Income Tax Act

Official PDF pages 431–435

SOURCE PDF PAGE 431
(2) The modes of investing or depositing money under this Part, other than the
modes specified in Schedule XVI, shall be specified by the Central Government,
by notification.
5. —Violations
Specified violation.
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  
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 .

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SOURCE PDF PAGE 432
( 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.
Tax on accreted income.
352.   (1) Every specified person shall, in addition to the income-tax chargeable
in respect of his total income, be liable to pay additional income-tax on
accreted income at the maximum marginal rate in any of the cases specified in
column B( i ) and ( ii ) of the Table in sub-section (4).
(2) The accreted income referred to in sub-section (1) shall be computed using the
following formula:—
A = B – C
where,—
A =   Accreted income;
B =   Aggregate fair market value of the total assets of the specified
person, as on the date specified, in column C of the Table in
sub-section (4), computed in accordance with such method
of valuation, as may be prescribed;
C =   Total liability of such specified person, as on the date specified
in column C of the said Table, computed in accordance with
such method of valuation, as may be prescribed.
(3) The accreted income, computed as per the provisions of sub-section (2) shall be
reduced by such amount of accreted income as is attributable to specified assets,
and liabilities, if any, related to such assets.
(4) The specified person and the principal officer or trustee of such specified per -
son shall be liable to pay the tax on accreted income to the credit of the Central
Government within fourteen days from the due date specified in column D of the
Table below:

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SOURCE PDF PAGE 433
TABLE
Sl.
No.
Case   Specified date   Due date for the
payment of tax on
accreted income
A   B   C   D
( i )   ( ii )
1.   The   registration
granted   to   the
specified   person
under any speci -
fied provision has
been cancelled or
withdrawn.
The specified per -
son has preferred
an appeal against
the order of can -
cellation.
The date of the or -
der cancelling the
registration.
Date of receipt of
the order in any ap -
peal,   confirming
the   cancellation
of the registration,
by   the   specified
person.
2.   The   registration
granted   to   the
specified   person
under any speci -
fied provision has
been cancelled or
withdrawn.
The specified per -
son has not pre -
ferred an appeal
against such order
of cancellation.
The date of the or -
der cancelling the
registration.
The date on which
the period for fil -
ing appeal under
section 362 against
the order cancel -
ling the registra -
tion expires.
3.   ( a )   The   speci -
fied   person
has adopted
or undertak -
en   modifi -
cation of its
objects dur -
ing any tax
year; and
( b )   such   modi -
fied objects
do not con -
form to the
conditions
of   registra -
tion.
The specified per -
son   has   not   ap -
plied for fresh reg -
istration under any
specified provision
in such tax year.
The date of adop -
tion or modifica -
tion of any object.
The end of such
tax year.
4.   ( a )   The   speci -
fied   person
has adopted
or undertak -
en   modifi -
cation of its
objects dur -
ing any tax
year; and
( b )   such   modi -
fied objects
The specified per -
son has applied for
fresh registration
under any speci -
fied provision in
such tax year and
where such appli -
cation has been re -
jected and appeal
has been preferred
against such order
of rejection.
The date of adop -
tion or modifica -
tion of any object.
The date of receipt
of   the   order   in
any appeal,   con -
firming the can -
cellation   of   the
registration by the
specified person.

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SOURCE PDF PAGE 434
Sl.
No.
Case   Specified date   Due date for the
payment of tax on
accreted income
A   B   C   D
( i )   ( ii )
do not con -
form to the
conditions
of   registra -
tion.
5.   ( a )   The   speci -
fied   person
has adopted
or undertak -
en   modifi -
cation of its
objects dur -
ing any tax
year; and
( b )   such   modi -
fied objects
do not con -
form to the
conditions
of   registra -
tion.
The specified per -
son has applied for
fresh registration
under any speci -
fied provision in
the said tax year
and   where   such
application   has
been rejected and
no appeal has been
preferred against
such order of re -
jection.
The date of adop -
tion or modifica -
tion of any object.
The date on which
the period for fil -
ing appeal under
section 362 against
the order cancel -
ling the registra -
tion expires.
6.   The specified per -
son fails to make
an application as
per the provisions
of—
( a )   sub-clause
( i ) or ( ii ) or
( iii )   of   the
first proviso
to section 10
( 23C ) of the
Income-tax
Act, 1961 (43
of 1961); or
( b )   sub-clause
( i ) or ( ii ) or
( iii ) of sec -
tion 12A(1)
( ac ) of the
The period spec -
ified   in   the   re -
spective   clause
or sub-clauses or
Table, as the case
may   be,   expires
in   the   tax   year
in which the said
application is to
be made.
The last date for
making an appli -
cation   for   regis -
tration.
The end of such
tax year.

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SOURCE PDF PAGE 435
Sl.
No.
Case   Specified date   Due date for the
payment of tax on
accreted income
A   B   C   D
( i )   ( ii )
Income-tax
Act, 1961 (43
of 1961); or
( c )   as specified
in   section
332(3)   (Ta -
ble: Sl. No.
3, 4, 5 or 7).
7.   Where a specified
person   converts
itself into a form
which is not eligi -
ble for grant of reg -
istration   during
any tax year.
The date of such
conversion.
The end of such
tax year.
68 [ 8.   The specified per -
son   has   merged
with any other—
The date of merger.   The date of merger. ]
( a )   entity   oth -
e r   t h a n   a
r e g i s t e r e d
n o n - p r o f i t
o r g a n i s a   -
tion; or
( b )   r e g i s t e r e d
n o n - p r o f i t
organisation
having
68.   Substituted by the Finance Act, 2026, w.e.f.   1-4-2026 . Prior to its substitution, Sl. No. 8 read
as under :
“ 8.   The specified person has merged with
any other entity other than a registered
non-profit organisation having the
same or similar objects and the said
merger does not fulfil such conditions,
as may be prescribed.
The date of
merger.
The date of
merger.”