VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S,A JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRA M SINGH YADAV, AM VK;DJ VIHY LA- @ ITA NO. 1283/JP/2019 RAJASTHAN NURSING COUNCIL B-39, SARDAR PATEL MARG, C-SCHEME, JAIPUR. CUKE VS. THE CIT (EXEMPTIONS) JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAAAR 8632 E VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI TARUN AGARWAL (C.A.) & SHRI SHYAM LAL AGARWAL (CA) JKTLO DH VKSJ LS @ REVENUE BY : SHRI AMRISH BEDI (CIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 05/06/2020 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 01/09/2020 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(E), JAIPUR DATED 30.09.2019 WHEREIN THE ASSESSE E HAS TAKEN THE FOLLOWING GROUNDS OF APPEALS:- 1.THE LEARNED COMMISSIONER OF INCOME TAX (EXEMPTIO NS), JAIPUR HAS ERRED IN LAW AS WELL IN FACTS IN REJECTING THE APPL ICATION OF RAJASTHAN NURSING COUNCIL FOR SEEKING REGISTRATION U/S 12AA O F THE INCOME TAX ACT, 1961 AND HOLDING THAT THE APPLICANT SOCIETY CA NNOT BE HELD AS CHARITABLE WITHIN THE MEANING OF SEC.2(15) OF THE I NCOME -TAX ACT, 1961. 2. THE LEARNED COMMISSIONER OF INCOME TAX (EXEMPTIO NS), JAIPUR HAS ERRED IN LAW AS WELL AS IN FACTS HOLDING THAT THE C OUNCIL IS NOT ENGAGED IN THE CHARITABLE PURPOSE OF EDUCATION, AND THAT ITS ACTIVITIES FALL UNDER GENERAL PUBLIC UTILITY THEREBY ATTRACTING PROVISO TO SEC. 2(15). ITA NO. 1283/2019 RAJASTHAN NURSING COUNCIL VS. CIT(E) 2 3. THE LEARNED COMMISSIONER OF INCOME TAX (EXEMPTIO NS), JAIPUR HAS ERRED IN LAW AS WELL AS IN FACTS IN NOT PROVIDING P ROPER OPPORTUNITY OF BEING HEARD TO THE APPELLANT BEFORE PASSING THE ORD ER. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE-COUNCIL FILED AN APPLICATION IN FORM NO. 10A FOR SEEKING REGISTRATIO N U/S 12AA OF THE IT ACT. ON RECEIPT OF THE APPLICATION AND AFTER GOING THROU GH 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 APPLICANTCOUNCIL IS IN RECEIPT OF DIRECT INCOME COMPRISING MAINLY REGISTRA TION FEES, COUNSELING FEES, EXAMINATION FEES, INSPECTION FEES, REVALUATION FEES WHICH FORM FOREMOST PART OF THE TOTAL INCOME IN EACH YEAR STATING FROM F.Y 2 015-16 TO F.Y 2017-18. IT WAS FURTHER STATED THAT THE SAID INCOME ALSO DESCRI BES THE ACTIVITIES UNDERTAKEN BY THE APPELLANT-COUNCIL DURING THE SAID PERIOD WHICH IS IN THE NATURE OF GENERAL PUBLIC UTILITY AND CANNOT BE TE RMED AS CHARITABLE UNDER THE HEAD EDUCATION. FURTHER, THE LD CIT(E) REFERRING TO THE PROVISO TO SECTION 2(15) OF THE ACT, STATED THAT WHERE THE ASSESSEE IS ENGAGED IN CHARITABLE ACTIVITIES UNDER GENERAL PUBLIC UTILITY THEN IT HAS TO COMPLY WITH PROVISO TO SECTION 2(15) OF THE ACT. IT WAS STATED BY THE LD. CIT(E) THAT WHILE DECIDING THE CASE WHERE THE BUSINESS ACTIVITIES ARE VISIBLE, THE PREDOMINANT OBJECT TEST IS TO BE APPLIED AND ALSO THE BUSINESS ACTIVITIES S HOULD BE IN THE COURSE OF ACTUAL CARRYING OUT OF SUCH GENERAL PUBLIC UTILITY I.E. SUCH BUSINESS ACTIVITIES SHOULD ONLY BE INCIDENTAL TO THE CHARITABLE OBJECT AND HENCE SHOULD NOT BE THE PREDOMINANT OR PRIMARY ACTIVITIES BY ITSELF. ACCORD INGLY, A SHOW CAUSE WAS ISSUED TO THE ASSESSEE COUNCIL AS TO HOW IMPUGNED R ECEIPTS ARE CHARITABLE RECEIPTS IN THE LIGHT OF PROVISO TO SECTION 2(15) A ND THE ACTIVITIES UNDERTAKEN SHALL BE ASSUMED AS CHARITABLE IN NATURE AND TO EXP LAIN WHY THE APPLICATION FILED BY YOU SHOULD NOT BE REJECTED. IN RESPONSE, T HE ASSESSEE COUNCIL FILED ITS SUBMISSION CONTENDING THAT FIRSTLY, IT IS AN EDUCAT IONAL INSTITUTION AND SECONDLY, PREDOMINANT OBJECT BEING CHARITABLE IN NA TURE, PROVISO TO SECTION 2(15) IS NOT APPLICABLE. THE REPLY SO FILED BY THE ASSESSEE-COUNCIL WAS ITA NO. 1283/2019 RAJASTHAN NURSING COUNCIL VS. CIT(E) 3 CONSIDERED HOWEVER, THE SAME WAS NOT FOUND ACCEPTAB LE AND THE LD. CIT(E) REJECTED THE APPLICATION OF THE ASSESSEE-COUNCIL W ITH FOLLOWING FINDINGS WHICH ARE CONTAINED AT PARA 3.1 OF HIS ORDER WHICH READ A S UNDER:- 03. BASED ON ABOVE DISCUSSION, IT IS CLEAR THAT TH E ACTIVITIES OF THE APPLICANT SOCIETY ARE NOT CHARITABLE IN NATURE AS I T IS PREDOMINANTLY CARRYING OUT FUNCTIONS OF A REGULATORY BODY CONSIST ING OF REGISTERING NURSES, MIDWIVES, HEALTH VISITORS & AUXILIARY NURSE -MIDWIVES, RECOGNIZE EDUCATIONAL OR INSTRUCTIONS, SCHOOLS, COL LEGES FOR THE PURPOSE OF TRAINING AND TO APPOINT EXAMINATION BODI ES, LAY DOWN COURSES OF TRAINING BUT DOES NOT TRAIN/ EDUCATE/ DI SSEMINATE KNOWLEDGE. THE APPLICANT IS THEREFORE NOT ENGAGED I N THE 'CHARITABLE PURPOSE' OF EDUCATION, AND HENCE ITS ACTIVITIES FAL L UNDER 'GENERAL PUBLIC UTILITY' THEREBY ATTRACTING PROVISO TO SEC. 2(15). THE SAID PROVISO CLEARLY STATES THAT SUCH ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY SHALL NOT BE A CHARITABLE PU RPOSE IF THE ASSESSEE FAILS THE CONDITIONS LAID DOWN IN THE PROVISO. IN T HE CASE OF THE ASSESSEE, IT HAS BEEN SHOWN ABOVE THAT IT FAILS ON ALL CONDITIONS IN THE PROVISO. HENCE, THE APPLICANT SOCIETY CANNOT BE HEL D AS CHARITABLE WITHIN THE MEANING OF SEC. 2(15) OF THE INCOME-TAX ACT, 1961. BASED ON ABOVE, I AM SATISFIED THAT THE APPLICANT TRUST I S 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 SUBMITT ED THAT THE ASSESSEE, RAJASTHAN NURSING COUNCIL (RNC) WAS SET UP BY THE STATE GOVERNMENT UNDER THE RAJASTHAN NURSING, MIDWIVES, HEALTH VISITORS AN D AUXILIARY NURSE MIDWIVES REGISTRATION ACT. NO. 9 OF 1964, PUBLISHED IN THE R AJASTHAN 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 DIREC TLY GOVERNED BY THE STATE GOVERNMENT UNDER THE DEPARTMENT OF MEDICAL AND HEAL TH. IT WAS SUBMITTED THAT THE QUALIFICATIONS OFFERED BY THE RAJASTHAN NU RSING COUNCIL ARE GENERAL ITA NO. 1283/2019 RAJASTHAN NURSING COUNCIL VS. CIT(E) 4 NURSING, MIDWIFERY, AUXILIARY NURSING MIDWIFERY AND HEALTH VISITORS, DULY RECOGNIZED BY THE INDIAN NURSING COUNCIL INCORPORAT ED UNDER THE INDIAN NURSING COUNCIL ACT, 1947. IT WAS SUBMITTED THAT TH E MAJOR FUNCTIONS OF THE RNC AS PER THE ACT ARE AS UNDER: I. PRESCRIBING SYLLABUS AND CURRICULUM FOR VARIOUS NUR SING COURSES II. CONDUCTING QUALIFYING EXAMINATION FOR THE COURSES III. REGISTRATION AND GRANTING CERTIFICATE TO QUALIFIED PERSONS TO PRACTICE THEIR PROFESSION. IV. GRANTING RECOGNITION TO THE TRAINING INSTITUTIONS A ND PERIODICAL INSPECTION THERE ON, AS THE COUNCIL IS GOVERNING AU THORITY OF PHYSICAL AND CLINICAL FACILITIES IN ALMOST ALL THE NURSING C OURSES CONDUCTED IN THE INSTITUTION. 5. IT WAS FURTHER SUBMITTED THAT AS PER SECTION 24 OF THE ACT, THE COUNCIL HAS BEEN EMPOWERED TO CARRY OUT THE FOLLOWING ACTIV ITIES: (I) LAY DOWN THE COURSES OF TRAINING AND TO PROVIDE SUCH TRAINING TO NURSES, MIDWIVES, HEALTH VISITORS AND AUXILIARY NUR SE-MIDWIVES SO AS TO QUALIFY THEM FOR REGISTRATION UNDER THE ACT. (II) TO PRESCRIBE THE QUALIFYING EXAMINATIONS (III) TO HOLD ALL OR ANY OF SUCH EXAMINATION (IV) TO SPECIFY THE VARIOUS TITLES, DEGREES, DIPLOM AS OR CERTIFICATES (V) TO RECOGNIZE EDUCATION OR INSTRUCTIONAL INSTITU TIONS, SCHOOL, COLLEGES ETC FOR THE PURPOSE OF TRAINING (VI) TO LAY DOWN THE CONDITIONS ON WHICH SUCH RECOG NITION MAY BE MADE. 6. IT WAS SUBMITTED THAT THE COUNCIL CONSISTS OF TH E FOLLOWING MEMBERS WHICH ARE THE EMPLOYEES OF THE STATE GOVERNMENT, NA MELY: A) EX-OFFICIO MEMBERS I) THE DIRECTOR OF MEDICAL AND HEALTH SERVICES, RAJAST HAN STATE; ITA NO. 1283/2019 RAJASTHAN NURSING COUNCIL VS. CIT(E) 5 II) THE DEPUTY DIRECTOR OF MEDICAL AND HEALTH SERVICES. RAJASTHAN STATE; III) THE MEDICAL SUPERINTENDENT SMS HOSPITAL, JAIPUR; IV) THE ASSISTANT DIRECTOR OF MEDICAL AND HEALTH SERVIC ES, IN-CHARGE MATERNITY AND CHILD WELFARE, RAJASTHAN STATE; V) THE CHIEF NURSING SUPERINTENDENT OF THE STATE NURSI NG SERVICES, RAJASTHAN STATE; VI) THE MATRON OR THE NURSING SUPERINTENDENT, WHOEVER I S INCHARGE OF THE NURSE TRAINING, MAHATMA GANDHI HOSPITAL, JOD HPUR; VII) THE MATRON OR THE NURSING SUPERINTENDENT, WHOEVER I S INCHARGE OF THE NURSE TRAINING AT SMS HOSPITAL, JAIPUR VIII) THE MATRON OR THE NURSING SUPERINTENDENT, WHOEVER I S INCHARGE OF THE NURSE TRAINING AT P.B.M. WOMENS HOSPITAL, B IKANER AND IX) THE MATRON OR THE NURSING SUPERINTENDENT, WHOEVER I S INCHARGE OF THE NURSE TRAINING GENERAL HOSPITAL, UDAIPUR. B) THE STATE GOVERNMENT HAS FURTHER POWER TO NOMINATE SIX NOMINEES 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 A S THEY HOLD THE OFFICE BY VIRTUE OF WHICH HE IS A MEMBER OF THE COUNCIL. IT W AS 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 10T H APRIL 2019 REGARDING ESTABLISHMENT MATTER FROM THE MEDICAL & HEALTH DEPA RTMENT, GOVERNMENT OF RAJASTHAN (ADMINISTRATIVE DEPARTMENT OF THE COUNCIL ), IT IS CLARIFIED THAT THE STATE GOVERNMENT HAS CREATED AND SUBSCRIBED THE COU NCIL AND FIX THE VARIOUS FEES/CHARGES TO COVER THE NORMAL EXPENDITURE ON OPE RATION AND DEVELOPMENT OF THE AMENITIES/ INFRASTRUCTURE TO SERVE THE SOCIE TY IN BETTER MANNER. IT IS ITA NO. 1283/2019 RAJASTHAN NURSING COUNCIL VS. CIT(E) 6 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 SO LE RECOGNIZED BODY TO REGULATE THE PROFESSION OF NURSING, MIDWIVES, HEALT H VISITORS AND AUXILIARY NURSE MIDWIVES IN THE STATE OF RAJASTHAN THROUGH QU ALIFICATION COURSES. 10. IT WAS SUBMITTED THAT AS PER SECTION 32 OF THE ACT, THE STATE GOVERNMENT HAS THE POWER TO DISSOLVE THE COUNCIL. I T IS ALSO VERY CLEAR THAT BEING 100% GOVERNMENT ENTITY, AFTER DISSOLUTION THE ASSETS OF THE COUNCIL WILL VEST IN THE GOVERNMENT OF RAJASTHAN. 11. IN VIEW OF THE ABOVE IT WAS SUBMITTED THAT THE COUNCIL IS ESTABLISHED, OWNED AND CONTROLLED BY THE STATE GOVERNMENT FOR NU RSING EDUCATION AND REGULATION WITH NO INTENT OF PROFIT AND TO PROMOTE NURSING EDUCATION FOR THE WELFARE OF THE SOCIETY. 12. IT WAS FURTHER SUBMITTED THAT THE LD CIT(E) IN HIS ORDER HAS ACCEPTED THAT THE COUNCIL IS PREDOMINANTLY CARRYING OUT FUN CTIONS OF A REGULATORY BODY CONSISTING OF REGISTERING NURSES, MIDWIVES, HEALTH VISITORS & AUXILIARY NURSE- MIDWIVES, RECOGNIZE EDUCATIONAL OR INSTRUCTIONS, SC HOOLS, COLLEGES FOR THE PURPOSE OF TRAINING AND TO APPOINT EXAMINATION BODI ES LAY DOWN COURSES OF TRAINING ETC BUT AT THE SAME TIME, THE LD CIT(E) H AS CONTRADICTED HIMSELF BY SAYING THAT THE PREDOMINANT PURPOSE OF THE COUNCIL IS CARRYING ON ANY TRADE, COMMERCE OR BUSINESS AND THE PROVISO TO SECTION 2(1 5) IS APPLICABLE. IT WAS SUBMITTED THAT IT IS WELL ESTABLISHED THAT THE INST ITUTION WHERE THE PREDOMINANT OBJECT IS CHARITABLE, THE PROVISO TO SECTION 2(15) IS NOT APPLICABLE UPON IT. THIS ITA NO. 1283/2019 RAJASTHAN NURSING COUNCIL VS. CIT(E) 7 PRINCIPLE HAS ALSO BEEN CONFIRMED BY VARIOUS JUDGME NTS OF TRIBUNALS, HIGH COURTS AND THE SUPREME COURT. 13. IT WAS FURTHER SUBMITTED THAT THE LD CIT(E) HAS CLEARLY ADMITTED AND CONFIRMED THAT THE CORE AREA OF ACTIVITIES PERFORME D BY THE COUNCIL ARE MAINTENANCE OF REGISTERS OF REGISTERED NURSES, MIDW IVES, HEALTH VISITORS & AUXILIARY NURSE-MIDWIVES AND ANNUAL PUBLICATION OF NAMES THEREOF, TO LAY DOWN THE COURSES OF TRAINING, TO PRESCRIBE THE QUAL IFYING EXAMINATIONS, SPECIFY THE VARIOUS TITLE, DEGREES, DIPLOMAS OR CERTIFICATE S & RECOGNIZE EDUCATIONAL OR INSTRUCTIONS, SCHOOLS, COLLEGES FOR THE PURPOSE OF TRAINING AND TO APPOINT EXAMINATION BODIES. IT WAS UNDISPUTEDLY HELD THAT T HE COUNCIL IS ONLY A REGULATORY BODY AND PREDOMINANTLY THERE IS NO PROFI T MOTIVE. IT WAS SUBMITTED THAT THE ACTIVITIES PERFORMED BY THE COUN CIL ARE AS PER THE ACT AND THE CORE ACTIVITIES UNDERTAKEN BY THE COUNCIL ARE T OWARDS ACHIEVING THEIR PREDOMINANT OBJECT OF EDUCATION. FURTHER, IT WAS SU BMITTED 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 EDUCATION AL INSTITUTIONS AND TO IMPLEMENT THE EDUCATIONAL POLICY OF THE STATE AND T HE FACTS AND CIRCUMSTANCES OF THE CASE OF LOK SIKSHANA SANSTHAN AND BAR COUNCI L OF MAHARASHTRA ARE CONCEPTUALLY DIFFERENT FROM THE FACTS OF THE PRESEN T CASE. 14. IT WAS FURTHER SUBMITTED THAT THE LD. CIT(E) HA S CONTRADICTED HIS EARLIER FINDINGS BY WRONGLY TERMING THE RECEIPTS FROM REGIS TRATION FEES, COUNSELING FEES, EXAMINATION FEES, INSPECTION FEES, REVALUATIO N 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 INS TITUTION. THE LEARNED CIT HAS FAILED TO MENTION THE FACT THAT THE RECEIPTS ARE FR OM THE EDUCATIONAL ACTIVITIES AND ARE NOT COMMERCIAL RECEIPTS. THE PREDOMINANT OB JECT OF THE COUNCIL IS EDUCATION AND NOT EARNING PROFITS. ITA NO. 1283/2019 RAJASTHAN NURSING COUNCIL VS. CIT(E) 8 15. IT WAS SUBMITTED THAT THE COUNCIL IS AN EDUCATI ONAL 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 APPLI CABLE UPON THE COUNCIL. 