Specified violation
[Section-351 as per the Income Tax Act, 2025 (this Act) w.e.f. 1st April, 2026.]
Section 351(1) of Income Tax Act 2025
351(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; or
- (c) where it has applied any part of its total income for private religious purposes, which does not ensure 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 organisation 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 requirements under section 332(7) 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.
Section 351(2) of Income Tax Act 2025
351(2) Where during any tax year,––
- 351(2)(a) the Principal Commissioner or Commissioner has noticed occurrence of one or more specified violations;
- 351(2)(b) the Principal Commissioner or Commissioner has received a reference from the Assessing Officer under section 270(13) for any tax year; or
- 351(2)(c) a registered non-profit organisation has been selected as per the risk management strategy formulated by the Board,
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;
- (ii) pass an order,––
- (A) either cancelling the registration of such registered non-profit organisation, after affording a reasonable opportunity of being heard, for such tax year during which such specified violation took place 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.
Section 351(3) of Income Tax Act 2025
351(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.
FAQs on Section 351 of Income Tax Act 2025
What is meant by a ‘specified violation’ under Section 351(1)?
A ‘specified violation’ refers to any activity or condition listed under clauses (a) to (g) of Section 351(1) which, if committed by a registered non-profit organisation, can lead to cancellation of its registration.
What happens if a registered non-profit organisation applies income other than for its objects?
Applying income for purposes other than the stated objects of the organisation constitutes a specified violation under clause (a) of Section 351(1).
Is carrying out commercial activity a specified violation?
Yes, carrying out any commercial activity that contravenes Section 345 is a specified violation under clause (b).
Does applying income for private religious purposes count as a violation?
Yes, applying any part of the total income for private religious purposes that do not benefit the public is a specified violation under clause (c).
Can a non-profit organisation apply income for the benefit of a particular religious community?
No, if the organisation was established after the commencement of the Act and applies income for the benefit of a specific religious community or caste—except Scheduled Castes, Scheduled Tribes, backward classes, women, and children—it is a violation under clause (d).
What if the activities of a non-profit organisation are found to be not genuine?
Engaging in activities that are not genuine or not aligned with registration conditions constitutes a specified violation under clause (e).
Is non-compliance with Section 332(7) a specified violation?
Yes, failure to comply with Section 332(7), confirmed by an order or decree that is undisputed or final, is a violation under clause (f).
Does submitting false information in the registration application amount to a violation?
Yes, if the application under Section 332(1) contains any false or incorrect information, it is considered a specified violation under clause (g).
Who can initiate action upon noticing a specified violation?
The Principal Commissioner or Commissioner may initiate action upon noticing a violation, receiving a reference from the Assessing Officer under Section 270(13), or selection under the Board’s risk management strategy.
What steps can the Principal Commissioner or Commissioner take after detecting a violation?
They can call for documents or conduct inquiries, and either cancel or retain the organisation’s registration depending on whether they are satisfied that a specified violation occurred.
What is the consequence if a specified violation is confirmed?
If confirmed, the Principal Commissioner or Commissioner can cancel the registration for the tax year in which the violation occurred and all subsequent years.
What is the timeline to pass an order under Section 351(2)(ii)?
An order must be passed within six months from the end of the quarter in which the first notice was issued under clause (i) of Section 351(2).
Will the organisation be given a chance to present its case before cancellation?
Yes, a reasonable opportunity of being heard must be provided before cancelling registration.
To whom is the cancellation order communicated?
A copy of the order is forwarded to both the Assessing Officer and the registered non-profit organisation.
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