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2020 (9) TMI 290
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....der "General Public Utility" thereby attracting proviso to Sec. 2(15). 3. The learned Commissioner of Income Tax (Exemptions), Jaipur has erred in law as well as in facts in not providing proper opportunity of being heard to the appellant before passing the order." 2. Briefly the facts of the case are that the assessee-Council filed an application in Form No. 10A for seeking registration U/s 12AA of the IT Act. On receipt of the application and after going through the documents and explanations so called for, the ld. CIT(E) issued a show cause dated 05.09.2019 to the assessee-Council stating that the applicant-Council is in receipt of direct income comprising mainly registration fees, counseling fees, examination fees, inspection fees, revaluation fees which form foremost part of the total income in each year stating from F.Y 2015-16 to F.Y 2017-18. It was further stated that the said income also describes the activities undertaken by the appellant-Council during the said period which is in the nature of "general public utility" and cannot be termed as charitable under the head "education". Further, the ld CIT(E) referring to the proviso to Section 2(15) of the Act, sta....
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....) of the Income-tax Act, 1961. Based on above, I am satisfied that the applicant trust is not fit for registration and, therefore, registration u/s 12AA is rejected." 3. Against the rejection of its application seeking registration under section 12AA and the aforesaid order and findings of the ld. CIT(E), the assessee council is now in appeal before us. 4. During the course of hearing, the ld. AR submitted that the assessee, Rajasthan Nursing Council ('RNC') was set up by the State Government under the Rajasthan Nursing, Midwives, Health Visitors and Auxiliary Nurse Midwives Registration Act. No. 9 of 1964, published in the Rajasthan Gazette dated March 28, 1964, for fulfillment of the aims and the objectives as laid down in the Act. It was submitted that the Council is directly governed by the State Government under the Department of Medical and Health. It was submitted that the qualifications offered by the Rajasthan Nursing Council are General Nursing, Midwifery, Auxiliary Nursing Midwifery and Health Visitors, duly recognized by the Indian Nursing Council incorporated under The Indian Nursing Council Act, 1947. It was submitted that the major functions of the RNC as per t....
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....inees related to health and medical. 7. It was submitted that Section 6 of the Act lays down that the term of office of members who shall continue as such long as they hold the office by virtue of which he is a member of the Council. It was submitted that in section 34 of the Act, it is mentioned that all the rules and regulations finally made under this Act shall be laid before the House of the State Legislature. 8. It was submitted that as per the order dated 10th April 2019 regarding establishment matter from the Medical & Health Department, Government of Rajasthan (administrative Department of the Council), it is clarified that "The State Government has created and subscribed the council and fix the various fees/charges to cover the normal expenditure on operation and development of the amenities/ infrastructure to serve the society in better manner." It is further mentioned at para 5 of the order that "The revenue collected by the Council is primarily on authorization of the State Government and is to be retained by the Council for meeting the operations and future development expenses." 9. It was submitted that the Council is also the sole recognized body to regulate....
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....it was submitted that there is no doubt to the fact that the Council is a body owned and governed by the State Government having the purpose to regulate educational institutions and to implement the Educational Policy of the State and the facts and circumstances of the case of Lok Sikshana Sansthan and Bar Council of Maharashtra are conceptually different from the facts of the present case. 14. It was further submitted that the Ld. CIT(E) has contradicted his earlier findings by wrongly terming the receipts from registration fees, counseling fees, examination fees, inspection fees, revaluation fees etc of the Council as business/ commercial receipts, while it was clearly held by the Ld. CIT(E) that the Council is clearly a general public utility institution. The Learned CIT has failed to mention the fact that the receipts are from the educational activities and are not commercial receipts. The predominant object of the Council is education and not earning profits. 15. It was submitted that the Council is an educational institution and secondly, the predominant object of the Council is education and the proviso to section 2(15) of the Income Tax Act is not applicable upon the ....