16. IT WAS SUBMITTED THAT THE COUNCIL IS A STATE - CONTROLLED EDUCATIONAL BODY CONSTITUTED TO EDUCATE AND IMPLEMENT THE EDUCA TIONAL POLICY OF THE STATES AND IT IS FUNCTIONING AS AN EDUCATIONAL INST ITUTION. THE FUNCTIONS OF THE COUNCIL ARE ON SIMILAR FOOTING AS OTHER PROFESSIONA L COUNCILS WHICH CONDUCT AND REGULATES PROFESSION LIKE MEDICAL COUNCIL OF IN DIA, INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA, INSTITUTE OF COMPANY SECRETAR Y OF INDIA ETC. 17. IT WAS SUBMITTED THAT SECTION 26 OF THE ACT EMP OWERS THE COUNCIL TO HOLD THE QUALIFYING EXAMINATION FOR WHICH THEY MAY HAVE BEEN RECOGNIZED AND TO ISSUE SUCH CERTIFICATES AS MAY BE SPECIFIED IN T HE ORDER OF THEIR RECOGNITION. FURTHER, SECTION 29 OF THE ACT EMPOWERS THE COUNCIL : (1) TO CALL INFORMATION FROM INSTITUTION AND REQ UIRE THEM: (A) TO FURNISH REPORTS, RETURNS OR OTHER INFORMATION AS THE COUNCIL MAY REQUIRED TO ENABLE IT TO JUDGE OF THE EFFICIENC Y OF THE INSTITUTION OR TRAINING GIVEN THEREIN, AND (B) TO PROVIDE FACILITIES TO ENABLE ANY MEMBER OF THE C OUNCIL (DEPUTED BY THE COUNCIL) TO BE PRESENT AT THE EXAMI NATION TO BE HELD BY ANY SUCH INSTITUTION (2) TO INSPECT ANY SUCH INSTITUTION AND MAY FOR THE PURPOSE APPOINT A SUB-COMMITTEE OF NOT LESS THAN THREE OR MORE THAN F IVE MEMBERS OF THE COUNCIL TO INSPECT THE SAME AND SUBMIT A REPORT IN REGARD THERE UNDER AND PROVIDE THE MODE OF THEIR PAYMENT 18. IT WAS SUBMITTED THAT THE PROVISIONS OF THESE S ECTIONS CLEARLY STATES THAT THE COUNCIL IS A STATUTORY BODY MEANT FOR THE REGUL ATION AND FOR THE PROPER EDUCATION AND TRAINING OF NURSES, MIDWIVES, HEALTH VISITORS AND AUXILIARY ITA NO. 1283/2019 RAJASTHAN NURSING COUNCIL VS. CIT(E) 9 NURSE-MIDWIVES, AS THEIR PRE-DOMINANT OBJECTIVE. TH E COUNCIL ACTS AS A CONTROLLER TO THE INSTITUTIONS PROVIDING THE KNOWLE DGE AND TRAINING TO THE ASPIRANTS WHO WANTS THE QUALIFICATION IN THE FIELD OF NURSING, MIDWIFERY, HEALTH VISITOR AND AUXILIARY NURSING-MIDWIFERY. 19. IT WAS SUBMITTED THAT SECTION 25 OF THE ACT EMP OWERS THE STATE GOVERNMENT TO PROHIBIT UNREGISTERED NURSES, MIDWIVE S, HEALTH VISITORS AND AUXILIARY NURSE-MIDWIVES. 20. IT WAS SUBMITTED THAT THE COUNCIL IS PROVIDING AFFILIATION FOR THE PURPOSE OF RECOGNIZING THOSE INSTITUTION TO CARRY TRAINING AND EDUCATION OF NURSES, MIDWIVES, HEALTH VISITORS AND AUXILIARY NURSE-MIDWI VES, WHICH THE PREDOMINANT OBJECT OF THE COUNCIL AND NOT TO EARN REVENUE FROM AFFILIATION. THE COUNCIL PROVIDES 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 INSTITUTIO N AFFILIATED WITH THE COUNCIL ARE TREATED AND GRANTED EXEMPTION AS EDUCATIONAL INSTIT UTION, 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 HONBLE SUPREME COURT IN THE CASE OF SO LE 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 MEANIN G OF EDUCATION. WHAT EDUCATION CONNOTES IS SYSTEMATIC INSTRUCTION BY W AY OF NORMAL SCHOOLING. HERE WE WOULD LIKE TO MENTION THAT THE COUNCIL, AS PER THE ACT FOLLOW AND HAVE SYSTEMATIC INSTRUCTION FOR NURSING EDUCATION A ND ALSO TO REGULATE THE EDUCATIONAL INSTITUTIONS TO IMPLEMENT THE EDUCATION AL POLICY OF THE STATE. ITA NO. 1283/2019 RAJASTHAN NURSING COUNCIL VS. CIT(E) 10 22. IT WAS SUBMITTED THAT THE HONBLE SUPREME COURT IN THE CASE OF ASSAM STATE TEXT BOOK PRODUCTION AND PUBLICATION CORPORAT ION LTD. REPORTED IN (2009) 319 ITR 317 HAS MENTIONED IN THE SIMILAR CIR CUMSTANCES THAT STATE CONTROLLED EDUCATIONAL COMMITTEES/BOARDS HAD BEEN C ONSTITUTED TO IMPLEMENT THE EDUCATIONAL POLICY OF THE STATES AND CONSEQUENT LY THEY SHOULD BE TREATED AS EDUCATIONAL INSTITUTIONS. 23. NOW COMING TO SECOND CONTENTION THAT THE PREDOM INANT OBJECT OF THE COUNCIL IS EDUCATION AND THE PROVISO TO SECTION 2(1 5) OF THE INCOME TAX ACT IS NOT APPLICABLE UPON THE COUNCIL, OUR REFERENCE WAS DRAWN TO SECTION 2(15) WHICH DEFINES THE CHARITABLE PURPOSE AND READS AS U NDER: CHARITABLE PURPOSE INCLUDES RELIEF OF THE POOR, E DUCATION, MEDICAL RELIEF,PRESERVATION OF ENVIRONMENT (INCLUDING WATER SHEDS, FORESTS AND WILDLIFE) AND RESERVATION OF MONUMENTS OR PLACES OR OBJECTS OR ARTISTIC OR HISTORIC INTEREST, AND THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY. PROVIDED THAT THE ADVANCEMENT OF ANY OTHER OBJECT O F GENERAL PUBLIC UTILITY SHALL NOT BE A CHARITABLE PURPOSE, IF IT IN VOLVES THE CARRYING ON OF ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BU SINESS, OR ANY ACTIVITY OF RENDERING ANY SERVICE IN RELATION TO AN Y TRADE, COMMERCE OR BUSINESS, FOR A CESS OR FEE OR ANY OTHER CONSIDERAT ION, IRRESPECTIVE OF THE NATURE OF USE OR APPLICATION, OR RETENTION, OF THE INCOME FROM SUCH ACTIVITY.' 24. IT WAS SUBMITTED THAT THE PROVISO TO SECTION 2( 15) MAKES IT CLEAR THAT IF THE ASSESSEE IS ENGAGED IN CHARITABLE ACTIVITIES UN DER GENERAL PUBLIC UTILITY (GPU) THEN IT HAS TO COMPLY WITH THE PROVISO MENTIO NED IN SECTION 2(15) OF THE INCOME-TAX ACT. THE PROVISO TO SECTION 2(15) WA S INSERTED TO KEEP A CHECK ON THE ENTITIES WHO HAVE OTHER OBJECTS OF GPU AND WHO USE OBJECT OF GPU AS A MASK OR A DEVICE TO HIDE THE TRUE PURPOSE WHICH IS TRADE, COMMERCE ITA NO. 1283/2019 RAJASTHAN NURSING COUNCIL VS. CIT(E) 11 OR BUSINESS OR THE RENDERING OF ANY SERVICES IN REL ATION TO TRADE, COMMERCE OR BUSINESS. 25. THE ABOVE PROVISO TO SECTION 2(15) WAS AMENDED BY THE FINANCE ACT, 2015 W.E.F 01.04.2016. IN THIS AMENDMENT, TWO CONDI TIONS HAVE BEEN INSERTED FOR THE CASE OF GPU WHO ARE ENGAGED IN THE ACTIVITY IN THE NATURE OF TRADE COMMERCE AND BUSINESS. THESE ARE: (A) SUCH ACTIVITI ES ARE UNDERTAKEN IN THE COURSE OF ACTUAL CARRYING OUT OF SUCH ADVANCEMENT O F ANY OTHER OBJECT OF GPU AND (B) THE AGGREGATE RECEIPTS FROM SUCH ACTIVITY O R ACTIVITIES DURING THE PREVIOUS YEAR DO NOT EXCEED 20% OF THE TOTAL RECEIP T OF THE TRUST OR INSTITUTION UNDERTAKING SUCH ACTIVITY OR ACTIVITIES OF THAT PRE VIOUS YEAR. 26. THE EXPLANATORY NOTE TO THE AMENDMENT READ AS U NDER: EXPLANATORY NOTE TO FINANCE ACT, 2015 - IN SO FAR AS THE ADVANC EMENT OF ANY OTHER OBJECT OF GPU IS CONCERNED, THERE IS A NEED TO ENSURE APPR OPRIATE BALANCE BEING DRAWN BETWEEN THE OBJECT OF PREVENTING BUSINESS ACT IVITY IN THE GARB OF CHARITY AND AT THE SAME TIME PROTECTING THE ACTIVIT IES 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 SHOU LD BE IN THE COURSE OF ACTUAL CARRYING OUT OF SUCH GPU ACTIVITIES I.E. SUCH BUSIN ESS ACTIVITIES SHOULD ONLY BE INCIDENTAL TO THE CHARITABLE OBJECT AND HENCE SHOUL D NOT BE THE PRE-DOMINANT OR PRIMARY ACTIVITY BY ITSELF. 28. IT WAS SUBMITTED THAT IT IS NOW A WELL ESTABLIS HED LAW THAT WHERE THE PREDOMINANT OBJECTS ARE CHARITABLE, THE PROVISO TO SECTION 2(15) OF THE INCOME TAX, 1961 IS NOT APPLICABLE. IT WAS SUBMITTE D THAT THE PURPOSE OF THE CENTRAL/STATE GOVERNMENTS IS TO SAFEGUARD THE INTER EST OF GENERAL PUBLIC. WHERE A GOVERNMENT BODY IS CONSTITUTED TO IMPART ED UCATION, IT CANNOT BE ITA NO. 1283/2019 RAJASTHAN NURSING COUNCIL VS. CIT(E) 12 PRESUMED THAT THE PURPOSE OF CONSTITUTING SUCH INST ITUTION IS TO EARN PROFIT. IT WAS SUBMITTED THAT THE VARIOUS COURTS AND TRIBUNALS HAVE ALSO HELD THAT WHERE THE PREDOMINANT OBJECT IS CHARITABLE, THE PRO VISO TO SECTION 2(15) OF THE INCOME TAX ACT, 1961 IS NOT APPLICABLE. 29. IT WAS FURTHER SUBMITTED THAT AS PER THE ORDER RECEIVED FROM THE STATE GOVERNMENT (ADMINISTRATIVE DEPARTMENT OF THE COUNCI L) DATED 10 TH APRIL 2019, WHERE IT IS CLEARLY MENTIONED THAT THE STATE GOVER NMENT HAS CREATED AND SUBSCRIBED THE COUNCIL AND FIX THE VARIOUS FEES/CHA RGES TO COVER THE NORMAL EXPENDITURE ON OPERATION AND DEVELOPMENT OF THE AME NITIES/ 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 TH E COUNCIL FOR MEETING THE OPERATIONS AND FUTURE DEVELOPMENT EXPENSES. IT WAS SUBMITTED THAT THERE IS THUS NO SYSTEM OF DISTRIBUTION OF SURPLUS IN THE CO UNCIL 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 PURP OSE OF EARNING PROFIT OR CHARITY WOULD BE THE MANNER IN WHICH THE DISTRIBUTI ON OF SURPLUS IS MADE AMONG THE MEMBERS. WHERE THE SURPLUS IS NOT DISTRIB UTED AMONG THE MEMBERS BUT USED FOR GENERAL PUBLIC, SUCH INSTITUTI ON IS ONLY MEANT FOR CHARITY. AS PER THE SECTION 6 OF THE ACT, THE TERM OF OFFICE OF MEMBERS SHALL BE CONTINUE AS SUCH LONG AS HE HOLDS THE OFFICE BY VIR TUE OF WHICH HE IS A MEMBER OF THE COUNCIL. THERE CANNOT BE ANY PERMANEN T MEMBER OF THE COUNCIL AND THAT THERE COULD BE NO SITUATION THAT A MEMBER CAN DERIVE ANY BENEFIT FOR HIMSELF OR FOR THE MEMBER OF HIS FAMILY FROM THE COUNCIL. 30. IN SUPPORT OF AFORESAID CONTENTIONS, THE RELIAN CE WAS PLACED ON FOLLOWING JUDGEMENTS: BODH SHIKSHA SAMITI VS ACIT (EXEMPTIONS), JAIPUR (ITA. NO. 590, 591 & 592/JP/2018 DATED 29.05.2019) ITA NO. 1283/2019 RAJASTHAN NURSING COUNCIL VS. CIT(E) 13 BHARTIYA SIKSHA SAMITI VS CIT (ITA NO. 816/DEL/2015 DATED 16.10.2015). QUEENS EDUCATION SOCIETY VS CIT (2015) 372 ITR 699 (SC) GREEN AREA EDUCATION TRUST V. DEPUTY COMMISSIONER O F INCOME-TAX, 5(2)(2), MUMBAI (2016) 159 ITD 671 (MUM) ADIT (EXEMPTION) VS JEEVANVIDHYA MISSION (2015) 155 ITD 1150 ASSAM STATE TEXT BOOK PRODUCTION & PUBLICATION CORP N. LTD. (2009) 319 ITR 317 (SC) GS1 INDIA V.DGIT (EXEMPTIONS) [2014] 360 ITR 138(DE L) SECONDARY BOARD OF EDUCATION V. ITO (1972) 86 ITR 4 08 (ORISSA) KATRA EDUCATIONAL SOCIETY V. ITO [1978] 111 ITR 420 (ALL.) ADITANAR EDUCATIONAL INSTITUTION VS. ADDL. CIT (199 7) 224 ITR 310(SC) SHAVAK SHIKSHA SAMITI VS CIT 104 TTJ 127 (DEL) PINEGROVE INTERNATIONAL CHARITABLE TRUST VS UNION O F INDIA [2010] 188 TAXMAN 402 (PUNJ. & HAR.) CIT VS GUJARAT MARITIME BOARD (2007) 295 ITR 561 (S C) INDIAN CHAMBER OF COMMERCE VS. COMMISSIONER OF INCO ME TAX (1975)101 ITR 0796 ADD.CIT VS. SURAT SILK CLOTH MANUFACTURERS ASSOCIAT ION [1980] 2 SCC 31 31. IT WAS FINALLY SUBMITTED THAT THE PREDOMINANT P URPOSE AND FUNCTIONS OF THE COUNCIL IS EDUCATION, ITS A BODY CONSTITUTED F OR THE PURPOSE OF SERVING THE SOCIETY FOR EDUCATION IN NURSING & THEREFORE ELIGIB LE FOR REGISTRATION AS EDUCATION U/S 12AA OF THE ACT. THE COUNCIL IS STA TE OWNED AND CONTROLLED FOR WELFARE OF THE SOCIETY AND NOT FOR PROFIT, THE SURP LUS FROM THE ACTIVITIES OF THE COUNCIL IS RETAINED FOR MEETING THE OPERATIONS AND NOT DISTRIBUTED IN ANY MANNER AMONG THE MEMBERS OF THE COUNCIL. IT IS THER EFORE ALSO COVERED AS GENERAL PUBLIC UTILITY AND PROVISO TO SECTION 2(15) IS NOT APPLICABLE. ITA NO. 1283/2019 RAJASTHAN NURSING COUNCIL VS. CIT(E) 14 32. PER CONTRA, THE LD. CIT/DR, REFERRING TO THE GA ZETTE NOTIFICATION DATED 01.04.1964, SUBMITTED THAT THE CORE AREA OF ACTIVIT IES PERFORMED BY THE ASSESSEE COUNCIL ARE MAINTENANCE OF REGISTERS OF RE GISTERED NURSES, MIDWIVES, HEALTH VISITORS AND AUXILIARY NURSE-MIDWIVES AND AN NUAL PUBLICATION OF NAMES THEREOF, TO LAY DOWN THE COURSES OF TRAINING, TO PR ESCRIBE THE QUALIFYING EXAMINATIONS, SPECIFY THE VARIOUS TITLE, DEGREES, D IPLOMAS OR CERTIFICATES AND RECOGNIZE EDUCATIONAL OR INSTRUCTIONS, SCHOOLS, COL LEGES FOR THE PURPOSE OF TRAINING AND TO APPOINT EXAMINATION BODIES. IT WAS ACCORDINGLY SUBMITTED THAT APPELLANT-COUNCIL IS ONLY A REGULATORY BODY. FURTHE R, THE LD. CIT/DR REFERRED TO THE DECISION OF THE HONBLE SUPREME COURT IN CAS E OF CIT VS BAR COUNCIL OF MAHARASHTRA (1981) 130 ITR 28 WHEREIN IT WAS HELD T HAT DOMINANT PURPOSE OF AN INSTITUTION LIKE THE BAR COUNCIL IS THE ADVANCEM ENT OF THE OBJECT OF GENERAL PUBLIC UTILITY WITHIN THE MEANING OF SECTION 2(15) OF THE ACT. FURTHER, REFERRING TO THE HONBLE SUPREME COURT DECISION IN CASE OF SO LE TRUSTEE LOK SHIKSHANA TRUST VS. CIT (1975) 101 ITR 234, IT WAS SUBMITTED THAT THE TERM EDUCATION CONNOTES SYSTEMATIC INSTRUCTION BY WAY OF NORMAL SC HOOLING AND IN THE INSTANT CASE, NO SUCH EDUCATIONAL ACTIVITIES HAS BEEN CARRI ED OUT BY THE APPELLANT COUNCIL SO THAT IT CAN BE TERMED AS AN EDUCATION IN STITUTION. IT WAS SUBMITTED THAT BEING A REGULATORY BODY, IT ONLY REGISTERS NUR SES, MIDWIVES, HEALTH VISITORS AND AUXILIARY NURSE-MIDWIVES, RECOGNIZE INSTITUTION S, SCHOOLS AND COLLEGES FOR THE PURPOSE OF TRAINING AND IT DOES NOT TRAIN/EDUCA TE/DISSEMINATE ANY KNOWLEDGE. HENCE, IT IS APPARENT THAT ALL THE ACTIV ITIES PERFORMED OR TO BE PERFORMED BY THE APPLICANT COUNCIL COME UNDER THE L IMB OF GENERAL PUBLIC UTILITY AND IS NOT COVERED UNDER THE LIMB EDUCATI ON AS DEFINED U/S 2(15) OF THE ACT. FURTHER, THE LD CIT/DR RELIED ON THE DECIS ION OF HONBLE BOMBAY HIGH COURT IN CASE OF DIRECTOR OF INCOME-TAX (EXEMPTIONS ) VS. NATION SAFETY COUNCIL (2008) 305 ITR 257 AND DECISION OF HONBLE MADRAS H IGH COURT IN CASE OF CIT(ADDL.) VS. AUTOMOBILE ASSOCIATION OF INDIA (198 1) 127 ITR 730 IN SUPPORT OF HIS CONTENTIONS. ITA NO. 1283/2019 RAJASTHAN NURSING COUNCIL VS. CIT(E) 15 33. IT WAS FURTHER SUBMITTED THAT THE DECISION OF H ONBLE SUPREME COURT IN CASE OF ASSAM STATE TEXTBOOK BOARD, RELIED UPON BY THE LD. COUNCIL, IS NOT APPLICABLE SINCE FIRSTLY, THE HONBLE 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 DIFF ERENT 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 ACTIVITIE S FALL UNDER THE CATEGORY OF GENERAL PUBLIC UTILITY TO WHICH PROVISO TO SECTIO N 2(15) OF THE ACT IS APPLICABLE. 