Section 351 — Specified violation

(1) The following shall constitute specified violation by a registered non-profit
organisation:—
( a) where any income of the registered non-profit organisation has been
applied, other than for its objects; or
( b) it carries out any commercial activity in contravention of the provisions
of section 345 66[***]; or
( c) where it has applied any part of its total income for private religious
purposes, which does not 67[enure] for the benefit of the public; or
( d) where a registered non-profit organisation, created or established after
the commencement of this Act for charitable purpose, has applied any
part of its income for the benefit of any particular religious community
or caste other than the Scheduled Castes or the Scheduled Tribes or
backward classes or women and children; or
( e) where any activity being carried out by the registered non-profit organ-
isation is not genuine or is not being carried out in accordance with all
or any of the conditions subject to which it was registered; or
( f) the registered non-profit organisation has not complied with the require-
ments of any other law as referred under section 332(7)(a) and the order,
direction or decree, holding that such non-compliance has occurred, has
either not been disputed, or has attained finality; or
( g) the application referred to in section 332(1) contains any false or
incorrect information.
(2) Where,—
( a) the Principal Commissioner or Commissioner has noticed occurrence
of one or more specified violations during any tax year;
( b) the Principal Commissioner or Commissioner has received a reference
from the Assessing Officer under section 270(13) for any tax year; or
( c) a registered non-profit organisation has been selected as per the risk
management strategy formulated by the Board for any tax year,
the Principal Commissioner or Commissioner shall—
( i) call for such documents or information from the registered non-profit
organisation, or make such inquiry as he thinks necessary in order to
satisfy himself about the occurrence of any specified violation;
66. Word and figures “or 346” omitted by the Finance Act, 2026, w.e.f. 1-4-2026.
67. Substituted for “ensure”, ibid.
( ii) pass an order in writing,—
( A) either cancelling the registration of such registered non-profit
organisation, after affording a reasonable opportunity of being heard,
for such tax year and all subsequent tax years, if he is satisfied that
one or more specified violations have taken place; or
( B) not cancelling the registration of such registered non-profit
organisation, if he is not satisfied about the occurrence of any
specified violation; and
( iii) forward a copy of the order passed under clause ( ii) to the Assessing
Officer and such registered non-profit organisation.
(3) The order under sub-section (2)( ii), shall be passed before the expiry of six
months, calculated from the end of the quarter in which the first notice is issued
by the Principal Commissioner or Commissioner, calling for any document or
information, or for making any inquiry, under clause (i) of the said sub-section.