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....ovides education including by way of affiliation, so that the modern system of education and benefits of private expertise are available to the students. Further, it is relevant to note that the institution affiliated with the Council are treated and granted exemption as educational institution, where they cannot provide education without affiliation and all exams are held & degree is awarded to the students by the Council. 21. It was submitted that the Ld. Commissioner has wrongly applied the decision of Hon'ble Supreme Court in the case of Sole Trustee, Lok Shikshana Sansthan v. CIT (1975) 101 ITR 234(SC) where it was held that "all kinds of acquiring knowledge will not come within the meaning of "Education". What "Education" connotes is systematic instruction by way of normal schooling." Here we would like to mention that the Council, as per the Act follow and have systematic instruction for nursing education and also to regulate the educational institutions to implement the Educational Policy of the State. 22. It was submitted that the Hon'ble Supreme Court in the case of Assam State Text Book Production and Publication Corporation Ltd. reported in (2009) 319 ITR 317 has ....
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....evious year. 26. The explanatory note to the amendment read as under: "Explanatory note to Finance Act, 2015 - In so far as the advancement of any other object of GPU is concerned, there is a need to ensure appropriate balance being drawn between the object of preventing business activity in the garb of charity and at the same time protecting the activities undertaken by the genuine organisation as part of actual carrying out of the primary purpose of the trust or institution." 27. In a nutshell, the meaning of the above proviso is that while deciding the case where business activities are visible, the predominant object test is to be applied and also the business activities should be in the course of actual carrying out of such GPU activities i.e. such business activities should only be incidental to the charitable object and hence should not be the pre-dominant or primary activity by itself. 28. It was submitted that it is now a well established law that where the predominant objects are charitable, the proviso to Section 2(15) of the Income Tax, 1961 is not applicable. It was submitted that the purpose of the Central/State Governments is to safeguard the interest of gen....
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....0 * Assam State Text Book Production & Publication Corpn. Ltd. (2009) 319 ITR 317 (SC) * GS1 India v.DGIT (Exemptions) [2014] 360 ITR 138(Del) * Secondary Board Of education v. ITO (1972) 86 ITR 408 (Orissa) * Katra Educational Society v. ITO [1978] 111 ITR 420 (All.) * Aditanar Educational Institution vs. Addl. CIT (1997) 224 ITR 310(SC) * Shavak Shiksha Samiti vs CIT 104 TTJ 127 (Del) * Pinegrove International Charitable Trust vs Union of India [2010] 188 TAXMAN 402 (PUNJ. & HAR.) * CIT vs Gujarat Maritime Board (2007) 295 ITR 561 (SC) * Indian Chamber of Commerce vs. Commissioner of Income Tax (1975)101 ITR 0796 * Add.CIT vs. Surat Silk Cloth Manufacturers Association [1980] 2 SCC 31 31. It was finally submitted that the predominant purpose and functions of the Council is Education, it's a body constituted for the purpose of serving the society for education in Nursing & therefore eligible for registration as Education u/s 12AA of the Act. The Council is State owned and controlled for welfare of the Society and not for profit, the surplus from the activities of the Council is retained fo....
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....tted that the decision of Hon'ble Supreme Court in case of Assam State Textbook Board, relied upon by the ld. Council, is not applicable since firstly, the Hon'ble Supreme Court set aside the case to be considered de-nova by the AO and hence did not lay down any law, secondly the activities of the said education Board was different and thirdly, the said decision was rendered in the context of Section 10(22) of the Act. It was accordingly submitted that there is no infirmity in the finding of the CIT(E) that the activities of the appellant council cannot be termed as charitable under the category of "education" and its activities fall under the category of "general public utility" to which proviso to Section 2(15) of the Act is applicable. 34. Further referring to the proviso to Section 2(15) of the Act, it was submitted by the ld CIT/DR that the said proviso was inserted to keep a check on the entities who have other objects of general public utility and who used object of general public utility as a mask or a device to hide the true purpose which is trade, commerce or business or the rendering of any services in relation to trade, commerce or business. Further referring to the ....