34. FURTHER REFERRING TO THE PROVISO TO SECTION 2(1 5) OF THE ACT, IT WAS SUBMITTED BY THE LD CIT/DR THAT THE SAID PROVISO WA S INSERTED TO KEEP A CHECK ON THE ENTITIES WHO HAVE OTHER OBJECTS OF GENERAL P UBLIC UTILITY AND WHO USED OBJECT OF GENERAL PUBLIC UTILITY AS A MASK OR A DEV ICE TO HIDE THE TRUE PURPOSE WHICH IS TRADE, COMMERCE OR BUSINESS OR THE RENDERI NG OF ANY SERVICES IN RELATION TO TRADE, COMMERCE OR BUSINESS. FURTHER R EFERRING TO THE AMENDMENT BY THE FINANCE ACT, 2015, IT WAS SUBMITTED THAT THE PREDOMINANT OBJECT TEST IS TO BE APPLIED AND THE BUSINESS ACTIVITIES SHOULD BE IN THE COURSE OF ACTUAL CARRYING OUT OF SUCH GENERAL PUBLIC UTILITY AND SHO ULD ONLY BE INCIDENTAL TO THE CHARITABLE OBJECT AND HENCE SHOULD NOT BE THE PREDO MINANT OR PRIMARY ACTIVITIES BY ITSELF. IT WAS FURTHER SUBMITTED THAT IN THE INSTANT CASE, THE ACTIVITIES CARRIED OUT BY THE APPLICANT COUNCIL HAV E BEEN REFLECTED IN ITS INCOME & EXPENDITURE ACCOUNTS OF VARIOUS YEARS. THE APPLICANT COUNCIL IS IN RECEIPT OF DIRECT INCOME COMPRISING MAINLY REGISTRA TION FEES, COUNSELLING FEES, EXAMINATION FEES, INSPECTION FEES, REVALUATIO N 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 DURI NG THE PERIOD FROM F.Y ITA NO. 1283/2019 RAJASTHAN NURSING COUNCIL VS. CIT(E) 16 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 ACCOUNT S 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 ST ATE 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 1 ST PROVISO TO SECTION 2(15). HENCE, THE APPLICANT FAILS CONDITION (B) OF THE PRO VISO. FURTHER, SUCH COMMERCIAL ACTIVITIES ARE NOT INCIDENTAL BUT ARE PR E-DOMINANT ACTIVITY OF THE APPLICANT. HENCE, THE ASSESSEE ALSO FAILS CONDITION (A) OF THE PROVISO. THEREFORE, AS PER THE PROVISO, SUCH ACTIVITY IN THE NATURE OF ADVANCEMENT OF AN OBJECT OF GPU SHALL NOT QUALIFY AS CHARITABLE AC TIVITY. HE ACCORDINGLY SUPPORTED THE FINDINGS AND THE ORDER OF THE LD CIT( E) AND SUBMITTED THAT NO INTERFERENCE IS CALLED FOR IN THE SAID ORDER REJECT ING THE APPLICATION OF THE ASSESSEE COUNCIL SEEKING REGISTRATION UNDER SECTION 12AA AND THE APPEAL OF THE ASSESSEE COUNCIL MAY THUS BE DISMISSED. 35. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PE RUSED THE MATERIAL AVAILABLE ON RECORD. THE RELEVANT PROVISIONS WHICH ARE UNDER CONSIDERATION IS SECTION 2(15) WHICH DEFINES THE TERM CHARITABLE PU RPOSE AND THE SAME READS AS UNDER: 2 (15) CHARITABLE PURPOSE' INCLUDES RELIEF OF THE POOR, E DUCATION, YOGA, MEDICAL RELIEF, PRESERVATION OF ENVIRONMENT (INCLUDING WATERSHEDS, FORESTS AND WILDLIFE) AND PRESERVATION OF MONUMENTS OR PLACES OR OBJECTS OF ARTISTIC OR HISTORIC INTERE ST, AND THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC U TILITY: PROVIDED THAT THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY SHALL NOT BE A CHARITABLE PURPOSE, IF IT INVOLVES T HE ITA NO. 1283/2019 RAJASTHAN NURSING COUNCIL VS. CIT(E) 17 CARRYING ON OF ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE O R BUSINESS, OR ANY ACTIVITY OF RENDERING ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSINESS, FOR A CESS OR FEE OR A NY 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 PUB LIC UTILITY; AND (II) THE AGGREGATE RECEIPTS FROM SUCH ACTIVITY OR ACTIVI TIES DURING THE PREVIOUS YEAR, DO NOT EXCEED TWENTY PER CENT OF THE TOTAL RECEIPTS, OF THE TRUST OR INSTITUTION UNDERTAKING S UCH ACTIVITY OR ACTIVITIES, OF THAT PREVIOUS YEAR. 36. THE CONTENTIONS ADVANCED ON BEHALF OF THE ASSE SSEE COUNCIL IS THAT FIRSTLY, IT IS AN EDUCATIONAL INSTITUTION AND THERE FORE, CLEARLY ENGAGED IN CHARITABLE PURPOSE. SECONDLY, ITS PREDOMINANT OBJEC TIVE BEING EDUCATION AND NOT TO EARN PROFITS, EVEN WHERE IT IS HELD TO BE A GENERAL PUBLIC UTILITY, THE PROVISO TO SECTION 2(15) IS NOT APPLICABLE. AS AGA INST THAT, THE CONTENTION RAISED ON BEHALF OF THE REVENUE IS THAT THE ASSESSE E COUNCIL IS NOT ENGAGED IN THE CHARITABLE PURPOSE OF EDUCATION AND IS CARRYING OUT PREDOMINANTLY FUNCTIONS OF A REGULATORY BODY AND ITS ACTIVITIES F ALL UNDER THE CATEGORY OF GENERAL PUBLIC UTILITY AND FURTHER, THE PROVISO T O SECTION 2(15) IS APPLICABLE AS FEES RECEIVED ARE IN NATURE OF BUSINESS RECEIPTS WHICH FORMS SUBSTANTIAL PART OF ITS TOTAL INCOME AND THEREFORE, THE ASSESSE E COUNCIL CANNOT BE HELD AS CHARITABLE WITHIN THE MEANING OF SECTION 2(15) OF T HE ACT. 37. THE EXPRESSION CHARITABLE PURPOSE HAS BEEN IN TERPRETED BY THE HONBLE SUPREME COURT AND HONBLE HIGH COURTS IN A CATENA OF DECISIONS OVER A PERIOD OF TIME AND THERE IS A RICH JURISPRUDENCE WHICH IS AVAILABLE AND CAN ITA NO. 1283/2019 RAJASTHAN NURSING COUNCIL VS. CIT(E) 18 BE GAINFULLY REFERRED TO. FOR THE PURPOSES OF PRES ENT DISCUSSION, WE REFER TO SOME OF THESE DECISIONS INCLUDING THE DECISIONS CIT ED BY THE PARTIES. 38. IN CASE OF CIT VS. BAR COUNCIL OF MAHARASHTRA [1981] 130 ITR 28, THE HONBLE SUPREME COURT HAD AN OCCASION TO EXAMIN E WHETHER THE BAR COUNCIL OF MAHARASHTRA COULD BE TAKEN TO BE A BODY INTENDED TO ADVANCE ANY OBJECT OF GENERAL PUBLIC UTILITY FALLING WITHIN SEC TION 2(15) FOR THE PURPOSES OF SECTION 11 OF THE INCOME TAX ACT. LOOKING AT THE PR EAMBLE, NATURE AND FUNCTIONS OF THE BAR COUNCIL OF MAHARASHTRA PRESCRI BED UNDER THE ADVOCATE ACT, 1961, IT WAS HELD THAT THE PRIMARY PURPOSE AND OBJECT OF THE BAR COUNCIL OF MAHARASHTRA IS THE ADVANCEMENT OF OBJECT OF GENE RAL PUBLIC UTILITY. HENCE, IT IS COVERED UNDER SECTION 2(15) OF THE ACT AND TH E RELEVANT FINDING READS AS UNDER:- IT MAY BE NOTICED THAT WHEREAS ANY OBJECT OF GENER AL PUBLIC UTILITY WAS INCLUDED IN THE DEFINITION OF 'CHARITABLE PURPOSE' IN THE 1922 ACT, THE PRESENT DEFINITION HAS INSERTED THE RESTRICTIVE WOR DS 'NOT INVOLVING THE CARRYING ON OF ANY ACTIVITY FOR PROFIT' WHICH QUALI FY OR GOVERN THE LAST HEAD OF CHARITABLE PURPOSE. IN CIT V. ANDHRA CHAMBE R OF COMMERCE [1965] 55 ITR 722 - A CASE DECIDED BY THIS COURT UNDER THE 1922 ACT, WHERE THE RESTRICTIVE WORDS WERE ABSENT, THIS COURT LAID DOWN THAT IF THE PRIMARY OR DOMINANT PURPOSE OF A T RUST OR INSTITUTION WAS CHARITABLE, ANY OTHER OBJECT WHICH BY ITSELF MI GHT 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 WORD S 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 AFOR ESAID TEST OF PRIMARY OR DOMINANT PURPOSE OF A TRUST OR INSTITUTION STILL HOLDS GOOD, THAT THE RESTRICTIVE WORDS QUALIFY 'OBJECT' AND NOT THE ADVA NCEMENT OR ACCOMPLISHMENT THEREOF, AND THAT THE TRUE MEANING O F THE RESTRICTIVE WORDS WAS THAT WHEN THE PURPOSE OF A TRUST OR INSTI TUTION WAS THE ADVANCEMENT OF AN OBJECT OF GENERAL PUBLIC UTILITY, IT WAS THAT OBJECT OF GENERAL PUBLIC UTILITY AND NOT ITS ACCOMPLISHMENT O R CARRYING OUT WHICH MUST NOT INVOLVE THE CARRYING ON OF ANY ACTIVITY FO R PROFIT. AND APPLYING THESE TESTS TRADING BODIES LIKE ANDHRA CHAMBER OF C OMMERCE AND SURAT ITA NO. 1283/2019 RAJASTHAN NURSING COUNCIL VS. CIT(E) 19 ART SILK CLOTH MANUFACTURERS' ASSOCIATION HAVE BEEN HELD TO BE INSTITUTIONS CONSTITUTED WITH A VIEW TO ADVANCE AN OBJECT OF GENERAL PUBLIC UTILITY BECAUSE THEIR PRIMARY OR DOMINANT PU RPOSE WAS TO PROMOTE AND PROTECT INDUSTRY, TRADE AND COMMERCE, E ITHER GENERALLY OR IN CERTAIN COMMODITIES, EVEN THOUGH SOME BENEFIT TH ROUGH SOME OF THEIR ACTIVITIES DID ACCRUE TO THEIR MEMBERS WHICH WAS REGARDED AS INCIDENTAL AND THIS COURT HELD THAT THE INCOME DERI VED FROM DIVERSE SOURCES BY THESE INSTITUTIONS [RENTAL INCOME FROM P ROPERTY IN THE CASE OF ANDHRA CHAMBER OF COMMERCE AND INCOME FROM ANNUA L SUBSCRIPTIONS COLLECTED FROM ITS MEMBERS AND COMMISSION OF A CERT AIN PERCENTAGE OF THE VALUE OF LICENCES FOR IMPORT OF FOREIGN YARN AN D QUOTAS FOR PURCHASE OF INDIGENOUS YARN OBTAINED BY THE ASSESSEE FROM IT S MEMBERS IN THE CASE OF SURAT ART SILK CLOTH MANUFACTURERS' ASSOCIA TION) WAS EXEMPT FROM TAX LIABILITY UNDER SECTION 11. RELIANCE ON EN GLISH DECISIONS WOULD NOT BE OF MUCH AVAIL BECAUSE THE DEFINITION OF 'CHA RITABLE PURPOSES' AS GIVEN IN OUR ACT, SINCE IT EMBRACES 'ANY OTHER OBJE CT OF GENERAL PUBLIC UTILITY' GOES FURTHER THAN THE DEFINITION OF CHARIT Y TO BE DERIVED FROM THE ENGLISH CASES. UNDER ENGLISH LAW OF CHARITY A TRUST IS CHARITABLE ONLY IF IT IS WITHIN THE SPIRIT AND INTENDMENT OF THE PREAMBLE TO THE STATUTE OF ELIZABETH (43 ELIZ. CH. 4) AND ALL OBJECTS OF GENER AL PUBLIC UTILITY ARE NOT NECESSARILY CHARITABLE, SOME MAY, OR SOME MAY NOT B E, DEPENDING UPON WHETHER THEY FALL WITHIN THE SPIRIT AND INTENDMENT OF THE STATUTE OF ELIZABETH. UNDER OUR DEFINITION EVERY OBJECT OF GEN ERAL PUBLIC UTILITY WOULD BE CHARITABLE SUBJECT ONLY TO THE CONDITION I MPOSED BY THE RESTRICTIVE WORDS INSERTED IN THE 1961 ACT. COUNSEL FOR THE REVENUE CONTENDED THAT THE PRIMARY OBJECT OR PURPOSE WITH WHICH THE BAR COUNCIL OF A STATE IS CONSTITUTE D IS TO BENEFIT THE MEMBERS OF THE LEGAL PROFESSION INASMUCH AS UNDER S ECTION 6(1)( D) IT IS AN OBLIGATORY FUNCTION OF THE STATE BAR COUNCIL TO SAFEGUARD THE RIGHTS, PRIVILEGES AND INTERESTS OF THE ADVOCATES ON ITS RO LL AND THAT OTHER FUNCTIONS LIKE PROMOTION OF LAW REFORM, CONDUCTING LAW SEMINARS, ETC., ARE INCIDENTAL OBJECTS AND THE BENEFIT TO THE PUBLI C IS REMOTE OR INDIRECT OR INCIDENTAL AND, THEREFORE, THE ASSESSEE-COUNCIL COULD NOT BE REGARDED AS A BODY IN TENDED TO ADVANCE THE OBJECT OF GENERA L PUBLIC UTILITY. IT IS IMPOSSIBLE TO ACCEPT THIS CONTENTION. IT IS CLEAR T HAT SUB-SECTION (1) LAYS DOWN THE OBLIGATORY FUNCTIONS WHILE SUB-SECTION (2) INDICATES WHAT ARE THE OPTIONAL OR DISCRETIONARY FUNCTIONS THAT COULD BE UNDERTAKEN BY THE STATE BAR COUNCIL AND FROM AMONGST THE OBLIGATORY F UNCTIONS IT WILL BE ITA NO. 1283/2019 RAJASTHAN NURSING COUNCIL VS. CIT(E) 20 WRONG TO PICK OUT ONE AND SAY IT IS THE PRIMARY OR DOMINANT OBJECT OR PURPOSE. ALL THE CLAUSES OF SUB-SECTION (1) WILL HA VE TO BE CONSIDERED IN LIGHT OF THE MAIN OBJECTIVE SOUGHT TO BE ACHIEVED A S INDICATED IN THE PREAMBLE. THE FUNCTIONS MENTIONED IN CLAUSES (A) AN D ( B)OF SUB- SECTION (1), NAMELY, TO ADMIT PERSONS AS ADVOCATES ON ITS ROLL AND TO PREPARE AND MAINTAIN SUCH ROLL, ARE CLEARLY REGULAT ORY IN CHARACTER INTENDED TO ENSURE THAT PERSONS WITH REQUISITE QUAL IFICATIONS 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 PROTEC TING THE LITIGATING PUBLIC FROM UNSCRUPULOUS PROFESSIONALS BY TAKING TH EM TO TASK FOR ANY MISCONDUCT ON THEIR PART ; IT IS ALSO ONE OF THE OB LIGATORY FUNCTIONS OF A STATE BAR COUNCIL TO