Cancellation Not Permissible for Mistakes
Section 12AB(4) of the Income-tax Act provides that when the registration or provisional registration of a trust or institution has been granted, the Principal Commissioner of Income Tax (PCIT) or Commissioner of Income Tax (CIT) can cancel the registration if they notice specified violations occurring during any previous year. According to the Explanation to Section 12AB(4), “specified violation” includes, among other things, cases where the application referred to in Section 12A(1)(ac) is incomplete or contains false or incorrect information. The proposed amendments to Section 12A will ensure that incomplete applications are no longer treated as violations, simplifying and streamlining the registration process.