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.... poor, education, yoga, medical relief, preservation of environment (including watersheds, forests and wildlife) and preservation of monuments or places or objects of artistic or historic interest, and the advancement of any other object of general public utility: Provided that the advancement of any other object of general public utility shall not be a charitable purpose, if it involves the carrying on of any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration, irrespective of the nature of use or application, or retention, of the income from such activity, unless- (i) such activity is undertaken in the course of actual carrying out of such advancement of any other object of general public utility; and (ii) the aggregate receipts from such activity or activities during the previous year, do not exceed twenty per cent of the total receipts, of the trust or institution undertaking such activity or activities, of that previous year. 36. The contentions advanced on behalf of the assessee Council is that firstly, it is an....
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....pose of a trust or institution was charitable, any other object which by itself might not be charitable but which was merely ancillary or incidental to the' primary or dominant purpose would not prevent the trust or institution from being a valid charity. After the addition of the restrictive words in the definition in the 1961 Act, this Court in Addl. CIT v. Surat Art Silk Cloth Manufacturers' Association [1980] 121 ITR 1 affirmed that the aforesaid test of primary or dominant purpose of a trust or institution still holds good, that the restrictive words qualify "object" and not the advancement or accomplishment thereof, and that the true meaning of the restrictive words was that when the purpose of a trust or institution was the advancement of an object of general public utility, it was that object of general public utility and not its accomplishment or carrying out which must not involve the carrying on of any activity for profit. And applying these tests trading bodies like Andhra Chamber of Commerce and Surat Art Silk Cloth Manufacturers' Association have been held to be institutions constituted with a view to advance an object of general public utility because the....
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....functions that could be undertaken by the State Bar Council and from amongst the obligatory functions it will be wrong to pick out one and say it is the primary or dominant object or purpose. All the clauses of sub-section (1) will have to be considered in light of the main objective sought to be achieved as indicated in the Preamble. The functions mentioned in clauses (a) and ( b)of sub- section (1), namely, to admit persons as advocates on its roll and to prepare and maintain such roll, are clearly regulatory in character intended to ensure that persons with requisite qualifications who are fit and otherwise proper to be advocates are available for being engaged by the litigating public ; the function prescribed in clause (c) has been enjoined upon avowedly with the objective of protecting the litigating public from unscrupulous professionals by taking them to task for any misconduct on their part ; it is also one of the obligatory functions of a State Bar Council to promote and support measures for law reform as also to conduct law seminars and organise talks on legal topics by eminent jurists, obviously with a view to educate the general public; the function prescribed by claus....
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....be a body intended to advance any object of general public utility and following the decision of Hon'ble Supreme Court in case of Bar Council of Maharashtra (supra), it was held as under (head notes):- "The dominant purpose of a State Bar Council, as reflected by its various obligatory functions, is to ensure quality service of competent lawyers to the litigating public, to spread legal literacy, promote law reforms and provide legal assistance to the poor, while the benefit accruing to the layer-members is incidental. The primary or dominant purpose of an institution like the State Bar Council is the advance of an "object of general public utility" within the meaning of s. 2(15) of the I.T. Act, 1961, and as such the income from securities held by the Council would be exempt from income-tax under s. 11 of the I.T. Act, 1961. Therefore, the Bar Council of Rajasthan, a body corporate constituted under the Advocates Act, 1961, created for charitable purposes within the meaning of s. 2(15) of the Act is engaged in the advancement of law and the legal profession, which are objects of general public utility and as such the interest income received by the Council from its invest....
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.... candidates for enrolment and the prescribing of fees therefor; (b) the regulation of the engagement and training of a[articled and audit clerks]; (c) the prescribing of qualifications for entry in the Register; (d) the recognition of foreign qualifications and training for purposes of enrolment; (e) the granting or refusal of certificates of practice under this Act; (f) the maintenance and publication of a Register of persons qualified to practice as chartered accountants; (g) the levy and collection of fees from b[* * * *] members, examinees and other persons; (h) the removal of names from the Register and the restoration to the Register of names which have been removed; (i) the regulation and maintenance of the status and standard of professional qualifications of [members of the Institute]; (j) the carrying out, by financial assistance to persons other than members of the Council or in any other manner, of research in accountancy; (k) the maintenance of a library and publication of books and periodicals relating to accountancy; and (l) the exercise of disciplinary powers conferred....