PROMOTE AND SUPPORT MEASURES F OR LAW REFORM AS ALSO TO CONDUCT LAW SEMINARS AND ORGANISE TALKS ON LEGAL TOPICS BY EMINENT JURISTS, OBVIOUSLY WITH A VIEW TO EDUCATE T HE GENERAL PUBLIC; THE FUNCTION PRESCRIBED BY CLAUSE (EEE)IS OBVIOUSLY CHA RITABLE IN NATURE, THE SAME BEING TO ORGANISE LEGAL AID TO THE POOR. AMONG ST THESE VARIOUS OBLIGATORY FUNCTIONS ONE UNDER CLAUSE (D) IS TO SAF EGUARD THE RIGHTS, PRIVILEGES AND INTERESTS OF THE ADVOCATES ON ITS RO LL AND IT IS DIFFICULT TO REGARD IT AS A PRIMARY OR DOMINANT FUNCTION OR PURP OSE FOR WHICH THE BODY IS CONSTITUTED EVEN THIS FUNCTION APART FROM S ECURING SPEEDY DISCHARGE OF OBLIGATIONS BY THE LITIGANTS TO THE LA WYERS ENSURES MAINTENANCE OF HIGH PROFESSIONAL STANDARDS AND INDE PENDENCE OF THE BAR WHICH ARE NECESSARY IN THE PERFORMANCE OF THEIR DUTIES TO THE SOCIETY. IN OTHER WORDS, THE DOMINANT PURPOSE OF A STATE BAR COUNCIL AS REFLECTED BY THE VARIOUS OBLIGATORY FUNCTIONS IS TO ENSURE QUALITY SERVICE OF COMPETENT LAWYERS TO THE LITIGATING PUBLIC, TO S PREAD LEGAL LITERACY, PROMOTE LAW REFORMS AND PROVIDE LEGAL ASSISTANCE TO THE POOR WHILE THE BENEFIT ACCRUING TO THE LAWYER-MEMBERS IS INCIDENTA L. IT IS TRUE THAT SUB- SECTION (2) PROVIDES THAT A STATE BAR COUNCIL MAY C ONSTITUTE ONE OR MORE FUNDS FOR THE PURPOSE OF GIVING FINANCIAL ASSI STANCE TO ORGANISE WELFARE SCHEMES FOR THE INDIGENT, DISABLED OR OTHER ADVOCATES ; BUT IT IS AN OPTIONAL OR DISCRETIONARY FUNCTION TO BE UNDERTA KEN BY THE COUNCIL. APART FROM THAT, ADMITTEDLY THE ASSESSEE-COUNCIL HA S NOT SO FAR CONSTITUTED ANY SUCH FUND FOR THE PURPOSE SPECIFIED IN THE INSTANT CASE. AS AND WHEN SUCH A FUND IS CONSTITUTED, A QUESTION MAY ARISE FOR CONSIDERATION AND THE COURT MAY HAVE TO DECIDE WHET HER THE FUNCTION SO UNDERTAKEN BY A STATE BAR COUNCIL HAS BECOME THE DOMINANT ITA NO. 1283/2019 RAJASTHAN NURSING COUNCIL VS. CIT(E) 21 PURPOSE FOR WHICH THAT COUNCIL IS OPERATING. HAVING REGARD TO THE PREAMBLE OF THE ACT AND THE NATURE OF THE VARIOUS O BLIGATORY FUNCTIONS INCLUDING THE ONE UNDER CLAUSE (D) ENJOINED UPON EV ERY STATE BAR COUNCIL UNDER SECTION 6(1), IT IS CLEAR THAT THE PR IMARY OR DOMINANT PURPOSE OF AN INSTITUTION LIKE THE ASSESSEE-COUNCIL IS THE ADVANCEMENT OF THE OBJECT OF GENERAL PUBLIC UTILITY WITHIN THE MEANING OF SECTION 2(75) AND AS SUCH THE INCOME FROM SECURITIES HELD B Y THE ASSESSEE- COUNCIL WOULD BE EXEMPT FROM ANY TAX LIABILITY UNDE R SECTION 11. 39. A SIMILAR MATTER CAME UP FOR CONSIDERATION BEFO RE THE HONBLE RAJASTHAN HIGH COURT IN CASE OF BAR COUNCIL OF RAJASTHAN VS. CIT [1984] 147 ITR 720 WHEREIN THE QUESTION FOR CONSIDERATION BEFORE THE HONBLE HIGH COURT WAS WHETHER THE BAR COUNCIL OF RAJASTHAN COUL D BE TAKEN TO BE A BODY INTENDED TO ADVANCE ANY OBJECT OF GENERAL PUBLIC UT ILITY AND FOLLOWING THE DECISION OF HONBLE SUPREME COURT IN CASE OF BAR CO UNCIL OF MAHARASHTRA (SUPRA), IT WAS HELD AS UNDER (HEAD NOTES):- THE DOMINANT PURPOSE OF A STATE BAR COUNCIL, AS RE FLECTED BY ITS VARIOUS OBLIGATORY FUNCTIONS, IS TO ENSURE QUALITY SERVICE OF COMPETENT LAWYERS TO THE LITIGATING PUBLIC, TO SPREAD LEGAL L ITERACY, PROMOTE LAW REFORMS AND PROVIDE LEGAL ASSISTANCE TO THE POOR, W HILE THE BENEFIT ACCRUING TO THE LAYER-MEMBERS IS INCIDENTAL. THE PR IMARY OR DOMINANT PURPOSE OF AN INSTITUTION LIKE THE STATE BAR COUNCI L IS THE ADVANCE OF AN OBJECT OF GENERAL PUBLIC UTILITY WITHIN THE MEANI NG OF S. 2(15) OF THE I.T. ACT, 1961, AND AS SUCH THE INCOME FROM SECURIT IES 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 BO DY 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 INC OME RECEIVED BY THE COUNCIL FROM ITS INVESTMENTS IS EXEMPT UNDER S. 11 OF THE ACT. 40. IN CASE OF INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA VS. DGI T (EXEMPTIONS) [2012] 347 ITR 99, THE ISSUE WHICH CAME UP FOR CON SIDERATION BEFORE THE HONBLE DELHI HIGH COURT WAS WHETHER INS TITUTE OF CHARTERED ACCOUNTANTS OF INDIA (ICAI) IS AN INSTITUTION WHICH CARRIES ON CHARITABLE ITA NO. 1283/2019 RAJASTHAN NURSING COUNCIL VS. CIT(E) 22 ACTIVITIES IN THE NATURE OF EDUCATION OR ADVANCEMEN T OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY AND IT WAS HELD THAT ICAI IS A STATUTORY AUTHORITY UNDER CHARTERED ACCOUNTANT ACT AND ITS FUNDAMENTAL OR DOM INANT FUNCTION IS TO EXERCISE OVERALL CONTROL AND REGULATE THE ACTIVITIE S OF THE MEMBERS/ENROLLED CHARTERED ACCOUNTANTS AND IT CANNOT BE REGARDED AS AN EDUCATIONAL INSTITUTE AND IT FALLS IN THE CATEGORY OF ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY AND THE RELEVANT FINDING READS AS UN DER (PAGES 105-108):- THE PETITIONER-INSTITUTE WILL FALL UNDER THE SIXTH CATEGORY, I.E., ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY. THE PETITIONER INSTITUTE CANNOT BE REGARDED AS AN E DUCATIONAL INSTITUTE AS THE PETITIONER'S MAIN OR PREDOMINANT OBJECTIVE I S TO REGULATE THE PROFESSION OF, AND THE CONDUCT OF, CHARTERED ACCOUN TANTS ENROLLED WITH THEM. THE PETITIONER IS A STATUTORY AUTHORITY UNDER THE CHARTERED ACCOUNTANTS ACT, 1949 (THE 'CA ACT') AND ITS FUNDAM ENTAL OR DOMINANT FUNCTION IS TO EXERCISE OVERALL CONTROL AND REGULAT E THE ACTIVITIES OF THE MEMBERS/ENROLLED CHARTERED ACCOUNTANTS. THIS IS APP ARENT FROM THE CA ACT, AND THE REGULATIONS FRAMED UNDER THE SAID ACT. 7. THE CA ACT WAS ENACTED, AS PER THE PREAMBLE, TO MAKE PROVISIONS FOR REGULATION OF THE PROFESSION OF CHARTERED ACCOU NTANTS AND FOR THAT PURPOSE TO ESTABLISH AN INSTITUTE OF CHARTERED ACCO UNTANTS. AS PER THE STATEMENT OF OBJECTS AND PURPOSE THE ENACTMENT WAS TO AUTHORIZE INCORPORATION OF A AUTONOMOUS PROFESSIONAL BODY FOR THE SAID PURPOSE. THE FUNCTION AND THE OBJECT AND PURPOSE OF THE INST ITUTE CAN BE ALSO GATHERED FROM SECTION 15 OF THE CA ACT, WHICH PRESC RIBES FUNCTIONS OF THE COUNCIL. FOR THE SAKE OF CONVENIENCE SECTION 15 IS REPRODUCED BELOW: '15. FUNCTIONS OF THE COUNCIL.(1) THE DUTY OF CARR YING OUT THE PROVISIONS OF THIS ACT SHALL BE VESTED IN THE COUNC IL. (2) IN PARTICULAR, AND WITHOUT PREJUDICE TO THE GEN ERALITY OF THE FOREGOING POWER, THE DUTIES OF THE COUNCIL SHALL INCLUDE- (A) THE EXAMINATION OF CANDIDATES FOR ENROLMENT AND THE PRESCRIBING OF FEES THEREFOR; ITA NO. 1283/2019 RAJASTHAN NURSING COUNCIL VS. CIT(E) 23 (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 TRAIN ING 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 PE RSONS 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 REST ORATION TO THE REGISTER OF NAMES WHICH HAVE BEEN REMOVED; (I) THE REGULATION AND MAINTENANCE OF THE STATUS AND ST ANDARD OF PROFESSIONAL QUALIFICATIONS OF C [MEMBERS OF THE INSTITUTE]; (J) THE CARRYING OUT, BY FINANCIAL ASSISTANCE TO PERSON S OTHER THAN MEMBERS OF THE COUNCIL OR IN ANY OTHER MANNER, OF RESEARCH IN ACCOUNTANCY; (K) THE MAINTENANCE OF A LIBRARY AND PUBLICATION OF BOO KS AND PERIODICALS RELATING TO ACCOUNTANCY; AND (L) THE EXERCISE OF DISCIPLINARY POWERS CONFERRED BY TH IS ACT. [A] SUBSTITUTED FOR THE WORDS 'ARTICLED CLERKS' BY THE CHARTERED ACCOUNTANTS (AMENDMENT) ACT (15 OF 1959) S.13 (1-7- 1959). [B] WORDS 'CHARTERED ACCOUNTANTS', OMITTED, IBID. [C] SUBSTITUTED FOR THE WORDS 'CHARTERED ACCOUNTANTS', IBID.' ITA NO. 1283/2019 RAJASTHAN NURSING COUNCIL VS. CIT(E) 24 8. SIMILARLY, THE FUNCTIONS OF THE COUNCIL CAN BE G ATHERED FROM SECTION 30, WHICH AUTHORIZES THE COUNCIL TO MAKE REGULATION S FOR THE PURPOSE OF CARRYING OUT THE OBJECTS OF THE CA ACT. SUB-SECTION 2 TO SECTION 30 AUTHORISES AND PERMITS REGULATIONS TO BE MADE IN TH E MATTER OF THE STANDARD AND CONDUCT OF EXAMINATIONS; QUALIFICATION S FOR ENTRY OF THE NAME OF ANY PERSON IN THE REGISTER AS ITS MEMBER; T HE CONDITIONS UNDER WHICH EXAMINATION OR TRAINING MAY BE TREATED AS EQU IVALENT TO EXAMINATION OR TRAINING PRESCRIBED; MANNER IN WHICH AND CONDITIONS FOR ENTRY INTO THE REGISTER OF MEMBERS; FEE PAYABLE FOR MEMBERSHIP OF THE INSTITUTE AND ANNUAL FEE PAYABLE, TRAINING OF ARTIC LED AND AUDIT CLERKS, FIXATION OF LIMITS WITHIN WHICH PREMIUM MAY BE CHAR GED FROM THE ARTICLED CLERKS ETC, REGULATION AND MAINTENANCE OF THE STATUS AND STANDARD OF PROFESSIONAL QUALIFICATIONS OF MEMBERS OF THE INSTITUTE ETC. IN CIT V. BAR COUNCIL OF MAHARASHTRA, [1981] 130 IT R 28, THE SUPREME COURT HAD EXAMINED WHETHER THE BAR COUNCIL OF MAHAR ASHTRA, A BODY CORPORATE ESTABLISHED UNDER THE ADVOCATES ACT, 1961 , QUALIFIES AND CAN BE REGARDED AS 'CHARITABLE INSTITUTION' UNDER THE L AST LIMB OF SECTION 2(15) OF THE ACT. LOOKING AT THE PREAMBLE, NATURE A ND FUNCTIONS OF THE BAR COUNCIL PRESCRIBED UNDER THE ADVOCATES ACT, 196 1, IT WAS HELD THAT THE PRIMARY PURPOSE AND OBJECT OF THE BAR COUNCIL I S THE ADVANCEMENT OF THE OBJECT OF GENERAL PUBLIC UTILITY AND HENCE I T IS COVERED BY SECTION 2(15). HOWEVER, WITH REFERENCE TO THE PROVISIONS TH AT PERMITTED CONSTITUTION OF ONE OR MORE FUNDS FOR THE INDIGENT, DISABLED OR OTHER ADVOCATES AND THE EFFECT THEREOF, THE QUESTION WAS LEFT OPEN BUT IT WAS HELD THAT EVEN IF SUCH FUND WAS CONSTITUTED, QUESTI ON WOULD BE CONSIDERED AND THE COURT WOULD HAVE TO DECIDE WHETH ER THE FUNCTIONS SO UNDERTAKEN HAD BECOME THE DOMINANT PURPOSE. NO DOUBT, THE PETITIONER HOLDS CLASSES AND PROVIDES COACHING FACILITIES FOR CANDIDATES/ARTICLED AND AUDIT CLERKS WHO WANT T O APPEAR IN THE EXAMINATIONS AND WANT TO GET ENROLLED AS CHARTERED ACCOUNTANTS AND AS WELL AS FOR MEMBERS OF THE PETITIONER-INSTITUTE WHO WANT TO UPDATE THEIR KNOWLEDGE AND DEVELOP AND SHARPEN THEIR PROFESSIONA L SKILLS, BUT THIS IS NOT THE SOLE OR PRIMARY ACTIVITY. THE PETITIONER-IN STITUTE MAY HOLD CLASSES AND GIVE DIPLOMA/DEGREES TO THE MEMBERS OF THEIR INSTITUTE IN VARIOUS SUBJECTS BUT THIS ACTIVITY IS ONLY AN ANCIL LARY PART OF THE ACTIVITIES OR FUNCTIONS PERFORMED BY THE PETITIONER INSTITUTE. THIS ONE OR PART ACTIVITY BY ITSELF, DOES NOT MEAN THAT THE PETITION ER IS AN EDUCATIONAL ITA NO. 1283/2019 RAJASTHAN NURSING COUNCIL VS. CIT(E) 25 INSTITUTE OR IS PREDOMINANTLY OR EXCLUSIVELY ENGAGE D IN THE ACTIVITY OF EDUCATION. THE PETITIONER INSTITUTE IS ENGAGED IN M ULTIFARIOUS ACTIVITIES OF DIVERSE NATURE, BUT THE PRIMARY AND THE DOMINANT AC TIVITY IS TO REGULATE THE PROFESSION OF CHARTERED ACCOUNTANCY. FOR THIS P URPOSE IT HOLDS ENTRANCE EXAMINATION AND ENROLLS MEMBERS. IT REGULA TES THE CONDUCT OF ITS MEMBERS, PRESCRIBES AND FIXES ACCOUNTANCY STAND ARDS, 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 DIFFE RENT THAN THOSE ASCRIBED IN THE SAID ORDER. 