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4. That the order of cancellation of Registration is bad in law and on facts as it has been passed solely and wholly relying on the order of assessment for AY 2014-15, which order was passed without considering the detailed submissions made by assessee including the reconciliation of the money received from students with those recorded in books of accounts (seized books of accounts in the form of Hard Discs which were not even looked into).

4.1 The Ld. Authorized Representative (AR) of the Assessee, Shri G.C. Srivastava, Advocate submitted that the impugned order was bad in law in as much as the order cancelling the Registration was passed by placing sole reliance on the original assessment order for AY 2014-15 which had been passed without considering the detailed submissions made by the assessee including the reconciliation of the money received from the students and without even considering the fact that the hard discs seized had not been opened and looked into. The Ld. AR also submitted that the impugned order cancelling the registration was based on complete non-application of mind in as much as the satisfaction of the Ld. PCIT (C) was based on the erroneous findings of the AO only and there was no independent appreciation of facts by the Ld. PCIT (C). It was further submitted that the subsequent assessment orders, had exonerated the assessee Trust from most of the allegations leveled against it in the original assessment orders and this fact was also to be duly considered in the present appeal. It was also submitted that the Act did not empower the Ld. PCIT (C) to cancel the registration with retrospective effect. He submitted that, thus, in effect, the assessee was challenging the impugned order on two counts namely: (i) the inherent lack of jurisdiction to cancel registration retrospectively and (ii) the collapse of the factual foundation on merits due to favourable subsequent assessment orders.

4.4 The Ld. AR further submitted that in order to appreciate the validity of the retrospective cancellation, it is imperative to take note of the legislative history of Section 12AA (3). It was argued that prior to 01.10.2004, there was no express provision in the Act empowering the Ld. Commissioner to cancel a registration once granted. This position was settled by the Hon'ble Supreme Court in Industrial Infrastructure Development Corporation (Gwalior) M.P. Ltd. v. CIT 403 ITR 1 (SC) wherein, the Hon'ble Supreme Court held that the power to grant registration is a quasi-judicial function, and that in terms the General Clauses Act, Section 21 does not confer an implied power to cancel such quasi-judicial orders. The express power to cancel was introduced only via the Finance (No. 2) Act, 2004, inserting Section 12AA (3) w.e.f. 01.10.2004. It was further submitted that the power to cancel a registration obtained under the old Section 12A (as was the case for many trusts registered prior to 1996) was introduced even later, by the Finance Act, 2010, w.e.f. 01.06.2010 whereas the assessee Trust was registered in 2006 and the Ld. Principal Commissioner has invoked Section 12AA(3) to cancel registration from 2007. The Ld. AR also referred to another judgment of Hon'ble Madras High Court in the case of Auro Lab v. ITO 411 ITR 308 (Mad) and submitted that the jurisprudence emerging from the Hon'ble High Courts, specifically the Hon'ble Jurisdictional High Court of Allahabad and the Hon'ble Madras High Court, uniformly holds that this power cannot be exercised retrospectively. The Ld. AR also submitted that the various judicial precedents being relied upon by the assessee have been filed in the form of Paper Book and prayed that the same may duly be considered while adjudicating the appeal. 4.5 The Ld. AR further submitted that the second prong of assessee's arguments was on the merits of the cancellation. It was submitted that the Ld. Principal Commissioner's order is founded entirely on the factual findings recorded by the Assessing Officer in the original assessment orders dated 31.03.2016 wherein it was alleged that the Trust was charging capitation fees, inflating IPD receipts to launder cash, and was allowing the trustees to divert funds. It was submitted that, however, these findings have been conclusively obliterated by the subsequent judicial and administrative proceedings. The fresh assessment order passed on 31.03.2023, pursuant to the Tribunal's directions, has accepted the genuineness of the Trust's activities and deleted the very additions that formed the basis of the PCIT's "satisfaction". The Ld. AR submitted that when the search took place on 31.07.2013, the Investigation Wing seized hard discs and laptops containing the Trust's digital books of account and patient records. The Assessee consistently maintained that these digital records contained a complete reconciliation of the receipts and that no unaccounted capitation fees existed. However, during the original assessment proceedings in 2016, the AO failed to open or examine these hard discs. It was submitted that the assessment was completed in great haste, with the Revenue providing copies of seized documents to the Assessee only months before the deadline, and the AO ignoring the partial reconciliations filed. It was submitted by the Ld. AR that upon appeal, the Tribunal, in its order dated 08.03.2021, took serious note of this lapse. The Tribunal set aside the original assessments specifically because the "Assessing Officer also did not take into account the data contained in the hard disks". The Tribunal thereafter remitted the matter for fresh assessment with a specific direction to consider the data in the hard disks and the Assessee's reconciliation. This judicial intervention effectively nullified the original assessment orders. Consequently, the Ld. PCIT's order, which was passed in January 2021 relying entirely on the findings recorded in the assessment order of 2016, was effectively nullified.

4.6 The Ld. AR stated that subsequently, in compliance with the Tribunal's order, the AO initiated a de novo assessment. The seized hard discs were finally opened on 30.06.2021, and the data was provided to the Assessee for reconciliation. The Assessee submitted a detailed, point-wise reconciliation of the alleged capitation fees and IPD receipts against the digital records and in the fresh assessment order dated 31.03.2023, the AO systematically reversed the adverse findings of the original assessment.