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....ner-institute who want to update their knowledge and develop and sharpen their professional skills, but this is not the sole or primary activity. The petitioner-institute may hold classes and give diploma/degrees to the members of their institute in various subjects but this activity is only an ancillary part of the activities or functions performed by the petitioner institute. This one or part activity by itself, does not mean that the petitioner is an educational institute or is predominantly or exclusively engaged in the activity of education. The petitioner institute is engaged in multifarious activities of diverse nature, but the primary and the dominant activity is to regulate the profession of Chartered Accountancy. For this purpose it holds entrance examination and enrolls members. It regulates the conduct of its members, prescribes and fixes accountancy standards, etc. Thus, we uphold the impugned order dated 19th May, 2009 passed by the respondent to the extent it has been held that the petitioner institute is covered by the last limb of section 2(15) and is not an institute providing education but for reasons different than those ascribed in the said order." ....
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....mination conducted by some other entity/body. Conducting of coaching classes is with the predominant object of maintaining and upholding the standards of the accountancy profession and in furtherance of the object and purpose for which the institute is established, i.e., professional excellence and promotion of accountancy as a preferred profession. Members of petitioner Institute attend courses/lectures etc. to sharpen their skill and knowledge. These are ancillary activities to the main activity performed and the object for which the institute has been established." 42. In case of Bureau of Indian Standards vs Director General of Income-tax (Exemptions) [2012] 27 taxmann.com 127 (Delhi), the Hon'ble Delhi High Court held as under: "13. In view of the above discussion, it cannot be said that the BIS is involved in any carrying on trade, commerce or business. BIS is a statutory body established under the BIS Act and was brought into existence "for the harmonious development of the activities of standardisation, marking and quality certification of goods". This was, and has been, its primary and pre-dominant object. Even though it does take license fee for granting marks....
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....c. shows that the body is constituted under Section 6 of the Advocates Act, 1961 to benefit the public at large by having on its rolls, advocates who are not only competent in law but who are respectable and proper persons to belong to the noble profession of lawyers; the said activities have been held for the advancement of general public utility within the meaning of Section 2(15) of the Act. In Ahmedabad Rana Caste Association (supra), the Supreme Court held that the expression "any other object of general public utility" prima facie include all objects which promote the welfare of the general public. It cannot be said that a purpose would cease to be charitable even if public welfare is intended to be served. If the primary purpose and the predominant object are to promote the welfare of the general public the purpose would be charitable purpose. 16. What survives to be determined is whether any of BIS's activities fall within the latter and larger category of "involved in the carrying on of any activity of rendering any service in relation to any trade, commerce or business". The expressions "any activity," "rendering any service" and "in relation to any trade, co....
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....wers, including inspection, raids; they possess search and seizure powers and are invariably subjected to Parliamentary or legislative oversight. The primary object for setting up such regulatory bodies would be to ensure general public utility. The prescribing of standards, and enforcing those standards, through accreditation and continuing supervision through inspection etc, cannot be considered as trade, business or commercial activity, merely because the testing procedures, or accreditation involves charging of such fees. It cannot be said that the public utility activity of evolving, prescribing and enforcing standards, "involves" the carrying on of trade or commercial activity. 17. In view of the above discussion, the Court is of opinion that the impugned order of the Director of Income Tax dated 24.2.2012 is contrary to law. It is hereby quashed. The respondents are directed to process the case of BIS and issue the exemption hitherto enjoyed by it, under Section 10 (23) of the Act, within 10 weeks from today. The Petition is allowed in the above terms; no costs. 43. In case of GS1 India vs Director General of Income-tax (Exemption) [2013] 38 taxmann.com 364 (Delh....