41. THE SAID ISSUE AGAIN CAME UP FOR CONSIDERATION BEFORE THE HONBLE DELHI HIGH COURT IN CASE OF ICAI VS. DGIT (EXEMPTIONS) [2013] 358 ITR 91 (DELHI) AND THE HONBLE DELHI HIGH COURT REITERATED ITS EARLIER FINDINGS AND HELD AS UNDER (PAGE 110):- ALTHOUGH, THIS COURT HAS HELD THAT THE ACTIVITIES OF THE PETITIONER FELL WITHIN THE TERM 'EDUCATION', IT WAS NONETHELESS HEL D THAT THE PETITIONER INSTITUTE FELL UNDER THE CATEGORY OF 'ADVANCEMENT O F ANY OBJECT OF GENERAL PUBLIC UTILITY' AS THE PETITIONER IS A STAT UTORY BODY CONSTITUTED UNDER THE ICAI ACT AND ITS FUNDAMENTAL OR DOMINANT OBJECT WAS TO EXERCISE CONTROL AND REGULATE THE ACTIVITIES OF CHA RTERED ACCOUNTANTS IN INDIA. THE RELEVANT FINDING OF THIS COURT IS AS UND ER: 'THE PETITIONER-INSTITUTE WILL FALL UNDER THE SIXTH CATEGORY, I.E., ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC U TILITY. THE PETITIONER-INSTITUTE CANNOT BE REGARDED AS AN EDUCA TIONAL INSTITUTE AS THE PETITIONER'S MAIN OR PREDOMINANT OBJECTIVE I S TO REGULATE THE PROFESSION OF, AND THE CONDUCT OF, CHARTERED AC COUNTANTS ENROLLED WITH THEM. THE PETITIONER IS A STATUTORY A UTHORITY UNDER THE CHARTERED ACCOUNTANTS ACT, 1949 ('THE CA ACT') AND ITS FUNDAMENTAL OR DOMINANT FUNCTION IS TO EXERCISE OVE RALL CONTROL AND REGULATE THE ACTIVITIES OF THE MEMBERS/ENROLLED CHARTERED ACCOUNTANTS. THIS IS APPARENT FROM THE CA ACT AND T HE REGULATIONS FRAMED UNDER THE SAID ACT.' ITA NO. 1283/2019 RAJASTHAN NURSING COUNCIL VS. CIT(E) 26 THIS COURT WHILE DISMISSING THE APPEAL (ITA NO. 274 /2012) PREFERRED BY THE REVENUE UNDER SECTION 260A OF THE ACT AGAINST T HE ORDER DATED 16.06.2011 PASSED BY THE TRIBUNAL IN RELATION TO TH E ASSESSMENT YEAR 2007-08 BY ITS JUDGMENT DATED 11.5.2012 HELD AS UND ER: 'AS HELD BY THIS COURT IN ITS DECISION DATED 19.9.2 011 IN WRIT PETITION NO.1927/2010 ENTITLED AS INSTITUTE OF CHAR TERED ACCOUNTANTS OF INDIA V. DIT, DELHI AND OTHERS, THE DOMINANT PURPOSE AND OBJECTIVE OF THE INSTITUTE IS TO REGULA TE THE PROFESSION OF CHARTERED ACCOUNTANTS IN INDIA AND FO R THIS PURPOSE IT HOLDS ENTRANCE EXAMINATION, REGULATES THE CONDUC T OF THE MEMBERS AND PRESCRIBES AND FIXES THE ACCOUNTANCY ST ANDARDS ETC. NO DOUBT, THE ASSESSEE HOLDS CLASSES AND PROVIDES C OACHING FACILITIES FOR THE MEMBERS AND ARTICLED CLERKS ETC. WHO WANT TO APPEAR IN THE EXAMINATION CONDUCTED BY THE INSTITUT E OF CHARTERED ACCOUNTANTS, BUT THESE CLASSES ARE NOT HE LD FOR COACHING OR FOR APPEARANCE IN AN EXAMINATION CONDUC TED BY SOME OTHER ENTITY/BODY. CONDUCTING OF COACHING CLASSES I S 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 ACCOUNTANC Y AS A PREFERRED PROFESSION. MEMBERS OF PETITIONER INSTITU TE ATTEND COURSES/LECTURES ETC. TO SHARPEN THEIR SKILL AND KN OWLEDGE. THESE ARE ANCILLARY ACTIVITIES TO THE MAIN ACTIVITY PERFO RMED 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 HONBLE 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 BUSI NESS. BIS IS A STATUTORY BODY ESTABLISHED UNDER THE BIS ACT AND WA S BROUGHT INTO EXISTENCE 'FOR THE HARMONIOUS DEVELOPMENT OF THE AC TIVITIES 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/CERTIFICATION, THE SAME CANNOT BE SAID TO BE DONE FOR THE PURPOSE OF PROFIT. IF ANY P ROFIT/REVENUE IS ITA NO. 1283/2019 RAJASTHAN NURSING COUNCIL VS. CIT(E) 27 EARNED, IT IS PURELY INCIDENTAL. THE BIS PERFORMS S OVEREIGN AND REGULATORY FUNCTION, IN ITS CAPACITY OF AN INSTRUME NTALITY OF THE STATE. THEREFORE, THIS COURT HAS NO DOUBT IN HOLDING THAT IT IS NOT INVOLVED IN CARRYING ANY ACTIVITY IN THE NATURE OF TRADE, COMME RCE OR BUSINESS. 14. IN THIS CONTEXT, THE SUPREME COURT HELD, IN CIT V. GUJARAT MARITIME BOARD [2007] 295 ITR 561/[2008] 166 TAXMAN 58 SPEAK ING ABOUT WHAT CONSTITUTES 'ANY OTHER OBJECT OF GENERAL PUBLIC UTI LITY' THAT: '13. ...THE SAID EXPRESSION WOULD PRIMA FACIE INCLU DE ALL OBJECTS WHICH PROMOTE THE WELFARE OF THE GENERAL PUBLIC. IT CANNO T 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 PREDOM INANT OBJECT ARE TO PROMOTE THE WELFARE OF THE GENERAL PUBLIC THE PURPO SE WOULD BE CHARITABLE PURPOSE. WHEN AN OBJECT IS TO PROMOTE OR PROTECT THE INTEREST OF A PARTICULAR TRADE OR INDUSTRY THAT OBJECT BECOM ES AN OBJECT OF PUBLIC UTILITY, BUT NOT SO, IF IT SEEKS TO PROMOTE THE INT EREST OF THOSE WHO CONDUCT THE SAID TRADE OR INDUSTRY [COMMISSIONER OF INCOME-TAX, MADRAS V. ANDHRA CHAMBER OF COMMERCE [1965] 55 ITR 722 (SC)]. IF THE PRIMARY OR PREDOMINANT OBJECT OF AN INSTITUTION IS CHARITABLE, ANY OTHER OBJECT WHICH MIGHT NOT BE CHARITABLE BUT WHIC H IS ANCILLARY OR INCIDENTAL TO THE DOMINANT PURPOSE, WOULD NOT PREVE NT THE INSTITUTION FROM BEING A VALID CHARITY ADDL. COMMISSIONER OF IN COME-TAX, GUJARAT V. SURAT ART SILK CLOTH MANUFACTURERS ASSOC IATION [1980] 121 ITR 1 (SC)]. 14. THE PRESENT CASE IN OUR VIEW IS EQUARELY COVERE D BY THE JUDGMENT OF THIS COURT IN THE CASE OF COMMISSIONER OF INCOME -TAX, A.P. V. ANDHRA PRADESH STATE ROAD TRANSPORT CORPORATION [1986] 159 ITR 1 (SC) IN WHICH IT HAS BEEN HELD THAT SINCE THE CORPORATION W AS ESTABLISHED FOR THE PURPOSE OF PROVIDING EFFICIENT TRANSPORT SYSTEM HAVING NO PROFIT MOTIVE, THOUGH IT EARNS INCOME IN THE PROCESS, IT I S NOT LIABLE TO INCOME- TAX.' 15. IN A SIMILAR VEIN, THE ALLAHABAD HIGH, IN BAR C OUNCIL OF UTTAR PRADESH V. CIT [1983] 143 ITR 584/12 TAXMAN 209 HEL D THAT THE OBJECT OF THE BAR COUNCIL, TO SAFEGUARD THE INTERESTS OF I TS ADVOCATES, TO ASSIST DISABLED ADVOCATES, TO SEE THAT ADVOCATES WHO MISBE HAVE ARE TAKEN TO TASK, TO PROMOTE LAW REFORM ETC. SHOWS THAT THE BOD Y IS CONSTITUTED UNDER SECTION 6 OF THE ADVOCATES ACT, 1961 TO BENEF IT THE PUBLIC AT ITA NO. 1283/2019 RAJASTHAN NURSING COUNCIL VS. CIT(E) 28 LARGE BY HAVING ON ITS ROLLS, ADVOCATES WHO ARE NOT ONLY COMPETENT IN LAW BUT WHO ARE RESPECTABLE AND PROPER PERSONS TO B ELONG TO THE NOBLE PROFESSION OF LAWYERS; THE SAID ACTIVITIES HAVE BEE N HELD FOR THE ADVANCEMENT OF GENERAL PUBLIC UTILITY WITHIN THE ME ANING OF SECTION 2(15) OF THE ACT. IN AHMEDABAD RANA CASTE ASSOCIATI ON (SUPRA), THE SUPREME COURT HELD THAT THE EXPRESSION 'ANY OTHER O BJECT OF GENERAL PUBLIC UTILITY' PRIMA FACIE INCLUDE ALL OBJECTS WHI CH PROMOTE THE WELFARE OF THE GENERAL PUBLIC. IT CANNOT BE SAID THAT A PUR POSE WOULD CEASE TO BE CHARITABLE EVEN IF PUBLIC WELFARE IS INTENDED TO BE SERVED. IF THE PRIMARY PURPOSE AND THE PREDOMINANT OBJECT ARE TO P ROMOTE THE WELFARE OF THE GENERAL PUBLIC THE PURPOSE WOULD BE CHARITABLE PURPOSE. 16. WHAT SURVIVES TO BE DETERMINED IS WHETHER ANY O F BIS'S ACTIVITIES FALL WITHIN THE LATTER AND LARGER CATEGORY OF 'INVO LVED IN THE CARRYING ON OF ANY ACTIVITY OF RENDERING ANY SERVICE IN RELATIO N TO ANY TRADE, COMMERCE OR BUSINESS'. THE EXPRESSIONS 'ANY ACTIVIT Y,' 'RENDERING ANY SERVICE' AND 'IN RELATION TO ANY TRADE, COMMERCE OR BUSINESS' IMPLY THAT THE INTENTION OF THE LEGISLATURE WAS TO MAKE THE LA TTER PART OF THE EXCEPTION BROAD AND INCLUSIVE. IT SEEMS THAT THE EX CEPTION (THE FIRST PROVISO) IS INTENDED TO CATCH WITH ITS AMBIT ANY AN D ALL COMMERCIAL ACTIVITY, EXCEPT WHAT FALLS WITHIN THE SECOND PROVI SO (WHICH BARS APPLICATION OF THE EXCEPTION IN CASES WHERE THE AGG REGATE VALUE OF THE RECEIPTS FROM THE ACTIVITIES MENTIONED THEREIN IS L ESS THAN TEN LAKH RUPEES IN THE RELEVANT PREVIOUS YEAR). THE BUREAU, IT WOULD APPEAR AT THE FIRST BLUSH, RENDERS SERVICE IN RELATION TO TRA DE, COMMERCE OR BUSINESS BY GRANTING CERTIFICATION/QUALITY MARKS IN RETURN OF LICENSE FEE. APPARENTLY, PARLIAMENT INTENDED TO CLARIFY THAT NOT ALL ACTIVITIES OF STATE AGENCIES (SOME OF WHICH MIGHT BE SET UP TO CARRY ON TRADING AND COMMERCIAL ACTIVITIES) CAN BE CONSIDERED CHARITABLE . THIS CAN BE GATHERED FROM THE NOTES ON CLAUSES ATTACHED TO THE FINANCE BILL, 2008: 'GOVERNMENT FEELS THAT CLAIM OF STATUS OF 'CHARITAB LE ORGANISATION' BY THE ORGANISATIONS CARRYING OUT ACTIVITIES ON COMMER CIAL LINES IS CONTRARY TO LEGISLATIVE INTENTION. FINANCE BILL, 2008 SEEKS TO AMEND SECTION 2(15) W.E .F. APRIL 1, 2009, BY SUBSTITUTING EXISTING DEFINITION WITH FOLLOWING DEF INITION: 'CHARITABLE PURPOSE INCLUDES RELIEF OF THE POOR, ED UCATION, MEDICAL RELIEF AND THE ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY: ITA NO. 1283/2019 RAJASTHAN NURSING COUNCIL VS. CIT(E) 29 PROVIDED THAT THE ADVANCEMENT OF ANY OTHER OBJECT O F GENERAL PUBLIC UTILITY SHALL NOT BE A CHARITABLE PURPOSE, IF IT IN VOLVES THE CARRYING ON OF ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BU SINESS, OR ANY ACTIVITY OF RENDERING ANY SERVICE IN RELATION TO AN Y TRADE, COMMERCE OR BUSINESS FOR A CESS OR FEE OR ANY OTHER CONSIDERATI ON, IRRESPECTIVE OF THE NATURE OF USE OR APPLICATION, OR RETENTION, OF THE INCOME FROM SUCH ACTIVITY.' IN THESE CIRCUMSTANCES, 'RENDERING ANY SERVICE IN R ELATION TO TRADE, COMMERCE OR BUSINESS' CANNOT, IN THE OPINION OF THE COURT, RECEIVE SUCH A WIDE CONSTRUCTION AS TO ENFOLD REGULATORY AND SOV EREIGN AUTHORITIES, SET UP UNDER STATUTORY ENACTMENTS, AND TASKED TO AC T AS AGENCIES OF THE STATE IN PUBLIC DUTIES WHICH CANNOT BE DISCHARGED B Y PRIVATE BODIES. OFTEN, APART FROM THE CONTROLLING OR PARENT STATUTE S, LIKE THE BIS ACT, THESE STATUTORY BODIES (INCLUDING BIS) ARE EMPOWERE D TO FRAME RULES OR REGULATIONS, EXERCISE COERCIVE POWERS, INCLUDING IN SPECTION, RAIDS; THEY POSSESS SEARCH AND SEIZURE POWERS AND ARE INVARIABL Y SUBJECTED TO PARLIAMENTARY OR LEGISLATIVE OVERSIGHT. THE PRIMARY OBJECT FOR SETTING UP SUCH REGULATORY BODIES WOULD BE TO ENSURE GENERAL P UBLIC UTILITY. THE PRESCRIBING OF STANDARDS, AND ENFORCING THOSE STAND ARDS, THROUGH ACCREDITATION AND CONTINUING SUPERVISION THROUGH IN SPECTION ETC, CANNOT BE CONSIDERED AS TRADE, BUSINESS OR COMMERCIAL ACTI VITY, MERELY BECAUSE THE TESTING PROCEDURES, OR ACCREDITATION INVOLVES C HARGING 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 O F OPINION THAT THE IMPUGNED ORDER OF THE DIRECTOR OF INCOME TAX DATED 24.2.2012 IS CONTRARY TO LAW. IT IS HEREBY QUASHED. THE RESPONDE NTS ARE DIRECTED TO PROCESS THE CASE OF BIS AND ISSUE THE EXEMPTION HIT HERTO ENJOYED BY IT, UNDER SECTION 10 (23) OF THE ACT, WITHIN 10 WEEKS F ROM 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 (DELHI), THE HONBLE DEL HI HIGH COURT HAS HELD AS UNDER: ITA NO. 1283/2019 RAJASTHAN NURSING COUNCIL VS. CIT(E) 30 14. A BARE PERUSAL OF THE MAIN PROVISION INDICATES THAT THERE ARE FOUR MAIN FACTORS THAT NEED TO BE TAKEN INTO CONSIDERATI ON BEFORE CLASSIFYING THE ACTIVITY OF THE ASSESSEE AS 'CHARITABLE' UNDER THE RESIDUARY CATEGORY, I.E. 'ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY' UNDER SECTION 2(15) OF THE ACT. THE FOUR FACTORS AR E (I) ACTIVITY SHOULD BE FOR ADVANCEMENT OF GENERAL PUBLIC UTILITY (II) A CTIVITY SHOULD NOT INVOLVE ANY ACTIVITY IN THE NATURE OF TRADE, COMMER CE AND BUSINESS (III) ACTIVITY SHOULD NOT INVOLVE RENDERING ANY SERVICE I N RELATION TO ANY TRADE, COMMERCE OR BUSINESS (IV) ACTIVITIES IN CLAU SE (II) AND (III) SHOULD NOT BE FOR FEE, CESS OR OTHER CONSIDERATION AND IF FOR FEE, CESS OR CONSIDERATION THE AGGREGATE VALUE OF THE RECEIPTS F ROM THE ACTIVITIES UNDER (II) AND (III) SHOULD NOT EXCEED THE AMOUNT S PECIFIED IN THE SECOND PROVISO. THE EARLIER TEST OF BUSINESS FEEDING OR AP PLICATION OF INCOME EARNED TOWARDS CHARITY BECAUSE OF THE STATUTORY AME NDMENT IS NO LONGER RELEVANT AND APPOSITE. 15. IN INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA V. DIRECTOR GENERAL OF INCOME-TAX (EXEMPTIONS) [2012] 347 ITR 99/[2011] 202 TAXMAN 1/13 TAXMANN.COM 175 (DELHI) 'CHARITABLE PURPOSE' U NDER RESIDUARY CLAUSE OF SECTION 2(15) WAS DISCUSSED AND EXPLAINED IN THE FOLLOWING WORDS (PAGE 108): 'THE PROVISO APPLIES ONLY IF AN INSTITUTION IS ENGA GED IN ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY AND POST ULATES THAT SUCH AN INSTITUTE IS NOT 'CHARITABLE' IF IT IS INVOLVED IN CARRYING ON ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS OR ANY AC TIVITY OF RENDERING ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR B USINESS. THE SECOND PART, 'ANY ACTIVITY OF RENDERING ANY SERVICE IN REL ATION TO ANY TRADE, COMMERCE OR BUSINESS' OBVIOUSLY INTENDS TO EXPAND T HE SCOPE OF THE PROVISO TO INCLUDE SERVICES, WHICH ARE RENDERED IN RELATION TO ANY TRADE, COMMERCE OR BUSINESS. THE PROVISO FURTHER STIPULATE S THAT THE ACTIVITY MUST BE FOR A CESS OR FEE OR ANY OTHER CONSIDERATIO N. THE LAST PART STATES THAT THE PROVISO WILL APPLY EVEN IF THE CESS OR FEE OR ANY OTHER CONSIDERATION IS APPLIED FOR A CHARITABLE ACTIVITY/ PURPOSE. THE PROVISO HAS TO BE GIVEN FULL EFFECT TO. THUS, EVEN IF CESS, FEE OR CONSIDERATION IS USED OR UTILIZED FOR CHARITABLE PURPOSES, THE PROVI SO AND THE BAR WILL APPLY. AN INSTITUTION WILL NOT BE REGARDED AS ESTAB LISHED 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 ITA NO. 1283/2019 RAJASTHAN NURSING COUNCIL VS. CIT(E) 31 BUSINESS OR FOR ANY ACTIVITY OF RENDERING OF ANY SE RVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSINESS, EVEN IF THE CONSIDERAT ION OR THE MONEY RECEIVED IS USED IN FURTHERANCE OF THE CHARITABLE P URPOSES/ACTIVITIES. IN VIEW OF THE FIRST PROVISO, THE DECISIONS THAT THE A PPLICATION OF MONEY/PROFIT IS RELEVANT FOR DETERMINING WHETHER OR NOT A PERSON IS CARRYING ON CHARITABLE ACTIVITY, ARE NO LONGER RELE VANT AND APPOSITE. EVEN IF THE PROFITS EARNED ARE USED FOR CHARITABLE PURPOSES, BUT FEE, CESS OR CONSIDERATION IS CHARGED BY A PERSON FOR CA RRYING 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 OBSER VED WAS CONSEQUENTIAL PROFIT MOTIVE OR PURPOSE BEHIND THE A CTIVITY AND WHEN AN ACTIVITY IS TRADE, COMMERCE OR BUSINESS WAS ELUCIDA TED IN INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA V. DIRECTOR-GENERAL OF INCOME-TAX (EXEMPTIONS) [2012] 347 ITR 99 (DELHI) IN THE FOLLO WING WORDS (PAGE 123): 'SECTION 2(15) DEFINES THE TERM CHARITABLE PURPOSE. THEREFORE, WHILE CONSTRUING THE TERM BUSINESS FOR THE SAID SECTION, THE OBJECT AND PURPOSE OF THE SECTION HAS TO BE KEPT IN MIND. WE D O NOT THINK THAT A VERY BROAD AND EXTENDED DEFINITION OF THE TERM BUSI NESS IS INTENDED FOR THE PURPOSE OF INTERPRETING AND APPLYING THE FIRST PROVISO TO SECTION 2(15) OF THE ACT TO INCLUDE ANY TRANSACTION FOR A F EE OR MONEY. AN ACTIVITY WOULD BE CONSIDERED 'BUSINESS' IF IT IS UN DERTAKEN WITH A PROFIT MOTIVE, BUT IN SOME CASES THIS MAY NOT BE DETERMINA TIVE. NORMALLY THE PROFIT MOTIVE TEST SHOULD BE SATISFIED BUT IN A GIV EN CASE ACTIVITY MAY BE REGARDED AS BUSINESS EVEN WHEN PROFIT MOTIVE CANNOT BE ESTABLISHED/PROVED. IN SUCH CASES, THERE SHOULD BE EVIDENCE AND MATERIAL TO SHOW THAT THE ACTIVITY HAS CONTINUED ON SOUND AND RECOGNIZED BUSINESS PRINCIPLES, AND PURSUED WITH RE ASONABLE CONTINUITY. THERE SHOULD BE FACTS AND OTHER CIRCUMSTANCES WHICH JUSTIFY AND SHOW THAT THE ACTIVITY UNDERTAKEN IS INFECT IN THE NATUR E OF BUSINESS. THE TEST AS PRESCRIBE IN RAIPUR MANUFACTURING COMPANY (SUPRA ) AND SAI PUBLICATIONS FUND (SUPRA) CAN BE APPLIED. THE SIX I NDICIA STIPULATED ITA NO. 1283/2019 RAJASTHAN NURSING COUNCIL VS. CIT(E) 32 IN LORD FISHER (SUPRA) ARE ALSO RELEVANT. EACH CASE , THEREFORE, HAS TO BE EXAMINED ON ITS OWN FACTS.' 