Charitable registration and 80G approval cannot be denied merely because hospital operations have not fully commenced.

Charitable registration cannot be refused merely because a hospital project has not yet fully commenced, where the trust's objects are charitable and fall within medical relief under section 2(15). At the registration stage, the enquiry is limited to whether the objects are charitable and whether the proposed activities are genuine and aligned with those objects. If no adverse finding is recorded that the objects are commercial or otherwise non-charitable, non-commencement of full operations alone does not justify rejection. On that basis, refusal of registration under section 12AB(1)(b) was held unsustainable, and consequential approval under section 80G was also to follow.

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Issues: Whether refusal of registration under section 12AB(1)(b) and consequential approval under section 80G of the Income-tax Act, 1961 was justified when the trust's objects were charitable but the hospital-related activities had not yet fully commenced.

Analysis: The objects of the applicant societies were found to be charitable, particularly within the scope of medical relief under section 2(15). The authorities had not recorded any adverse finding that the objects were non-charitable or commercial in nature. At the registration stage, the enquiry is confined to whether the objects are charitable and whether the proposed activities are genuine and in consonance with those objects. The fact that the hospital was under construction and full-scale operations had not begun could not, by itself, justify rejection, since proposed activities are relevant for registration.

Conclusion: Refusal of registration under section 12AB(1)(b) on the ground of non-commencement of activities was not sustainable, and consequential approval under section 80G was also required to be granted.

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