As per the provisions of Section 3 of the Emblems and Names (Prevention of Improper Use) Act, 1950, any colourable imitation of an “emblem” when used for the purpose of any trade, business, calling or profession, or in the title of any patent, or in any trade mark or design, without previous permission of the Central Govt. or its authorised officer is prohibited and the penalty for its violation is prescribed under Section 5 as a fine of up to Rs. 5000/-. The word “emblem” includes the “Indian National Flag” as defined in Section 2 read with the Schedule to the said Act.
Thus, a colourable imitation of the Indian National Flag cannot be used in logo for a business without prior permission of the Central Government or its authorised officer. This appears to be the legal position.