20. RECENTLY IN ANOTHER DECISION IN WP(C) NO. 1755 /2012 TITLED BUREAU OF INDIAN STANDARDS V. DIRECTOR GENERAL OF INCOME-T AX (EXEMPTIONS) [2013] 212 TAXMAN 210/[2012] 27 TAXMAN N.COM 127 (DELHI) IT WAS HELD THAT BUREAU OF INDIAN STANDARDS (BIS) WAS CARRYING ON CHARITABLE ACTIVITIES AS DESCRIBED WITHIN THE AM BIT OF SECTION 2(15) AND WAS ENTITLED TO REGISTRATION/NOTIFICATION UNDER SECTION 10(23C)(IV). WE, HOWEVER, NOTE THAT THERE IS ONE DISTINCTION BET WEEN THE PRESENT PETITIONER AND BIS. BIS IS A STATUTORY AUTHORITY CR EATED BY LEGISLATION AND, THEREFORE, THEIR CASE AND CLAIM STANDS ON A BE TTER FOOTING BUT THIS DOES NOT IMPLY THAT ONLY STATUTORY BODIES CAN BE TR EATED AS ESTABLISHED FOR CHARITABLE PURPOSE UNDER SECTION 2(15) OF THE A CT. SUCH CONTENTION HAS NOT BEEN RAISED AND CANNOT BE SUSTAINED/ACCEPTE D. CIRCULAR NO. 11 OF 2008 BY THE CENTRAL BOARD OF DIR ECT TAXES 21. IT MAY BE RELEVANT TO REPRODUCE EXTRACT FROM CI RCULAR NO. 11 OF 2008 ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES EX PLAINING THE AMENDMENTS TO SECTION 2(15) OF THE ACT. THE RELEVAN T 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 PUBL IC UTILITY. 2. AN ENTITY WITH A CHARITABLE OBJECT OF THE ABOVE NATURE WAS ELIGIBLE FOR EXEMPTION FROM TAX UNDER SECTION 11 OR ALTERNATIVEL Y UNDER SECTION 10(23C) OF THE ACT. HOWEVER, IT WAS SEEN THAT A NUM BER OF ENTITIES WHO WERE ENGAGED IN COMMERCIAL ACTIVITIES WERE ALSO CLA IMING EXEMPTION ON THE GROUND THAT SUCH ACTIVITIES WERE FOR THE ADVANC EMENT OF OBJECTS OF GENERAL PUBLIC UTILITY IN TERMS OF THE FOURTH LIMB OF THE DEFINITION OF ITA NO. 1283/2019 RAJASTHAN NURSING COUNCIL VS. CIT(E) 33 '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' I.E. THE FOURTH LIMB OF THE DEFINITION OF 'CHARITABLE PURPOSE' CONTAINED IN SECTION 2(15). HENCE, SUCH ENTITIES WI LL NOT BE ELIGIBLE FOR EXEMPTION UNDER SECTION 11 OR UNDER SECTION 10(23C) OF THE ACT IF THEY CARRY ON COMMERCIAL ACTIVITIES. WHETHER SUCH AN ENT ITY IS CARRYING ON AN ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINE SS IS A QUESTION OF FACT WHICH WILL BE DECIDED BASED ON THE NATURE, SCO PE, EXTENT AND FREQUENCY OF THE ACTIVITY. 3.2 IN THE FINAL ANALYSIS, HOWEVER, WHETHER THE ASS ESSEE HAS FOR ITS OBJECT 'THE ADVANCEMENT OF ANY OTHER OBJECT OF GENE RAL PUBLIC UTILITY' IS A QUESTION OF FACT. IF SUCH ASSESSEE IS ENGAGED IN ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS OR RENDERS AN Y SERVICE IN RELATION TO TRADE, COMMERCE OR BUSINESS, IT WOULD NOT BE ENT ITLED TO CLAIM THAT ITS OBJECT IS CHARITABLE PURPOSE. IN SUCH A CASE, T HE OBJECT OF 'GENERAL PUBLIC UTILITY' WILL BE ONLY A MASK OR A DEVICE TO HIDE THE TRUE PURPOSE WHICH IS TRADE, COMMERCE OR BUSINESS OR THE RENDERI NG OF ANY SERVICE IN RELATION TO TRADE, COMMERCE OR BUSINESS. EACH CASE WOULD, THEREFORE, BE DECIDED ON ITS OWN FACTS AND NO GENERALIZATION IS P OSSIBLE. ASSESSEES, WHO CLAIM THAT THEIR OBJECT IS 'CHARITABLE PURPOSE' WITHIN THE MEANING OF SECTION 2(15), WOULD BE WELL ADVISED TO ESCHEW ANY ACTIVITY WHICH IS IN THE NATURE OF TRADE, COMMERCE OR BUSINESS OR THE RE NDERING OF ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSIN ESS.' (EMPHASIS SUPPLIED) 22. IT IS, EVIDENT FROM THE CIRCULAR NO. 11 OF 2008 THAT THE NEW PROVISO OF SECTION 2(15) OF THE ACT IS APPLICABLE T O THE ASSESSEES WHO ARE ENGAGED IN COMMERCIAL ACTIVITIES, I.E. CARRYING ON BUSINESS, TRADE OR COMMERCE, IN THE GARB OF 'PUBLIC UTILITY' TO AVOID TAX LIABILITY AS IT WAS NOTICED THAT OBJECT OF 'GENERAL PUBLIC UTILITY' WAS SOMETIMES ONLY A MASK OR DEVICE TO HIDE THE TRUE PURPOSE WHICH WAS ' TRADE, COMMERCE OR BUSINESS.' DISCUSSION; ACTIVITIES OF THE PETITIONER AND DIFFER ENCE BETWEEN BUSINESS AND CHARITY ITA NO. 1283/2019 RAJASTHAN NURSING COUNCIL VS. CIT(E) 34 23. IN THE PRESENT CASE, 'THE BUSINESS' IS NOT HELD IN TRUST AND NEITHER IS 'THE BUSINESS' FEEDING THE CHARITY. THE VERY 'ACT O R ACTIVITY OF CHARITY' AS CLAIMED BY THE PETITIONER IS REGARDED BY THE REV ENUE AS NOTHING BUT BUSINESS, TRADE OR COMMERCE. MONEY RECEIVED, OF COU RSE IS USED AND UTILIZED FOR THE CHARITABLE ACTIVITIES. FOUR REASON S ARE ELUCIDATED AND PROPOUND IN THE IMPUGNED ORDER TO STATE THAT THE PE TITIONER IS ENGAGED IN BUSINESS, TRADE OR COMMERCE AND AFORESAID ENCAPS ULATED IN THE IMPUGNED ORDER. PETITIONER HAS ACQUIRED INTELLECTUA L PROPERTY RIGHTS, RECEIVES FEE FROM THIRD PARTIES, WHICH IS NOTHING B UT PAYMENT OF ROYALTY, THERE IS HUGE SURPLUS OF RECEIPTS OVER EXPENDITURE (REFER TABLE REPRODUCED IN PARAGRAPH 7 ABOVE) AND PAYMENT IS MAD E BY THE PETITIONER TO GS1 GLOBAL SERVICES, BELGIUM. 24. CAN IT BE SAID THAT THE PETITIONER IS ENGAGED I N ACTIVITIES WHICH CONSTITUTE BUSINESS, COMMERCE OR TRADE? AS OBSERVED ABOVE, LEGAL TERMS 'TRADE, COMMERCE, OR BUSINESS' IN SECTION 2(1 5), MEANS ACTIVITY UNDERTAKEN WITH A VIEW TO MAKE OR EARN PROFIT. PROF IT MOTIVE IS DETERMINATIVE AND A CRITICAL FACTOR TO DISCERN WHET HER AN ACTIVITY IS BUSINESS, TRADE OR COMMERCE. 25. BUSINESS ACTIVITY HAS AN IMPORTANT PERVADING EL EMENT OF SELF- INTEREST, THOUGH FAIR DEALING SHOULD AND CAN BE PRE SENT, WHILST CHARITY OR CHARITABLE ACTIVITY IS ANTI-THESIS OF ACTIVITY UNDE RTAKEN WITH PROFIT MOTIVE OR ACTIVITY UNDERTAKEN ON SOUND OR RECOGNIZED BUSIN ESS PRINCIPLES. CHARITY IS DRIVEN BY ALTRUISM AND DESIRE TO SERVE O THERS, THOUGH ELEMENT OF SELF-PRESERVATION MAY BE PRESENT. FOR CHARITY, B ENEVOLENCE SHOULD BE OMNIPRESENT AND DEMONSTRABLE BUT IT IS NOT EQUIVALE NT TO SELF-SACRIFICE AND ABNEGATION. THE ANTIQUATED DEFINITION OF CHARIT Y, WHICH ENTAILS GIVING AND RECEIVING NOTHING IN RETURN IS OUTDATED. A MANDATORY FEATURE WOULD BE; CHARITABLE ACTIVITY SHOULD BE DEVOID OF S ELFISHNESS OR ILLIBERAL SPIRIT. ENRICHMENT OF ONESELF OR SELF-GAIN SHOULD B E MISSING AND THE PREDOMINANT PURPOSE OF THE ACTIVITY SHOULD BE TO SE RVE AND BENEFIT OTHERS. A SMALL CONTRIBUTION BY WAY OF FEE THAT THE BENEFICIARY PAYS WOULD NOT CONVERT CHARITABLE ACTIVITY INTO BUSINESS , COMMERCE OR TRADE IN THE ABSENCE OF CONTRARY EVIDENCE. QUANTUM OF FEE CHARGED, ECONOMIC STATUS OF THE BENEFICIARIES WHO PAY, COMMERCIAL VAL UE OF BENEFITS IN COMPARISON TO THE FEE, PURPOSE AND OBJECT BEHIND TH E FEE ETC. ARE SEVERAL FACTORS WHICH WILL DECIDE THE SEMINAL QUEST ION, IS IT BUSINESS? ITA NO. 1283/2019 RAJASTHAN NURSING COUNCIL VS. CIT(E) 35 26. THE PETITIONER CHARGES AN INITIAL REGISTRATION FEE OF RS. 20,000/- PLUS ANNUAL FEE OF RS. 4,000/-, ENHANCED TO RS. 5,000/- FROM FINANCIAL YEAR 2006-07 ONWARDS FROM THIRD PARTIES, WHO BECOME SUBS CRIBING MEMBERS AND ARE ENTITLED TO USE THE CODING SYSTEM, GS1. REV ENUE ACKNOWLEDGES THAT THE PETITIONER ENJOYS MONOPOLY AND HAS EXCLUSI VE RIGHTS TO ISSUE GLOBAL BAR CODING SYSTEM GS1 IN INDIA. HOWEVER THE PETITIONER IS NOT DEALING OR TREATING THE PRIZED RIGHTS AS A RIGHT, W HICH IS TO BE EXPLOITED COMMERCIALLY TO EARN OR GENERATE PROFITS. A CODING SYSTEM OF THIS NATURE IF MARKETED ON COMMERCIAL LINES WITH PROFIT MOTIVE WOULD AMOUNT TO BUSINESS BUT WHEN THE UNDERLYING AND PROPELLING MOT IVE IS NOT TO EARN PROFITS OR COMMERCIALLY EXPLOIT THE RIGHTS BUT 'GEN ERAL PUBLIC GOOD' I.E. TO PROMOTE AND MAKE GS1 CODING SYSTEM AVAILABLE TO INDIAN TRADERS, MANUFACTURERS, GOVERNMENT ETC, IT WILL FAIL THE TES T OF BUSINESS AND MEETS THE TOUCHSTONE OF CHARITY. THE PETITIONER IS NOT DIRECTLY OR INDIRECTLY SUBJECTING THEIR ACTIVITY TO MARKET MECH ANISM/DYNAMICS (I.E. DEMAND AND SUPPLY), RATHER IT IS MOTIVATED AND PROM PTED TO SERVE THE BENEFICIARIES. THIS IS NOT A CASE OF COMMERCIAL EXP LOITATION OF INTELLECTUAL PROPERTY RIGHTS TO EARN PROFITS BUT RATHER A CASE W HERE A TOKEN FEE HAS BEEN FIXED AND PAYABLE BY THE USER OF THE GLOBAL ID ENTIFICATION SYSTEM. 27. THE PETITIONER DOES NOT CATER TO THE LOWEST OR MARGINALIZED SECTION OF THE SOCIETY, BUT GOVERNMENT, PUBLIC SECTOR AND P RIVATE SECTOR MANUFACTURERS AND TRADERS. NO FEE IS CHARGED FROM U SERS AND BENEFICIARIES LIKE STOCKIEST, WHOLE SELLERS, GOVERN MENT DEPARTMENT ETC. WHILE A NOMINAL FEE IS ONLY PAID BY THE MANUFACTURE R OR MARKETING AGENCIES I.E. THE FIRST PERSON WHO INSTALLS THE COD ING SYSTEM WHICH IS NOT AT ALL EXORBITANT IN VIEW OF THE BENEFIT AND ADVANT AGE WHICH ARE OVERWHELMING. ANY ONE FROM ANY PART OF THE WORLD CA N ACCESS THE DATABASE FOR IDENTIFICATION OF GOODS AND SERVICES U SING GLOBAL STANDARD. THE FEE IS FIXED AND NOT PRODUCT SPECIFIC OR QUANTI TY RELATED I.E. DEPENDENT UPON QUANTUM OF PRODUCTION. REGISTRATION AND ANNUAL FEE ENTITLES THE PERSON CONCERNED TO USE GS1 IDENTIFICA TION ON ALL THEIR PRODUCTS. NON LEVY OF FEE IN SUCH CASES MAY HAVE IT S OWN DISADVANTAGES AND PROBLEMS. CHARGING A NOMINAL FEE TO USE THE COD ING SYSTEM AND TO AVAIL THE ADVANTAGES AND BENEFITS THEREIN IS NEITHE R REFLECTIVE OF BUSINESS APTITUDE NOR INDICATIVE OF PROFIT ORIENTED INTENT. 