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.... apply. An institution will not be regarded as established for charitable purpose/activity under the last limb, if cess, fee or consideration is received for carrying on any activity in nature of trade, commerce or business or for any activity of rendering of any service in relation to any trade, commerce or business, even if the consideration or the money received is used in furtherance of the charitable purposes/activities. In view of the first proviso, the decisions that the application of money/profit is relevant for determining whether or not a person is carrying on charitable activity, are no longer relevant and apposite. Even if the profits earned are used for charitable purposes, but fee, cess or consideration is charged by a person for carrying on any activity in the nature of trade, commerce or business or any activity of rendering of any service in addition to any trade, commerce or business, it would be covered under the proviso and the bar/prohibition will apply.' Scope of "Trade, Commerce or Business" 19. The final and determining factors, it was observed was consequential profit motive or purpose behind the activity and when an activity is trade....
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....roduce extract from Circular No. 11 of 2008 issued by the Central Board of Direct Taxes explaining the amendments to Section 2(15) of the Act. The relevant portion of the circular reads as under: "Section 2(15) of the Income Tax Act, 1961 ('Act') defines "charitable purpose" to include the following:- (i) Relief of the poor (ii) Education (iii) Medical relief, and (iv) the advancement of any other object of general public utility. 2. An entity with a charitable object of the above nature was eligible for exemption from tax under section 11 or alternatively under section 10(23C) of the Act. However, it was seen that a number of entities who were engaged in commercial activities were also claiming exemption on the ground that such activities were for the advancement of objects of general public utility in terms of the fourth limb of the definition of 'charitable purpose'. Therefore, section 2(15) was amended vide Finance Act, 2008 by adding a proviso ... 3. The newly inserted proviso to section 2(15) will apply only to entities whose purpose is advancement of any other object of general public utility'....
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....d and propound in the impugned order to state that the petitioner is engaged in business, trade or commerce and aforesaid encapsulated in the impugned order. Petitioner has acquired intellectual property rights, receives fee from third parties, which is nothing but payment of royalty, there is huge surplus of receipts over expenditure (refer table reproduced in paragraph 7 above) and payment is made by the petitioner to GS1 Global Services, Belgium. 24. Can it be said that the petitioner is engaged in activities which constitute business, commerce or trade? As observed above, legal terms "trade, commerce, or business" in Section 2(15), means activity undertaken with a view to make or earn profit. Profit motive is determinative and a critical factor to discern whether an activity is business, trade or commerce. 25. Business activity has an important pervading element of self- interest, though fair dealing should and can be present, whilst charity or charitable activity is anti-thesis of activity undertaken with profit motive or activity undertaken on sound or recognized business principles. Charity is driven by altruism and desire to serve others, though element of....
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....ate sector manufacturers and traders. No fee is charged from users and beneficiaries like stockiest, whole sellers, government department etc. while a nominal fee is only paid by the manufacturer or marketing agencies i.e. the first person who installs the coding system which is not at all exorbitant in view of the benefit and advantage which are overwhelming. Any one from any part of the world can access the database for identification of goods and services using global standard. The fee is fixed and not product specific or quantity related i.e. dependent upon quantum of production. Registration and annual fee entitles the person concerned to use GS1 identification on all their products. Non levy of fee in such cases may have its own disadvantages and problems. Charging a nominal fee to use the coding system and to avail the advantages and benefits therein is neither reflective of business aptitude nor indicative of profit oriented intent. 28. Having applied the test mentioned above, including the criteria for determining whether the fee is commensurate and is being charged on commercial or business principles, we find that the petitioner fulfills the charitable activity ....
