TaxTMI 
TaxTMI 
2023 (9) TMI 93
X X X X Extracts X X X X
X X X X Extracts X X X X
....ngaged in the "Charitable purpose" of education, and that its activities fall under "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. 4. The petitioner craves the right to add, alter, modify or amend in any manner the grounds of appeal on or before the hearing. 2. The brief facts of the case are that the assessee Rajasthan Para-Medical Council is established by an Act of State Legislature with the aim to develop, promote and regulate education in para-medical courses and mainly carrying out the functions as prescribed under section 13 of the RPMC Act, 2008 which includes (i) to promote innovations, research and development in establishment of new Para- medical subjects in the Schedule; (ii) to formulate schemes for promoting Para- medical education; (iii) to lay down norms and standards for courses, curricula, physical and instructional facilities, staff pattern, staff qualifications, quality instructions, assessment; (iv) examination in Para-medical edu....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Para medical Council Act, 2008 with the primary objective to develop, promote and regulate the Para-medical education and profession in the state of Rajasthan. It also aims for the recognition of institutions under its control and supervision in a systematic manner for imparting education or training in Para Medical subjects in the state and for matters connected therewith or incidental thereto. The aim of the Council is also to promote innovations, research & development in Para-Medical subjects and establishment of new Para-Medical subjects. The Rajasthan Para-Medical Council is formulating schemes for promoting Para-Medical education and promoting an effective link between Para-Medical education and medical education. 2. The major functions of the Appellant are: i. Proscribing syllabus and curriculum for various para-medical courses ii. Conducting qualifying examination for the courses iii. Registration and granting certificate to qualified persons to practice their profession. ( to serve the Public Health under qualified and trained hands and mindsets) iv. Granting recognition to the training institutions and inspection the....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... in the Schedule; (vii) to recommend to the State Government to include new para- medical subjects in the Schedule; (viii) to formulate schemes for promoting Para-medical education; (ix) to promote an effective link between para-medical education and medical education, and to promote research and development in Para- medical subjects; (x) to lay down norms and standards for courses, curricula, physical and instructional facilities, staff pattern, staff qualifications, quality instructions, assessment and examination in Para-medical education; (xi) to fix norms and guidelines for institutional charges and other fees; (xii) to recognize the institutions conducting courses in Para-medical subjects; (xiii) to provide guidelines for admission of student to Para-medical institutions imparting Para-medical education; (xiv) to inspect or cause to be inspected any Para-medical institution; (xv) to constitute a board for conducting the examination in Para- medical subjects so as to maintain uniformity of standards; and (xvi) to perform such other functions as may be prescribed by rules. The Cou....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... in nature as it is predominantly carrying out functions of a Regulatory Body consisting of maintenance of Registers of registered para- medical professionals and annual publication of names there of, recognition of para-medical institutions and approval for conduction of any course in para-medical subjects but does not train/ educate/ disseminate knowledge. The applicant is therefore not engaged in the "charitable purpose" of education, and hence its activities fall under "General Public Utility" thereby attracting Proviso to Sec. 2(15)." The above finding with the relevant paras of the order, itself settle the issue that it is a regulatory body, conduct exam, prescribe courses and recognize institution for education and training for which the regular inspections are made by which it provide the education in a systematic manner. Further it accepts that it is a GPU where by applying the proviso, the registration is denied. Further the case law referred is fundamentally applied on wrong interpretation without going to the facts of the case that it is established education Institution by an Act itself and provide and promote the education in a systematic manner. The said cas....
