Sub-section (1) lists seven specified violations by a registered non-profit organisation: applying any income other than for its objects; carrying out any commercial activity in contravention of section 345 — the words "or 346" having been omitted by Act No. 4 of 2026 with effect from 1 April 2026; applying any part of total income for private religious purposes which does not enure for the benefit of the public, the word "enure" having been substituted for "ensure" by that Act; where the organisation was created or established after the commencement of the Act for charitable purpose, applying any part of its income for the benefit of a particular religious community or caste other than the Scheduled Castes, Scheduled Tribes, backward classes, or women and children; carrying out an activity that is not genuine or not in accordance with the conditions of registration; non-compliance with any other law as referred to in section 332(7)(a) where the order, direction or decree holding that non-compliance occurred has not been disputed or has attained finality; and the section 332(1) application containing false or incorrect information.
Sub-section (2) sets three triggers — the Principal Commissioner or Commissioner having noticed one or more specified violations during any tax year, having received a reference from the Assessing Officer under section 270(13), or the organisation having been selected as per the Board's risk management strategy. On any of those he shall call for documents or information or make such inquiry as he thinks necessary; pass an order in writing either cancelling the registration, after a reasonable opportunity of being heard, for that tax year and all subsequent tax years, if satisfied that one or more specified violations have taken place, or not cancelling it if he is not so satisfied; and forward a copy to the Assessing Officer and the organisation.
Sub-section (3) requires that order to be passed before the expiry of six months from the end of the quarter in which the first notice calling for a document or information, or for an inquiry, is issued.
Why it is there
Registration is what makes the non-profit regime available, and the section defines the conduct that forfeits it and the officer who may take it away. The list in sub-section (1) is closed, so cancellation must be tied to a stated violation rather than to general dissatisfaction, and the procedure requires inquiry, a hearing and a written order either way. The six-month limit stops a cancellation inquiry hanging over an organisation indefinitely.
Who it applies to
A registered non-profit organisation whose registration is in question
Such an organisation created or established after the commencement of the Act for charitable purpose, for clause (1)(d)
The Principal Commissioner or Commissioner conducting the inquiry and passing the order
The figures, and what each one turns on
Read the condition in the same row. A figure quoted without it is a wrong answer with a citation attached.
What
Figure
The condition on it
Where
Time limit for passing the order
Six months
Calculated from the end of the quarter in which the first notice calling for a document or information, or for making an inquiry, is issued under sub-section (2)(i)
Sub-section (3)
Period for which registration is cancelled
That tax year and all subsequent tax years
Where the Principal Commissioner or Commissioner is satisfied a specified violation took place, after a hearing
Sub-section (2)(ii)(A)
What this means in practice
Cancellation is not prospective only — sub-section (2)(ii)(A) cancels registration for the tax year of the violation and for all subsequent tax years, so a violation found years later unwinds the intervening years too. The trigger in sub-section (2)(c) means an organisation can be put through this without any violation having been noticed: selection under the Board's risk management strategy is enough to start the inquiry, though an order can only cancel if a specified violation is established. Clause (1)(f) does not let the Principal Commissioner decide the other law for himself — it requires an order, direction or decree which is undisputed or final. Note also that clause (b) as it now stands refers only to section 345, the reference to section 346 having been omitted with effect from 1 April 2026.
An example
Illustrative only, and invented for this page. The figures are chosen to show the rule biting, not taken from any real matter.
An organisation applies Rs. 40 lakh of its income in a tax year on an activity outside its stated objects. The Principal Commissioner issues a notice in the quarter ending 30 June calling for documents, hears the organisation, and is satisfied that clause (1)(a) is made out. His order must be passed by 31 December, and it cancels the registration for that tax year and every subsequent one, with a copy to the Assessing Officer. That order is appealable to the Appellate Tribunal under section 362(1)(b)(i).
Where you meet this section
The organisation meets it as the notice under sub-section (2)(i) calling for documents or information, then as the hearing before the Principal Commissioner or Commissioner, and finally as the written order cancelling or not cancelling registration, a copy of which also goes to the Assessing Officer.
The words themselves
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
Section 351(2)(ii)(A), Income-tax Act, 2025.
shall be passed before the expiry of six months, calculated from the end of the quarter in which the first notice is issued
Section 351(3), Income-tax Act, 2025.
What people get wrong
Treating cancellation as effective only from the date of the order. It runs for the tax year of the violation and all subsequent tax years.
Counting the six months from the date of the first notice. Sub-section (3) runs it from the end of the quarter in which that notice is issued.