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....such requirement has been pointed out or argued. A practical and pragmatic view is required when we examine the data, which should be analyzed objectively and a narrow and coloured view will be counter-productive and contrary to the language of Section 2(15) of the Act. 35. The second proviso, which refers to the aggregate value of receipt of activities of Rs. 10 lacs (now enhanced Rs. 25 lacs vide Finance Act 2011 with effect from 1.4.2012) or less in a previous year, cannot be invoked in the present case because the said provision will apply only if the institution covered by the last/residuary clause is involved or carrying on activity of rendering any service in relation to trade, commerce or business. Contention of the respondent, if accepted, would deny charitable status to a faintly moderate size institution under the last/residuary limb, when it charges even a token or insignificant amount from the beneficiaries, who gain significantly from the altruism and benevolence. A small charitable organization that receives token fee of more than Rs. 80,000/- a month or now Rs. 2,00,000/- per month approximately, would disqualify and lose their charitable status. The object....
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....Act, the petitioner is enjoined to plough back its income in furtherance of its object and the declaration of dividends is prohibited. If a literal interpretation is to be given to the proviso, then it may be concluded that this fact would have no bearing on determining the nature of the activity carried on by the petitioner. But, we feel that in deciding whether any activity is in the nature of trade, commerce or business, it has to be examined whether there is an element of profit making or not. Similarly, while considering whether any activity is one of rendering any service in relation to any trade, commerce or business, the element of profit making is also very important. 46. At this juncture, we may point out that we are in agreement with the argument advanced by Mr Syali that the proviso to Section 2(15) does not make any distinction between entities carrying on regular trade, commerce or business or providing services in relation to any trade, commerce or business on the one hand and genuine charitable organizations on the other. It must be remembered that we are construing the expression "charitable purpose" not in a vacuum, but in the specific context of Section ....
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....eriod prior to assessment year 2009-10. Therefore, insofar as the receiving of income is concerned, that cannot be taken as an instance to deny the petitioner its status as an institution established for charitable purposes. Because, if that were to be so, then there would be no necessity to take recourse to Section 10(23C)(iv) for the benefit of an exemption. To put it plainly, if an institution established for charitable purposes did not receive an income at all, then what would be the need for taking any benefit under Section 10(23C)(iv) of the said Act. Therefore, if a meaning is given to the expression "charitable purpose" so as to suggest that in case an institution, having an objective of advancement of general public utility, derives an income, it would be falling within the exception carved out in the first proviso to Section 2(15) of the said Act, then there would be no institution whatsoever which would qualify for the exemption under Section 10(23C)(iv) of the said Act. And, the said provision would be rendered redundant. This is so, because, if the institution had no income, recourse to Section 10(23C)(iv) would not be necessary. And, if such an institution had an inco....
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....siness." 53. From the said decision, it is apparent that merely because a fee or some other consideration is collected or received by an institution, it would not lose its character of having been established for a charitable purpose. It is also important to note that we must examine as to what is the dominant activity of the institution in question. If the dominant activity of the institution was not business, trade or commerce, then any such incidental or ancillary activity would also not fall within the categories of trade, commerce or business. It is clear from the facts of the present case that the driving force is not the desire to earn profits but, the object of promoting trade and commerce not for itself, but for the nation - both within India and outside India. Clearly, this is a charitable purpose, which has as its motive the advancement of an object of general public utility to which the exception carved out in the first proviso to Section 2(15) of the said Act would not apply. We say so, because, if a literal interpretation were to be given to the said proviso, then it would risk being hit by Article 14 (the equality clause enshrined in Article 14 of the Consti....
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....was also the assurance given by the Finance Minister while introducing the Finance Bill 2008." 45. In case of Commissioner of Income Tax Jodhpur vs Jodhpur Development Authority (DB Income Tax Appeal No. 63/12 dated 5.07.2016), the Hon'ble Rajasthan High Court held as under: "27. From various decisions of the Hon'ble Supreme Court discussed hereinabove, the settled position of law emerges is that if the primary or predominant object of an institution is charitable, any other object which might not be charitable but which is ancillary or incidental to the dominant purpose, may be involving element of profit, would not prevent the institution from being a valid charitable trust. 28. In the backdrop of settled position of law discussed hereinabove, adverting to the facts of the present case, indubitably, JDA is a statutory body constituted and established under the provisions of Section 3 of JDA Act with a main object to secure the integrated development of Jodhpur Region and for that purpose to discharge inter alia the functions of Urban Planning including preparation of Master Development Plan and Zonal Development plans; formulation and sanction of the projects....
