What's wrong in this sentence?

Well, in fact the correct answer is 'hold' instead of 'holding' because there is the pharse 'used to'. This is a general case which bare infinitives (i.e. Simple Present tense) should be used.

However, there are some exceptional cases such as 'looking forward to'. In this case, present continuous tense should be used after the word 'to'.

use an 'inifinitive' after 'to'.

I used to HOLD a party on my birthday every year but this year, when my mother asked me if I wanted to hold a birthday party, I said no.