The CBDT has issued Circular No. 21/2016 dated 27.05.2016 in which has clarified that it shall not be mandatory to cancel the registration already granted u/s 11 to a charitable institution merely on the ground that the cut-off specified in the proviso to section 2(15) of the Act is exceeded in a particular year without there being any change in the nature of activities of the institution. If in any particular year, the specified cut-off is exceeded, the tax exemption would be denied to the institution in that year and cancellation of registration would not be mandatory unless such cancellation becomes necessary on the ground(s) prescribed under the Act. The CBDT has also advised field authorities that in view of the adverse consequences of Xii-B, the registration of a charitable institution granted u/s 12AA should not be cancelled just because the proviso to section 2{15) comes into play. The process for cancellation of registration is to be initiated strictly in accordance with section 12 (3) and 12AA(4) after carefully examining the applicability of these provisions