The Chhattisgarh High Court recently upheld a 2019 order by the Income Tax Appellate Tribunal (ITAT) granting Section 80G approval to a Raipur-based charitable society. The Income Tax Department had earlier rejected the approval on grounds that the society was engaged in commercial activities like charging vocational training fees and renting property. However, both the ITAT and the High Court observed that the society held a valid Section 12AA registration, which had neither lapsed nor been revoked. As per law, such registration is a prerequisite for 80G eligibility and must be formally withdrawn before any denial of 80G benefits.
This ruling is significant as it reiterates a vital legal principle: once Section 12AA registration is in force, tax authorities cannot withhold 80G approval merely by questioning the operational activities of a charitable trust. It limits administrative discretion and adds clarity for thousands of trusts and NGOs across India, many of whom often face subjective assessments despite formal compliance. By reinforcing the legal sanctity of Section 12AA, the judgment ensures that charitable institutions are not penalized unless there's a proper and recorded cancellation of their registration.
In essence, this verdict protects the interests of genuine nonprofits and charitable societies from arbitrary revenue scrutiny. For professionals in tax law and compliance, it’s a strong reminder that procedural safeguards like revocation protocols cannot be bypassed. This also comes as a welcome precedent in the ongoing conversation around transparency, ease of doing philanthropy, and legal certainty for India’s charitable sector.