28. HAVING APPLIED THE TEST MENTIONED ABOVE, INCLUD ING THE CRITERIA FOR DETERMINING WHETHER THE FEE IS COMMENSURATE AND IS BEING CHARGED ON ITA NO. 1283/2019 RAJASTHAN NURSING COUNCIL VS. CIT(E) 36 COMMERCIAL OR BUSINESS PRINCIPLES, WE FIND THAT THE PETITIONER FULFILLS THE CHARITABLE ACTIVITY TEST. IT IS APPARENT TO US THAT REVENUE HAS TAKEN A CONTRADICTORY STAND AS THEY HAVE SUBMITTED AND ACCE PTED THAT THE PETITIONER CARRIES ON CHARITABLE ACTIVITY UNDER THE RESIDUARY HEAD 'GENERAL PUBLIC UTILITY' BUT SIMULTANEOUSLY REGARDS THE SAID ACTIVITY AS BUSINESS. THUS THE CONTENTION OF THE REVENUE THAT T HE PETITIONER CHARGES FEE AND, THEREFORE, IS CARRYING ON BUSINESS , HAS TO BE REJECTED. THE INTENTION BEHIND THE ENTIRE ACTIVITY IS PHILANT HROPIC AND NOT TO RECOUP OR REIMBURSE IN MONETARY TERMS WHAT IS GIVEN TO THE BENEFICIARIES. ELEMENT OF GIVE AND TAKE IS MISSING, BUT DECISIVE ELEMENT OF BEQUEATHING IS PRESENT. IN THE ABSENCE OF 'PROFI T MOTIVE' AND CHARITY BEING THE PRIMARY AND SOLE PURPOSE BEHIND THE ACTIV ITIES OF THE PETITIONER IS PERSPICUOUSLY DISCERNIBLE AND PERCEPT IBLE. 29. TABLE RELIED ON BY THE RESPONDENT AND MENTIONED IN PARAGRAPH 7 ABOVE TELLS A PARTIAL STORY. ONLY DIRECT EXPENSES I NCURRED HAVE BEEN SET OFF FROM THE FEE EARNED FROM REGISTRATION AND RENEW AL. THE ACTIVITY OF THE PETITIONER INVOLVES PROMOTION, PROPAGATION AND SPREADING AWARENESS AND KNOWLEDGE ABOUT GLOBAL CODING IDENTIF ICATION SYSTEM GS1. THE ENTIRE EXPENDITURE OF THE PETITIONER HAS T O BE TAKEN INTO CONSIDERATION AND CANNOT BE IGNORED. THERE ARE STIP ULATIONS IN SECTIONS 11, 13 ETC. OF THE ACT TO PREVENT MISUSE OF OR SIPH ONING OF FUNDS, BAR/PROHIBIT GAINS TO RELATED PERSONS, STIPULATIONS OF TIME LIMITS FOR USE OF FUNDS, WHICH ARE EFFECTIVE CHECKS AND CURTAIL AN D DENY BENEFIT IN CASES OF ABUSE. THERE IS NO SUCH ALLEGATION OR CONT ENTION OF THE REVENUE IN THE PRESENT CASE. 30. AS OBSERVED ABOVE, FEE CHARGED AND QUANTUM OF INCOME EARNED CAN BE INDICATIVE OF THE FACT THAT THE PERSON IS CA RRYING ON BUSINESS OR COMMERCE AND NOT CHARITY, BUT WE MUST KEEP IN MIND THAT CHARITABLE ACTIVITIES REQUIRE OPERATIONAL/RUNNING EXPENSES AS WELL AS CAPITAL EXPENSES TO BE ABLE TO SUSTAIN AND CONTINUE IN LONG RUN. THE PETITIONER HAS TO BE SUBSTANTIALLY SELF-SUSTAINING IN LONG-TER M AND SHOULD NOT DEPEND UPON GOVERNMENT, IN OTHER WORDS TAXPAYERS SH OULD NOT SUBSIDIZE THE SAID ACTIVITIES, WHICH NEVERTHELESS A RE CHARITABLE AND FALL UNDER THE RESIDUARY CLAUSE 'GENERAL PUBLIC UTILITY' . THE IMPUGNED ORDER DOES NOT REFER TO ANY STATUTORY MANDATE THAT A CHAR ITABLE INSTITUTION FALLING UNDER THE LAST CLAUSE SHOULD BE WHOLLY, SUB STANTIALLY OR IN PART MUST BE FUNDED BY VOLUNTARY CONTRIBUTIONS. NO SUCH REQUIREMENT HAS ITA NO. 1283/2019 RAJASTHAN NURSING COUNCIL VS. CIT(E) 37 BEEN POINTED OUT OR ARGUED. A PRACTICAL AND PRAGMAT IC 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 AGGREGA TE VALUE OF RECEIPT OF ACTIVITIES OF RS. 10 LACS (NOW ENHANCED RS. 25 L ACS VIDE FINANCE ACT 2011 WITH EFFECT FROM 1.4.2012) OR LESS IN A PREVIO US YEAR, CANNOT BE INVOKED IN THE PRESENT CASE BECAUSE THE SAID PROVIS ION WILL APPLY ONLY IF THE INSTITUTION COVERED BY THE LAST/RESIDUARY CLAUS E IS INVOLVED OR CARRYING ON ACTIVITY OF RENDERING ANY SERVICE IN RE LATION 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 TOK EN OR INSIGNIFICANT AMOUNT FROM THE BENEFICIARIES, WHO GAIN SIGNIFICANT LY FROM THE ALTRUISM AND BENEVOLENCE. A SMALL CHARITABLE ORGANIZATION TH AT RECEIVES TOKEN FEE OF MORE THAN RS. 80,000/- A MONTH OR NOW RS. 2, 00,000/- PER MONTH APPROXIMATELY, WOULD DISQUALIFY AND LOSE THEI R CHARITABLE STATUS. THE OBJECT OF THE PROVISO IS TO DRAW A DISTINCTION BETWEEN CHARITABLE INSTITUTIONS COVERED BY LAST LIMB WHICH CONDUCT BUS INESS OR OTHERWISE BUSINESS ACTIVITIES ARE UNDERTAKEN BY THEM TO FEED CHARITY. THE PROVISO APPLIES WHEN BUSINESS WAS/IS CONDUCTED AND THE QUAN TUM OF RECEIPTS EXCEEDS THE SPECIFIED SUM. THE PROVISO DOES NOT SEE K TO DISQUALIFY CHARITABLE ORGANIZATION COVERED BY THE LAST LIMB, W HEN A TOKEN FEE IS COLLECTED FROM THE BENEFICIARIES IN THE COURSE OF A CTIVITY WHICH IS NOT A BUSINESS BUT CLEARLY CHARITY FOR WHICH THEY ARE EST ABLISHED AND THEY UNDERTAKE. 44. IN CASE OF INDIA TRADE PROMOTION ORGANIZATION VS DIRECTOR GENERAL OF INCOME-TAX (EXEMPTIONS) [2015] 53 TAXMANN.COM 404 (DELHI), THE HONBLE DELHI HIGH COURT HELD AS UNDER : 44. IT IS AN ADMITTED POSITION THAT HAD THE PROVIS O NOT BEEN INTRODUCED BY VIRTUE OF THE FINANCE ACT, 2008 WITH EFFECT FROM 01.04.2009, THE PETITIONER WOULD HAVE BEEN RECOGNIZED AS A CHARITY AND WOULD HAVE BEEN RECOGNIZED AS AN INSTITUTION ESTABLISHED FOR T HE CHARITABLE PURPOSE OF ADVANCEMENT OF AN OBJECT OF GENERAL PUBLIC UTILI TY. THE DIFFICULTY THAT HAS ARISEN FOR THE PETITIONER IS BECAUSE OF THE INT RODUCTION OF THE PROVISO TO SECTION 2(15). THE SAID PROVISO HAS TWO PARTS. THE FIRST PART ITA NO. 1283/2019 RAJASTHAN NURSING COUNCIL VS. CIT(E) 38 HAS REFERENCE TO THE CARRYING ON OF ANY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS. THE SECOND PART HAS REFERENCE TO ANY ACTIVITY OF RENDERING ANY SERVICE 'IN RELATION TO' ANY TRADE, C OMMERCE OR BUSINESS. BOTH THESE PARTS ARE FURTHER SUBJECT TO THE CONDITI ON THAT THE ACTIVITIES SO CARRIED OUT ARE FOR A CESS OR FEE OR ANY OTHER C ONSIDERATION, IRRESPECTIVE OF THE NATURE OR USE OR APPLICATION OR RETENTION OF THE INCOME FROM SUCH ACTIVITIES. IN OTHER WORDS, IF, BY VIRTUE OF A 'CESS' OR 'FEE' OR ANY OTHER CONSIDERATION, INCOME IS GENERAT ED BY ANY OF THE TWO SETS OF ACTIVITIES REFERRED TO ABOVE, THE NATURE OF USE OF SUCH INCOME OR APPLICATION OR RETENTION OF SUCH INCOME IS IRRELEVA NT FOR THE PURPOSES OF CONSTRUING THE ACTIVITIES AS CHARITABLE OR NOT. 45. TO BE CLEAR, IF AN ACTIVITY IN THE NATURE OF TR ADE, COMMERCE OR BUSINESS IS CARRIED ON AND IT GENERATES INCOME, THE FACT THAT SUCH INCOME IS APPLIED FOR CHARITABLE PURPOSES, WOULD NO T MAKE ANY DIFFERENCE AND THE ACTIVITY WOULD NONETHELESS NOT B E REGARDED AS BEING CARRIED ON FOR A CHARITABLE PURPOSE. WE HAVE SEEN T HAT BY VIRTUE OF SECTION 25 OF THE COMPANIES ACT, THE PETITIONER IS ENJOINED TO PLOUGH BACK ITS INCOME IN FURTHERANCE OF ITS OBJECT AND TH E DECLARATION OF DIVIDENDS IS PROHIBITED. IF A LITERAL INTERPRETATIO N IS TO BE GIVEN TO THE PROVISO, THEN IT MAY BE CONCLUDED THAT THIS FACT WO ULD HAVE NO BEARING ON DETERMINING THE NATURE OF THE ACTIVITY CARRIED O N 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 C ONSIDERING WHETHER ANY ACTIVITY IS ONE OF RENDERING ANY SERVICE IN REL ATION 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 CARR YING ON REGULAR TRADE, COMMERCE OR BUSINESS OR PROVIDING SERVICES I N RELATION TO ANY TRADE, COMMERCE OR BUSINESS ON THE ONE HAND AND GEN UINE CHARITABLE ORGANIZATIONS ON THE OTHER. IT MUST BE REMEMBERED T HAT WE ARE CONSTRUING THE EXPRESSION 'CHARITABLE PURPOSE' NOT IN A VACUUM, BUT IN THE SPECIFIC CONTEXT OF SECTION 10(23C)(IV) OF THE SAID ACT. AS POINTED OUT ABOVE, SECTION 10 DEALS WITH THE INCOMES NOT IN CLUDED IN TOTAL INCOME. AND, SECTION 10(23C)(IV) SPECIFICALLY DEALS WITH THE INCOME ITA NO. 1283/2019 RAJASTHAN NURSING COUNCIL VS. CIT(E) 39 RECEIVED BY ANY PERSON ON BEHALF OF, INTER ALIA, AN INSTITUTION ESTABLISHED FOR CHARITABLE PURPOSES. WE HAVE TO, THEREFORE, EXA MINE THE MEANING OF THE EXPRESSION 'CHARITABLE PURPOSES' IN THE CONTEXT OF SECTION 10(23C)(IV). LOOKING AT THE SAID EXPRESSION FROM TH IS STAND POINT, IT BECOMES CLEAR THAT IT HAS A REFERENCE TO INCOME. BE CAUSE, IT IS ONLY WHEN SUCH AN INSTITUTION HAS AN INCOME THAT THE QUE STION OF NOT INCLUDING THAT INCOME IN ITS TOTAL INCOME WOULD ARI SE. THEREFORE, MERELY BECAUSE AN INSTITUTION, WHICH OTHERWISE IS ESTABLIS HED FOR A CHARITABLE PURPOSE, RECEIVES INCOME WOULD NOT MAKE IT ANY LESS A CHARITABLE INSTITUTION. WHETHER THAT INSTITUTION, WHICH IS EST ABLISHED FOR CHARITABLE PURPOSES, WILL GET THE EXEMPTION UNDER SECTION 10(2 3C)(IV) WOULD HAVE TO BE DETERMINED BY THE PRESCRIBED AUTHORITY HAVING REGARD TO THE OBJECTS OF THE INSTITUTION AND ITS IMPORTANCE THROU GHOUT INDIA OR THROUGHOUT ANY STATE OR STATES. THERE IS NO DENYING THAT HAVING REGARD TO THE OBJECTS OF THE PETITIONER AND ITS IMPORTANCE THROUGHOUT INDIA IN THE FIELD OF ADVANCEMENT OF PROMOTION OF TRADE AND COMMERCE, THE PETITIONER WOULD BE ENTITLED TO BE REGARDED AS AN I NSTITUTION WHICH WOULD QUALIFY FOR THAT EXEMPTION. THE ONLY THING TH AT WE HAVE TO EXAMINE IS - WHETHER THE PETITIONER HAD BEEN ESTABL ISHED FOR CHARITABLE PURPOSES? THE FACT THAT IT DERIVES INCOME DOES NOT, IN ANY WAY, DETRACT FROM THE POSITION THAT IT IS AN INSTITUTION ESTABLI SHED FOR CHARITABLE PURPOSES. THEREFORE, IN OUR VIEW, MERELY BECAUSE TH E PETITIONER DERIVES RENTAL INCOME, INCOME OUT OF SALE OF TICKETS AND SA LE OF PUBLICATIONS OR INCOME OUT OF LEASING OUT FOOD AND BEVERAGES OUTLET S IN THE EXHIBITION GROUNDS, DOES NOT, IN ANY WAY, AFFECT THE NATURE OF THE PETITIONER AS A CHARITABLE INSTITUTION IF IT OTHERWISE QUALIFIES FO R SUCH A CHARACTER. 47. WE HAVE ALREADY NOTED THAT PRIOR TO THE AMENDME NT BEING INTRODUCED WITH EFFECT FROM 01.04.2009, THE PETITIO NER HAD BEEN RECOGNIZED AS AN INSTITUTION ESTABLISHED FOR CHARIT ABLE PURPOSE AND THIS HAD BEEN DONE HAVING REGARD TO THE OBJECTS OF THE I NSTITUTION AND ITS IMPORTANCE THROUGHOUT INDIA. IT IS ONLY BECAUSE OF THIS THAT THE PETITIONER HAD BEEN GRANTED THE EXEMPTION BY THE RE SPONDENT FOR THE PERIOD PRIOR TO ASSESSMENT YEAR 2009-10. THEREFORE, INSOFAR AS THE RECEIVING OF INCOME IS CONCERNED, THAT CANNOT BE TA KEN 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 INSTITUTI ON ESTABLISHED FOR ITA NO. 1283/2019 RAJASTHAN NURSING COUNCIL VS. CIT(E) 40 CHARITABLE PURPOSES DID NOT RECEIVE AN INCOME AT AL L, 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 EXPRES SION 'CHARITABLE PURPOSE' SO AS TO SUGGEST THAT IN CASE AN INSTITUTI ON, 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 UN DER SECTION 10(23C)(IV) OF THE SAID ACT. AND, THE SAID PROVISIO N WOULD BE RENDERED REDUNDANT. THIS IS SO, BECAUSE, IF THE INSTITUTION HAD NO INCOME, RECOURSE TO SECTION 10(23C)(IV) WOULD NOT BE NECESS ARY. AND, IF SUCH AN INSTITUTION HAD AN INCOME, IT WOULD NOT, ON THE INT ERPRETATION SOUGHT TO BE GIVEN BY THE REVENUE, BE QUALIFIED FOR BEING CON SIDERED AS AN INSTITUTION ESTABLISHED FOR CHARITABLE PURPOSES. SO , EITHER WAY, THE PROVISIONS OF SECTION 10(23C)(IV) WOULD NOT BE AVAI LABLE, EITHER BECAUSE IT IS NOT NECESSARY OR BECAUSE IT IS BLOCKED. THE I NTENTION BEHIND INTRODUCING THE PROVISO TO SECTION 2(15) OF THE SAI D ACT COULD CERTAINLY NOT HAVE BEEN TO RENDER THE PROVISIONS OF SECTION 1 0(23C)(IV) REDUNDANT. 48. WITH THIS IN MIND, IT IS TO BE SEEN AS TO WHAT IS MEANT BY THE EXPRESSIONS 'TRADE', 'COMMERCE' OR 'BUSINESS'. THE WORD 'TRADE' WAS CONSIDERED BY THE SUPREME COURT IN ITS DECISION IN THE CASE OF KHODAY DISTILLERIES LTD. V. STATE OF KARNATAKA [1995] 1 SC C 574, WHEREBY THE SUPREME COURT HELD THAT 'THE PRIMARY MEANING OF THE WORD 'TRADE' IS THE EXCHANGE OF GOODS FOR GOODS OR GOODS FOR MONEY' . FURTHERMORE, IN STATE OF ANDHRA PRADESH V. H. ABDUL BAKHI & BROS . [1964] 5 STC 644 (SC), THE SUPREME COURT HELD THAT 'THE WORD 'BUSINE SS' WAS OF INDEFINITE IMPORT AND IN A TAXING STATUTE, IT IS US ED IN THE SENSE OF AN OCCUPATION, OR PROFESSION WHICH OCCUPIES TIME, ATTE NTION OR LABOUR OF A PERSON, AND IS CLEARLY ASSOCIATED WITH THE OBJECT O F MAKING PROFIT'. THIS COURT, IN INSTITUTE OF CHARTERED ACCOUNTANTS OF IND IA'S CASE (SUPRA) HELD THAT, WHILE CONSTRUING THE TERM 'BUSINESS' AS APPEA RING IN THE PROVISO TO SECTION 2(15), THE OBJECT AND PURPOSE OF THE SEC TION HAS TO BE KEPT IN MIND. IT WAS OBSERVED THEREIN THAT A VERY BROAD AND EXTENDED DEFINITION OF THE TERM 'BUSINESS' WAS NOT INTENDED FOR THE PURPOSE OF INTERPRETING AND APPLYING THE FIRST PROVISO TO SECT ION 2(15) OF THE ACT SO AS TO INCLUDE ANY TRANSACTION FOR A CESS, FEE OR CO NSIDERATION. THE COURT SPECIFICALLY HELD THAT: ITA NO. 1283/2019 RAJASTHAN NURSING COUNCIL VS. CIT(E) 41 'AN ACTIVITY WOULD BE CONSIDERED 'BUSINESS' IF IT I S UNDERTAKEN WITH A PROFIT MOTIVE, BUT IN SOME CASES, THIS MAY NOT BE D ETERMINATIVE. NORMALLY, THE PROFIT MOTIVE TEST SHOULD BE SATISFIE D, BUT IN A GIVEN CASE ACTIVITY MAY BE REGARDED AS A BUSINESS EVEN WHEN PR OFIT MOTIVE CANNOT BE ESTABLISHED/PROVED. IN SUCH CASES, THERE SHOULD BE EVIDENCE AND MATERIAL TO SHOW THAT THE ACTIVITY HAS CONTINUED ON SOUND AND RECOGNIZED BUSINESS PRINCIPLES AND PURSUED WITH REA SONABLE CONTINUITY. THERE SHOULD BE FACTS AND OTHER CIRCUMSTANCES WHICH JUSTIFY AND SHOW THAT THE ACTIVITY UNDERTAKEN IS IN FACT IN THE NATU RE OF BUSINESS.' 53. FROM THE SAID DECISION, IT IS APPARENT THAT MER ELY BECAUSE A FEE OR SOME OTHER CONSIDERATION IS COLLECTED OR RECEIVED B Y AN INSTITUTION, IT WOULD NOT LOSE ITS CHARACTER OF HAVING BEEN ESTABLI SHED 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 QUES TION. IF THE DOMINANT ACTIVITY OF THE INSTITUTION WAS NOT BUSINESS, TRADE OR COMMERCE, THEN ANY SUCH INCIDENTAL OR ANCILLARY ACTIVITY WOULD ALS O NOT FALL WITHIN THE CATEGORIES OF TRADE, COMMERCE OR BUSINESS. IT IS CL EAR 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. C LEARLY, THIS IS A CHARITABLE PURPOSE, WHICH HAS AS ITS MOTIVE THE ADV ANCEMENT OF AN OBJECT OF GENERAL PUBLIC UTILITY TO WHICH THE EXCEP TION CARVED OUT IN THE FIRST PROVISO TO SECTION 2(15) OF THE SAID ACT WOUL D 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 CONSTITUTION). IT IS WELL-SETTLED THAT THE COURTS SHOULD ALWAYS ENDEAVOUR TO UPHOLD THE CONSTI TUTIONAL VALIDITY OF A PROVISION AND, IN DOING SO, THE PROVISION IN QUES TION MAY HAVE TO BE READ DOWN, AS POINTED OUT ABOVE, IN ARUN KUMAR CASE (SUPRA). 