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.... charges and other similar charges and all money received by way of rents and profits or in any other manner or from any other source. A fortiori, as per the mandate of Section 54 of the JDA Act, all property funds and other assets vesting in the JDA shall be held and applied by it for the purposes and subject to the provisions of the Act. Suffice it to say that the entire funds of the JDA is mandatorily required to be utilized for discharging the functions to achieve the object of integrated development of Jodhpur Region Thus, predominant object of the JDA being to secure the integrated development of the Jodhpur Region which is undoubtedly falls within the expression 'advancement of any other objects of general public utility' within the definition of Section 2(15) of the Act of 1961 and therefore, on account of profit being earned by it through some of the activities, undertaken by it, which are ancillary or incidental to the main object of general public utility, it does not cease to be charitable in character so as to render it ineligible to claim registration under Section 12A read with Section 12AA of the Act of 1961. As a matter of fact, it is not even the case of t....
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....r; (v) the Chief Nursing Superintendent of the State Nursing Services, Rajasthan State; (vi) the Matron or the Nursing Superintendent, whoever is incharge of the Nurses Training, Mahatma Gandhi Hospital, Jodhpur; (vii) the Matron or the Nursing Superintendent, whoever is incharge of the Nursing Training at Sawai Mansingh Hospital, Jaipur; , (viii) the Matron or the Nursing Superintendent, whoever is incharge of Nurses Training, P.B. M. Women's Hospital, Bikaner, and (ix) the Matron or the Nursing Superintendent, whoever is incharge of Nurses Training General Hospital, Udaipur. (b) Members nominated by the State Government: (i) one Sister Tutor; (ii) one Public Health Nurse; (iii) one person representing the Railway Hospitals in the State of Rajasthan; (iv) one members of the Trained Nurses Association of India, who must be resident in the State of Rajasthan; (v) the Nursing Superintendent of Santokha Durlabhji Memorial Hospital, Jaipur; and (vi) one person representing the Medical institution controlled by the Ajmer Diocesan Corporation Limited. (2) The Council s....
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....es who are already in practice at the commencement of this Act and fulfil such conditions as may be prescribed. 14. Applications for registration- An application for registration by any of the persons mentioned in section 13 shall be made to the Registrar in the prescribed form and shall be accompanied with the prescribed fees. 15. Disposal of applications by Registrar- If the Registrar is satisfied, after holding in the prescribed manner such inquiry as he considers necessary, that the applicant for registration is entitled to be registered under section 13, he shall enter his name in the appropriate register. Provided that any application for registration made by a person whose case is not clearly governed by the provisions of this Act or of the rules, regulations or orders made thereunder may be referred for the decision of the Council. (2) If the Registrar is not satisfied as aforesaid, he shall make an order rejecting the application for registration and refund the fee paid with it. 19. Prohibition of registration etc. - (1) The Council may prohibit the registration of any person as a nurse, midwife, health visitor or auxiliary nurs....
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.... of a person whose name may have been entered in a register after the publication of a list under sub- section (1) and before the publication of a fresh list thereunder, a certified copy of such entry, signed by the Registrar, shall be evidence that such person is registered under this Act. 24. Powers of the Council. - The Council shall have and exercise, by making regulations and otherwise, the following powers, namely:- (1) to lay down the courses of training and to provide such training to nurses, midwives, health visitors and auxiliary nurse-midwives so as to qualify them for registration under this Act: (2) to prescribe the qualifying examinations for such registration: (3) to hold all or any of such examinations; (4) to specify the various titles, degrees, diplomas or certificates which shall qualify the holders thereof for registration under this Act; (5) to recognise educational or instructional institutions, schools, colleges for the purpose of training in basic as well as post certificate/post graduate nursing, midwifery, health visitors and auxiliary nursing-midwifery courses and to appoint examining bodies, for the p....