Reading clause (1)(b) as still covering section 346. Those words were omitted by Act No. 4 of 2026 with effect from 1 April 2026.
Assuming any breach of another law is a specified violation. Clause (1)(f) requires an undisputed or final order, direction or decree, and the law must be one referred to in section 332(7)(a).
Applying clause (1)(d) to an older organisation. It is confined to one created or established after the commencement of the Act.
What this replaced
The correspondence is the Income Tax Department’s own, from its comparison utility for the 1961 and 2025 Acts. A renumbering is the easy half; whether the words changed is the half that decides cases.
A circular binds the department, not you and not a court. Every one below was written under the 1961 Act; it reaches this section because the department’s own concordance carries the provision it names to this one.
Circular No. 13/2024 — Extension of due date for furnishing return of income for the assessment year 2024 25 2024-10-26
Circular No. 3/2024 — Circular under section 119 of the income tax act 1961 2024-03-06
Circular No. 17/2023 — Order under section 119 of the Income-tax Act, 1961 2023-10-09
Circular No. 6/2020 — Condonation of delay under section 119 2 b of the income tax act 1961 in filing of return of income for a.y 2016 17 2017 18 and 20 2020-02-19
Circular No. 2 — 233. Claim for depreciation - Where required particulars have not been furnished 2001-02-09
Circular No. 596 — 174. Clarification regarding applicability of section 13(1)(d) from assessment year 1984-85 and not from assessment year 1983-84 1991-03-15
Circular No. 557 — 125. Clarifications regarding Form Nos. 55 and 56 for grant of exemption 1990-03-19
Circular No. 322 — 175. Requirement of investing funds of trust in modes specified in section 13(5) during previous year commencing on or after April 1982-01-16
Circular No. 317 — 176. Pending amendment to modify mode of investment under section 13(5), Commissioners authorised to issue/renew recognition under 1981-12-19
Circular No. 143 — 172. Audit report in Form No. 10B in terms of rule 17B - Auditor can accept as a correct list of specified persons as given by man 1974-08-20
Circular No. 102 — Exemption of interest on savings certificates under clause (15)(ii) - Interest on holdings in the names of wife and minor children 1973-02-03
Circular No. 51 — 177. Whether provisions of section 13(2)(h), providing for forfeiture of exemption, apply with reference to shares in company init 1970-12-23
A notification is made under a power the Act gives and, within that power, is law. These too were made under the 1961 Act and are placed here by the department’s concordance.
Read this before you rely on it. Every decision below was decided under the Income-tax Act, 1961. It appears here because it is tagged to a 1961 provision that the department’s own mapping carries to section 351. That is an inference we have drawn, not a holding on the new section: where the words changed in the move, the reasoning may not survive. Treat this as the place to start looking, not as authority on the 2025 Act.
ACIT v Ahmedabad Urban Development AuthoritySupreme CourtCuts both waystagged s.13(8) We charge fees for our public utility work. Does that cost us charitable status under s.2(15)?
ACIT v Thanthi TrustSupreme CourtCuts both waystagged s.13(1)(bb) Our trust runs a business and puts the profit into its objects. Does s.11(4A) still deny the exemption?
CIT (E) v Hamdard National Foundation (India)High CourtHelps taxpayertagged s.13(2)(b) The officer says we let our building to a related party below market rent. Is that by itself a breach of s.13(2)(b)?
CIT (E) v IILM FoundationHigh CourtHelps taxpayertagged s.13(1)(c) Our trust pays a salary to its chairperson, who is a trustee. Does that cost us the s.11 exemption?
CIT (Exemptions) v Audyogik Shikshan MandalHigh CourtHelps taxpayertagged s.13 Trust funds went to a trustee. Does the trust lose exemption on all its income or only that amount?
CIT v Fr. Mullers Charitable InstitutionsHigh CourtHelps taxpayertagged s.13(1)(d) One deposit of ours breaks the s.11(5) modes. Will the department tax the trust's entire income?
Daujee Abhushan Bhandar P Ltd v UOIHigh CourtHelps taxpayertagged s.13 Information Technology Act, 2000 The s.148 notice was digitally signed on 31 March but the e-mail only went on 6 April. Was it issued in time?
Hemkunt Foundations v PCITITATHelps taxpayertagged s.12AB The pcit cancelled our 12A registration after a survey. Was he even allowed to do that?
What this page does not tell you. It does not reproduce the section. Everything above was written from the section’s own text as the Income Tax Department publishes it — the text is here, and nothing here is advice on your facts. Where a figure matters, read the sub-section it comes from.