Under the law the PCIT /CIT Is empowered to cancel registration if he is satisfied that the activities of the trust or the institution are not genuine or are not being carried out in accordance with the objects of the trust or institution, as the case may be.
In (2021] 436 ITR 483 (Mad) the registration for the vellore Institute of Technology was cancelled for the following violations :
(a) Capitation fee was collected by the assessee-trust.
(b) The funds of the trust at least to the tune of Rs. 22 crores have been misused by the trustees.
(c) The provisions of Tamil Nadu Educational Institutions (Pro hibition of Capitation Fee) Act, 1992 have been grossly violated.
(d) The provisions of section 11(2) of the Income-tax Act, 1961, have not been adhered to.
The lis in this case rested on jurisdiction where the question was whether the registration obtained at any time under section 12A is also amenable to section 12AA(3) of the Act.
Here is a case where the order of cancellation of 12A registration was issued on March 13, 2008 and it is only subsequently that an enabling amendment in the Finance Act, 2010 came into force with effect from June 1, 2010 in section 12AA (3) based on which it was argued that the jurisdiction was lacking on the earlier date.
The Court held that the insertion in the Finance Act, 2010 is only clarificatory in respect of the powers already existing under sub-section (3) to section 12AA of the Act.