assessee. Ordered accordingly."

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ordinate Bench of this Tribunal have held the issue in favour of the assessee. The second issue is in regard to donation to Aids
Awareness Trust of Orissa and the questioned the existence of the trust. The assessee has produced the assessment order in the case of said trust and the assessment order passed also refers to its registration by the Id CIT(A). Therefore, the second issue could fall to the ground on account of the act of the department itself in regard to the assessment and in regard to registration by the Id
CIT(E). It is also admitted by ld CIT(E) that there are no common trustees nor any related trustee between the assessee trust and Aids Awareness Trust of Orissa. In any case, both the issue had been raised by the Id CIT(E) in its original show cause notice which had been culminated in the orders served on the assessee. A new issue which has been raised by the Id CIT(E) in the show cause notice dated 6.10.2022 is the details of the corpus donation.
Admittedly, this was the subject matter of 263 proceedings and that the issue had been considered by the Hon'ble Juri ictional
High Court and the Hon'ble High Court had found the orders of Id
CIT to be un-sustainable and also quashed the same. Thus, all the issues on which the Id CIT(E) has raised the show cause notice for the purpose of cancellation of registration u/s.12A have already been decided by the Appellate Authority and same has also reached finality. The Id CIT(E) by his order dated 20.6.2023 being the impugned order has tried to unsettle issues which are already settled in the case of the assessee. This is not permissible. This being so, as it is noticed that all the issues on the basis of which, ld CIT(E) has cancelled the registration u/s.12A granted to the assessee has already been settled by various appellate authorities on earlier occasion and the issue had reached finality, same cannot be used for cancelling the registration of the assessee. This being so, on merits also, the order passed u/s.12AB(4) by the Id

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CIT(E) on 20.6.2023 cancelling the registration granted to the assessee stands quashed.
20. We are not going into the issue as to whether the registration can be cancelled retrospectively though we are of the view that retrospective cancellation w.e.f. 1.1.2014 is erroneous as we have already quashed the cancellation of registration.”

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provided to have a retrospective character or intend. Therefore, without a specific mention of the amended provisions to operate retrospectively, the cancellation cannot operate from a past date.
21. On the third question of the effective date of operation of the cancellation order, it was held that the cancellation will take effect only from the date of the order/notice of cancellation of registration. Since the act of cancellation of registration has serious civil consequences and the amended provision is held to have only a prospective effect the effect of cancellation, in' the event the pending tax appeal is decided in favour of the Revenue, will operate only from the date of the cancellation order, that is December 30, 2010. In other words, the exemption cannot be denied to the petitioner for and up to the assessment year 2010-
11 on the sole ground of cancellation of the certificate of registration. "
6.9. In this case, the Id. PCIT has cancelled the registration under the new provisions of the Act i.e. 12AB(4) (ii) of the Act, which specifically provides that cancellation can be done for such previous year and all subsequent previous years, which makes it clear that the cancellation cannot be retrospective, therefore, in view of the above discussion, we are of the opinion that cancellation of registration with retrospective effect is invalid in these cases. Since the Id. PCIT invoked the provisions of section 12AB(4)(ii) of the Act, which has been introduced by the Finance
Act, 2022 w.e.f. 1.4.2022 so as to cancel the registration with retrospective effect from assessment year 2018-19, which is bad in law.
6.10. It is noted that coordinate bench of this Tribunal in both assessee's case for AY 2021-22 has taken similar view and as quashed the retrospective applicability of the new amended provision u/s 12AB(4)(if) of the Act. We also note that same view

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has been taken by Coordinate bench of Mumbai in the case of Heart Foundation of India in ITA No.1524/Mum/2023 vide order dated 27.7.2023, wherein held that registration granted u/s 12A of the Act dated 21.7.1989 cannot be cancelled by Id. PCIT
(Central) vide order dated 6.3.2023 w.e.f. assessment year 2016-
17, by invoking the provisions of section 12AB(4)(ii) of the Act.
Accordingly, we allow the primary ground nos.2, 3, 5 & 12 and order of ld. PCIT passed u/s 12AB(4) (ii) of the Act is quashed.”

Order pronounced in the open Court on 11.03.2026. [MANJUNATHA G.]

[VIJAY PAL RAO]
ACCOUNTANT MEMBER
VICE PRESIDENT

Hyderabad, Dated 11th March, 2026. VBP

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Copy to :

VADREVU
PRASADA
RAO
Digitally signed by VADREVU
PRASADA RAO
Date: 2026.03.11
11:35:18 +05'30'