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....e applied for the purpose of this Act and the rules and regulations made thereunder." 48. On perusal of aforesaid provisions, we find that Section 12 talks about maintenance of registers of registered nurses, midwives, health visitors and auxiliary nurse midwives. Section 13 talks about the persons who are entitled to be registered. It talks about the persons who have undergone the course of training prescribed by the Council and have passed the prescribed examination held by the Council who shall be eligible for registration. It further talks about persons holding corresponding certificates by authorities in other states in India and even foreign Council if such certificates are recognized by the Indian Nursing Council. Section 14 talks about the persons seeking registration to apply to the Registrar in prescribed form along with prescribed fees and Section 15 talks about the registration of these persons and the powers of the Registrar to make enquires before he enters the name in the registers so maintained. Section 19 talks about the situations where the registration may be denied or where a person is already registered, to order for his name to be removed on account of prof....
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....ouncil Act, 1964 consisting of ex-officio members who are officials of the health department, namely, Director of Medical Services, Medical Superintendent, Nursing Superintendent and other health officials and comes under the administrative control of Medical and health department, Government of Rajasthan and its primary and the dominant purpose as reflected by conjoint reading of various obligatory functions is to regulate the medical profession of registered nurses, midwives, health visitors and auxiliary nurse midwives in the state of Rajasthan and to ensure that these persons have undergone requisite training and have passed the qualifying examination and hold the necessary degrees/certificates and thus eligible to practice as nurses, midwives, health visitors and auxiliary nurse midwives in their respective domains and services of such persons are thus available to the hospitals, nursing homes and public at large and qualify as involved in activities of general public utility and thus, charitable activities as so defined under section 2(15) of the Act. 51. Now, coming to the proviso to section 2(15), it is a settled position that the proviso applies only if an institution i....
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....s years. The applicant council is in receipt of direct Income comprising mainly registration fees, counselling fees, examination fees, Inspection fees, revaluation fees etc. Furthermore, the impugned receipts are forming predominant part of the total income in each of the years from F.Y 2015-16 to F.Y 2017-18. As such, the income which also describes its activities undertaken during the period from F.Y 2015-16 to F.Y 2017-18 is of the nature of General public Utility (GPU). Further, the direct income shown in the I&E accounts comprises mainly registration fees, counselling fees, examination fees, Inspection fees, revaluation fees etc are of the nature of Business/commercial Receipts. It is pertinent to state that the income from such commercial activities is forming 100% for F.Y. 2015-16, 100% for F.Y. 2016-17 & 100% for F.Y. 2017-18 which is more than 20% i.e. in contravention to the provisions laid down in 1st proviso to Section 2(15). Hence, the applicant fails condition (b) of the proviso. Further, such commercial activities are not incidental but are pre-dominant activity of the applicant. Hence, the assessee also fails condition (a) of the proviso. Therefore, as per the provi....
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....il. The test of carrying out the activities in the nature of trade, commerce or business is not satisfied in the instant case. As we have held above, the primary or dominant purpose of the assessee council is to regulate the medical profession of registered nurses, midwives, health visitors and auxiliary nurse midwives in the state of Rajasthan and to ensure that these persons have undergone requisite training and have passed the qualifying examination and hold the necessary degrees/certificates and thus eligible to practice as nurses, midwives, health visitors and auxiliary nurse midwives in their respective domains and services of such persons are thus available to the hospitals, nursing homes and public at large. Where as part of rendering of such activities, it recovers certain nominal fees to meet its operational and administrative expenses, the same will not disqualify it from being involved in activities of general public utility as the Courts have held that the proviso to section 2(15) does not seek to disqualify charitable organization covered by the last limb, when certain reasonable/nominal fee is collected from the beneficiaries in the course of activity which is not a ....