Section 353 — Other violations

(1) Where any registered non-profit organisation—
( a) fails to maintain books of account under section 347; or
( b) fails to get books of account audited under section 348; or
( c) fails to furnish its return of income under section 349; or
( d) carrying out advancement of any other object of general public utility,
carries out any commercial activity in contravention of the provisions
of section 346,
during any tax year, its regular income for such tax year as reduced by the expen -
diture referred to in sub-section (3) shall be taxable regular income which shall be
chargeable to tax as per the provisions of section 334.
(2) Irrespective of the provisions of section 338, any specified income and
residual income of the registered non-profit organisation, which is not included in
sub-section (1) shall also be chargeable to tax under the provisions of section 334.
(3) The expenditure referred to in sub-section (1) shall be the expenditure incurred
in India (other than capital expenditure) for the objects of the registered non-profit
organisation, subject to the fulfilment of the following conditions:—
( a) such expenditure shall be incurred in India;
( b) such expenditure shall be for the objects of the registered non-profit
organisation;
( c) such expenditure is not made from the corpus standing to the credit
of the registered non-profit organisation as on the end of the tax year
immediately preceding the tax year for which income is being
computed;
( d) such expenditure is not out of any loan or borrowing;
( e) the claim of depreciation is not in respect of an asset, acquisition of which
has been claimed as application of income, in the same or any other tax
year;
( f) such expenditure is not in the form of any contribution or donation to
any person;
( g) such expenditure is not on account of a payment or aggregate of payments
made to a person in contravention to the provisions of section 36(4), (5),
(6) and (7); and
( h) such payment is allowable under section 35(b)(i).
(4) For the purposes of this section, no set off or deduction or allowance of any
application or expenditure other than those referred to in sub-section (3) shall be
allowed.
6. —Approval for purpose of deduction under section 133(1)(b)(ii)