X X X X Extracts X X X X
X X X X Extracts X X X X
....emption as educational institution, where they cannot provide education without affiliation and all exams are held by the Council. Here we would like to categorically mention that the Appellant Council is providing education at each level directly under its supervision and control in a systematic manner, and also to regulate the educational institutions to implement the Educational Policy of the State. Further, it is also important to mention that the affiliated institutions of the Council are provided registration as Charitable institution under the limb of 'Education'. The Honorable Supreme Court in the case of Assam State Text Book Production and Publication Corporation Ltd. has mentioned in the similar circumstances that State - controlled Educational Committees/Boards had been constituted to implement the educational policy of the States and consequently they should be treated as educational institutions. There is no system of distribution of surplus in the Council and the surplus have to be utilized only for the purposes of the Council. The acid test to determine whether any institution is constituted for the purpose of earning profit or ch....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cation' has assumed greater role and significance, then ever. Education has got pivotal role in evolution of a society. Therefore, keeping this crucial aspect in mind, the legislature in its wisdom had decided to place this activity within the definition clause of the term "charitable purpose", as per section 2(15) of the Income-tax Act, wherein it has been specifically mentioned that the term 'charitable purpose' includes .... "education" .... Thus, the very activity of education itself has been included within the meaning of the term 'charitable purpose'. It may further be seen that activity of imparting "education" has been specifically included in the definition, thus showing that the intention of the legislature, very clearly, is to promote education, which is further fortified by the fact that when the first proviso was inserted to section 2(15), the activity of 'education' was not covered therein and only other object of general public utility alone was covered therein. The first proviso was brought in to curtail the scope of 'charitable purpose' with respect to the activities of general public utility, by excluding the same from this defi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f Honorable Rajasthan High Court in CIT vs. Rajasthan State Text Book Board (2000) 113 Taxman 204 (Raj.) wherein it has been held as under:- "It could be seen from the orders of the Commissioner (Appeals) as well as the tribunal that, in a similar situation, in the case of Tamil Nadu Text Book Society, the CBDT, as per the letter dt. 19.8.1975 and F.No.1 84/26 of 1975, stated that the Tamil Nadu Text Book Society was an educational institution, existing solely for the purpose of education, within the meaning of Sec.10(22). It was not disputed that the aims and objects of the Tamil Nadu Text Book Society and those of the assessee were almost identical. It was also not shown that the surplus amount, if any, of the assessee, was used for any other purpose or distributed to other members. The Commissioner (Appeals) as well as the Tribunal had noticed that even if some amount remained surplus, that was utilised only for the purposes of education. Thus, having regard to the concurrent finding of act recorded by the Commissioner (Appeals) and the tribunal has also taking note of the letter of the CBDT itself, it was not possible to say that the order of the tribunal was erroneous....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e term 'education' as has been envisaged u/s 2(15) of the Act and we hold so." 9. The Honorable Allahabad High Court in the case of Katra Educational Society v. ITO [1978] 111 ITR 420 (All.) has held that "The word "institution" has not been defined in the Act. There is no reason why an educational society cannot be regarded as an educational institution if that educational society is running educational institution or institutions. The Income-tax Officer has placed too narrow a construction on section 10(22) of the Act and the interpretation placed by him is manifestly erroneous." 10. The above principle was further approved by the Honorable Supreme Court in the case of Aditanar Educational Institution vs. Addl. CIT, where the Honorable Supreme Court has held that "Counsel for the Revenue mainly stressed the plea that the exemption under section 10(22) of the Act would apply only to educational institutions as such. According to him, in this case, the assessee might be financing for running an educational institution, but it is not itself an educational institution. As noted earlier, the Tribunal held that the assessee was an institution existing for educ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n noted that the appellant has applied for the registration w.e.f FY 2019-20 under section 12A, which was rejected on the ground that the revenue earned by the Council is from commercial activities. The Council is established under an Act by the State Government for Para-medical education and to promote, develop and regulate the same for the welfare of the society and the public health, with no intent of any business. It has been noted that the surplus is not distributed and only utilized for the activities and the fees/charges are decided in consultation with the State Government at normal level looking to the welfare of the public. The Ld CIT (Exemption) in his order has mentioned that the receipts are from examination fees, registration fees, revaluation fees, inspection fees and counseling fees, which are commercial in nature whereas apparently such receipts are from the key services for education only. In this way the contents are contradictory neither it has been brought on record that they are abnormally high with an intent to earn profit on commercial lines nor the same has been established that how they are not related to education in the instant case. In view of the argum....