54. IT WOULD BE PERTINENT TO REITERATE THAT SECTION 2(15) IS ONLY A DEFINITION CLAUSE. SECTION 2 BEGINS WITH THE WORDS, 'IN THIS ACT, UNLESS THE CONTEXT OTHERWISE REQUIRES'. THE EXPRESSION 'CH ARITABLE PURPOSE' APPEARING IN SECTION 2(15) OF THE SAID ACT HAS TO B E SEEN IN THE CONTEXT OF SECTION 10(23C)(IV). WHEN THE EXPRESSION 'CHARIT ABLE PURPOSE', AS DEFINED IN SECTION 2(15) OF THE SAID ACT, IS READ I N THE CONTEXT OF SECTION 10(23C)(IV) OF THE SAID ACT, WE WOULD HAVE TO GIVE UP THE STRICT AND ITA NO. 1283/2019 RAJASTHAN NURSING COUNCIL VS. CIT(E) 42 LITERAL INTERPRETATION SOUGHT TO BE GIVEN TO THE EX PRESSION 'CHARITABLE PURPOSE' BY THE REVENUE. WITH RESPECT, WE DO NOT AGREE WITH THE VIEWS OF THE KERALA AND ANDHRA PRADESH HIGH COURTS. 55. IT WOULD BE APPROPRIATE TO ALSO EXAMINE THE OBS ERVATIONS OF ANOTHER DIVISION BENCH OF THIS COURT IN G.S.1'S CASE (SUPRA ). WHILE CONSIDERING CIRCULAR NO.11 OF 2008 ISSUED BY THE CBDT, TO WHICH A REFERENCE HAS BEEN MADE EARLIER IN THIS JUDGMENT, THE DIVISION BE NCH HELD THAT IT WAS EVIDENT FROM THE SAID CIRCULAR THAT THE NEW PROVISO TO SECTION 2(15) OF THE SAID ACT WAS 'APPLICABLE TO ASSESSES, WHO ARE E NGAGED IN COMMERCIAL ACTIVITIES, I.E., CARRYING ON BUSINESS, TRADE OR COMMERCE, IN THE GARB OF 'PUBLIC UTILITIES' TO AVOID TAX LIABILI TY AS IT WAS NOTICED THAT THE OBJECT 'GENERAL PUBLIC UTILITY' WAS SOMETIMES U SED AS A MASK OR DEVICE TO HIDE THE TRUE PURPOSE, WHICH WAS 'TRADE, COMMERCE OR BUSINESS'.' FROM THIS, IT IS EVIDENT THAT THE INTRO DUCTION OF THE PROVISO TO SECTION 2(15) BY VIRTUE OF THE FINANCE ACT, 2008 WA S DIRECTED TO PREVENT THE UNHOLY PRACTICE OF PURE TRADE, COMMERCE AND BUSINESS ENTITIES FROM MASKING THEIR ACTIVITIES AND PORTRAYI NG THEM IN THE GARB OF AN ACTIVITY WITH THE OBJECT OF A GENERAL PUBLIC UTI LITY. IT WAS NOT DESIGNED TO HIT AT THOSE INSTITUTIONS, WHICH HAD TH E ADVANCEMENT OF THE OBJECTS OF GENERAL PUBLIC UTILITY AT THEIR HEARTS A ND WERE CHARITY INSTITUTIONS. THE ATTEMPT WAS TO REMOVE THE MASKS F ROM THE ENTITIES, WHICH WERE PURELY TRADE, COMMERCE OR BUSINESS ENTIT IES, AND TO EXPOSE THEIR TRUE IDENTITIES. THE OBJECT WAS NOT TO HURT G ENUINE CHARITABLE ORGANIZATIONS. AND, THIS WAS ALSO THE ASSURANCE GIV EN 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 HONBLE RAJASTHAN HIGH COURT HELD AS UNDER: 27. FROM VARIOUS DECISIONS OF THE HONBLE SUPREME COURT DISCUSSED HEREINABOVE, THE SETTLED POSITION OF LAW EMERGES IS THAT IF THE PRIMARY OR PREDOMINANT OBJECT OF AN INSTITUTION IS CHARITAB LE, ANY OTHER OBJECT WHICH MIGHT NOT BE CHARITABLE BUT WHICH IS ANCILLAR Y OR INCIDENTAL TO THE DOMINANT PURPOSE, MAY BE INVOLVING ELEMENT OF PROFI T, WOULD NOT PREVENT THE INSTITUTION FROM BEING A VALID CHARITAB LE TRUST. ITA NO. 1283/2019 RAJASTHAN NURSING COUNCIL VS. CIT(E) 43 28. IN THE BACKDROP OF SETTLED POSITION OF LAW DISC USSED HEREINABOVE, ADVERTING TO THE FACTS OF THE PRESENT CASE, INDUBIT ABLY, JDA IS A STATUTORY BODY CONSTITUTED AND ESTABLISHED UNDER TH E PROVISIONS OF SECTION 3 OF JDA ACT WITH A MAIN OBJECT TO SECURE T HE INTEGRATED DEVELOPMENT OF JODHPUR REGION AND FOR THAT PURPOSE TO DISCHARGE INTER ALIA THE FUNCTIONS OF URBAN PLANNING INCLUDING PREP ARATION OF MASTER DEVELOPMENT PLAN AND ZONAL DEVELOPMENT PLANS; FORMU LATION AND SANCTION OF THE PROJECTS AND SCHEMES FOR THE DEVELO PMENT OF JODHPUR REGION OR ANY PART THEREOF; EXECUTION OF THE PROJEC T AND SCHEMES DIRECTLY BY ITSELF OR THROUGH A LOCAL AUTHORITY OR OTHER AGENCY; COORDINATING EXECUTION OF PROJECTS OR SCHEMES FOR T HE DEVELOPMENT OF JODHPUR REGION SUPERVISION OR OTHERWISE ENSURING AD EQUATE SUPERVISION OVER THE PLANNING AND EXECUTION OF ANY PROJECT OR S CHEME THE EXPENSES OF WHICH IN WHOLE OR IN PART ARE TO BE MET FROM JOD HPUR REGION DEVELOPMENT FUNDS; PREPARING SCHEMES AND ADVISING T HE CONCERNED AUTHORITIES, DEPARTMENT AND AGENCIES IN FORMULATING AND UNDERTAKING SCHEMES FOR DEVELOPMENT OF AGRICULTURE HORTICULTURE , FORESTRY, DAIRY DEVELOPMENT, TRANSPORT, COMMUNICATION, SCHOOLING, C ULTURAL ACTIVITIES, SPORTS, MEDICINE, TOURISM AND SIMILAR OTHER ACTIVIT IES; TO PREPARE MASTER PLAN FOR TRAFFIC CONTROL AND MANAGEMENT; DEVISE POL ICY AND PROGRAMMES OF ACTION FOR SMOOTH FLOW OF TRAFFIC AND MATTERS CO NNECTED THEREWITH; UNDERTAKING HOUSING ACTIVITY IN JODHPUR REGION ETC. , ARE ESSENTIALLY THE FUNCTIONS, WHICH PROMOTE THE WELFARE OF THE GENERAL PUBLIC. OF COURSE, WHILE DISCHARGING THE SAID FUNCTIONS, THE JDA ALSO DISCHARGES FUNCTION TO ACQUIRE, HOLD, MANAGE AND DISPOSE OF PROPERTY MOVAB LE OR IMMOVABLE AS MAY BE DEEMED NECESSARY AND ALSO ENTERS INTO CON TRACT, AGREEMENTS OR ARRANGEMENTS WITH ANY PERSON OR ORGANIZATION MAY DEEM NECESSARY FOR PERFORMING ITS FUNCTION AND IN THIS PROCESS, IT MIGHT BE EARNING INCOME BUT THE PRIMARY OBJECT OF THE JDA CERTAINLY DOES NOT INVOLVE ANY PROFIT MOTIVE WHATSOEVER. IT IS PERTINENT TO NOTE T HAT AS PER THE PROVISIONS OF SECTION 51 OF THE JDA ACT, FOR THE PU RPOSE OF DISCHARGING THE STATUTORY FUNCTIONS, 'THE JODHPUR REGION DEVELO PMENT FUND' IS CREATED TO WHICH ALL MONEY RECEIVED BY THE AUTHORIT Y IS CREDITED INCLUDING AMOUNT OF CONTRIBUTION TO BE MADE BY THE STATE GOVERNMENT, SUCH OTHER MONEY AS MAY BE PAID TO THE AUTHORITY BY THE STATE GOVERNMENT, CENTRAL GOVERNMENT OR ANY OTHER AUTHORI TY OR AGENCY BY WAY OF GRANT, LOANS ADVANCES OR OTHERWISE, INCOME D ERIVED FROM PREMIUM ON SECOND AND SUBSEQUENT SALE OF VACANT LAN D, INCOME FROM ITA NO. 1283/2019 RAJASTHAN NURSING COUNCIL VS. CIT(E) 44 LEVY ON VACANT LAND, ALL FEES, COSTS AND CHARGES RE CEIVED BY THE JDA UNDER THE JDA ACT OR ANY OTHER LAW FOR TIME BEING I N FORCE, ALL MONEY RECEIVED BY THE JDA FROM THE DISPOSAL OF LAND BUILD INGS AND OTHER PROPERTY MOVABLE AND IMMOVABLE AND OTHER TRANSACTIO NS INCLUDING LEASE MONEY, URBAN ASSESSMENT DEVELOPMENT CHARGES AND OTH ER 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 AN D 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 THA T THE ENTIRE FUNDS OF THE JDA IS MANDATORILY REQUIRED TO BE UTILIZED FOR DISC HARGING 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 UNDOUBTE DLY 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 O R 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 RE GISTRATION UNDER SECTION 12A READ WITH SECTION 12AA OF THE ACT OF 1961. AS A MATTER OF FACT, IT IS NOT EVEN THE CASE OF THE REVENUE THAT THE OBJECT OF GENERAL PUBLIC UTILITY SOUGHT TO BE ACHIEVED BY CONSTITUTION AND E STABLISHMENT OF THE JDA AS SUCH, INVOLVE CARRYING ON OF ANY ACTIVITY FO R PROFIT AND THEREFORE, IT IS IMMATERIAL IF SOME INCOME IS EARNED BY ANCILL ARY AND INCIDENTAL ACTIVITIES, WHICH AS PER THE MANDATE OF THE RELEVAN T STATUTE, IS USED FOR ACHIEVING OR IMPLEMENTING SUCH OBJECT. THE GENUINEN ESS OF THE ACTIVITIES OF THE JDA, WHICH ARE REGULATED BY THE P ROVISIONS OF THE JDA ACT AND THE RULES MADE THEREUNDER, CANNOT BE DOUBTE D. THUS, THE ORDER PASSED BY THE ITAT HOLDING THE JDA, JODHPUR E NTITLED FOR REGISTRATION UNDER SECTION 12A READ WITH SECTION 12 AA OF THE ACT OF 1961, DOES NOT SUFFER FROM ANY INFIRMITY OR ILLEGAL ITY. 46. IN LIGHT OF AFORESAID LEGAL PROPOSITIONS LAID D OWN WHEREIN THE DOMINANT PURPOSE TEST HAS BEEN REITERATED BY THE HONBLE COU RTS AND WHICH CONTINUE TO BE VALID, LETS EXAMINE THE FACTS OF THE PRESENT CA SE TO DETERMINE THE DOMINANT OBJECTIVES AND PURPOSE OF THE ASSESSEE COU NCIL. ITA NO. 1283/2019 RAJASTHAN NURSING COUNCIL VS. CIT(E) 45 47. THE ASSESSEE COUNCIL HAS BEEN ESTABLISHED BY TH E RAJASTHAN GOVERNMENT UNDER THE RAJASTHAN NURSING COUNCIL ACT, 1964 FOR THE PURPOSE OF CARRYING OUT THE PROVISIONS AS SO STATED IN THE SAI D ACT. THE PREAMBLE TO THE ACT PROVIDES THAT THE ACT HAS BEEN ENACTED BY THE R AJASTHAN STATE LEGISLATURE IN THE 50 TH YEAR OF REPUBLIC OF INDIA TO PROVIDE FOR THE REGIS TRATION OF NURSES, MIDWIVES, HEALTH VISITORS AND AUXILIARY NURSE-MIDWI VES IN THE STATE OF RAJASTHAN. WE NOW REFER TO THE OTHER RELEVANT PROVI SIONS OF THE SAID ACT AND THE SAME ARE REPRODUCED AS UNDER: 3. ESTABLISHMENT AND INCORPORATION OF COUNCIL. - T HE STATE GOVERNMENT SHALL, BY NOTIFICATION IN THE OFFICIAL GAZETTE, EST ABLISH A COUNCIL TO BE KNOWN AS THE RAJASTHAN NURSING COUNCIL FOR THE PURP OSE OF CARRYING OUT THE PROVISIONS OF THIS ACT AND SUCH COUNCIL SHALL B E A BODY CORPORATE, SHALL HAVE PERPETUAL SUCCESSION AND A COMMON SEAL A ND MAY BY THE SAID NAME SUE AND BE SUED. 4. CONSTITUTION OF THE COUNCIL. - (1) THE COUNCIL S HALL CONSIST OF THE FOLLOWING MEMBERS, NAMELY: - (A) EX-OFFICIO MEMBERS: (I) THE DIRECTOR OF MEDICAL AND HEALTH SERVICES, RA JASTHAN STATE; (II) THE ADDITIONAL DIRECTOR OF MEDICAL AND HEALTH SERVICES, RAJASTHAN JAIPUR;] (III) THE MEDICAL SUPERINTENDENT, SAWAI MANSINGH HO SPITAL, JAIPUR; (IV) THE STATE FAMILY WELFARE OFFICER, RAJASTHAN, J AIPUR; ITA NO. 1283/2019 RAJASTHAN NURSING COUNCIL VS. CIT(E) 46 (V) THE CHIEF NURSING SUPERINTENDENT OF THE STATE N URSING SERVICES, RAJASTHAN STATE; (VI) THE MATRON OR THE NURSING SUPERINTENDENT, WHOE VER IS INCHARGE OF THE NURSES TRAINING, MAHATMA GANDHI HOSPITAL, JODHP UR; (VII) THE MATRON OR THE NURSING SUPERINTENDENT, WHO EVER IS INCHARGE OF THE NURSING TRAINING AT SAWAI MANSINGH HOSPITAL, JA IPUR; , (VIII) THE MATRON OR THE NURSING SUPERINTENDENT, WH OEVER IS INCHARGE OF NURSES TRAINING, P.B. M. WOMEN'S HOSPITAL, BIKANER, AND (IX) THE MATRON OR THE NURSING SUPERINTENDENT, WHOE VER 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 DURLABHJ I MEMORIAL HOSPITAL, JAIPUR; AND (VI) ONE PERSON REPRESENTING THE MEDICAL INSTITUTIO N CONTROLLED BY THE AJMER DIOCESAN CORPORATION LIMITED. (2) THE COUNCIL SHALL CO-OPT IN THE PRESCRIBED MANN ER TWO PERSONS, POSSESSING THE PRESCRIBED QUALIFICATIONS CONSIDERED TO BE SPECIALLY ITA NO. 1283/2019 RAJASTHAN NURSING COUNCIL VS. CIT(E) 47 SUITED TO ADVISE THE COUNCIL IN RELATION TO THE BUS INESS COMING UP BEFORE IT: PROVIDED THAT, IF THE COUNCIL FAILS SO TO CO-OPT PE RSONS AS ITS MEMBERS WITHIN THREE MONTHS FROM THE DATE OF ITS FIRST MEET ING, STATE GOVERNMENT SHALL NOMINATE SUCH PERSONS AS MEMBERS O F THE COUNCIL. 9. REGISTRAR AND STAFF. - (1) THE COUNCIL SHALL APP OINT A REGISTRAR AND MAY APPOINT OTHER OFFICERS AND SERVANTS AS IT MAY C ONSIDER NECESSARY ON SUCH SALARY AND OTHER CONDITIONS OF SERVICE AS I T MAY DETERMINE AND EVERY PERSON SO APPOINTED SHALL BE DEEMED TO BE A P UBLIC SERVANT WITHIN THE MEANING OF SECTION 21 OF THE INDIAN PENA L CODE, 1860 (CENTRAL ACT 45 OF 1860). (2) THE REGISTRAR SHALL ACT AS SECRETARY TO THE COU NCIL AND SHALL PERFORM SUCH OTHER DUTIES AS ARE ASSIGNED TO HIM BY THIS -A CT OR THE RULES OR REGULATIONS MADE THEREUNDER OR AS MAY BE SPECIALLY ASSIGNED TO HIM BY AN ORDER OF THE COUNCIL. 12. ORDERS FOR MAINTENANCE OF REGISTERS. - (1) THE COUNCIL SHALL, AS SOON AS CONVENIENTLY MAY BE, AFTER THE COMMENCEMENT OF T HIS ACT AND FROM TIME TO TIME AS OCCASION MAY REQUIRE, MAKE ORDERS F OR REGULATING THE MAINTENANCE OF- (A) A REGISTER OF REGISTERED NURSES, (B) A REGISTER OF MIDWIVES, (C) A REGISTER OF REGISTERED HEALTH VISITORS, AND (D) A REGISTER OF AUXILIARY NURSE-MIDWIVES, ARRANGED IN SEVERAL PARTS IN WHICH THE PERSONS TO B E REGISTERED SHALL BE CLASSIFIED IN KEEPING WITH THEIR QUALIFICATIONS. ITA NO. 1283/2019 RAJASTHAN NURSING COUNCIL VS. CIT(E) 48 (2) EACH OF THE SAID REGISTERS SHALL BE KEPT IN THE FORM PRESCRIBED BY THE COUNCIL. 13. PERSONS ENTITLED TO BE REGISTERED- THE FOLLOWIN G PERSONS SHALL BE ENTITLED TO BE REGISTERED UNDER THIS ACT, NAMELY:- (I) NURSES, MIDWIVES, HEALTH VISITORS AND AUXILIARY NURSE-MIDWIVES WHO HAVE UNDERGONE THE COURSE OF TRAINING PRESCRIBE D BY THE COUNCIL AND HAVE PASSED THE PRESCRIBED EXAMINATIONS HELD BY THE COUNCIL AND FULFIL SUCH FURTHER CONDITIONS AS MAY BE PRESCRIBED . (II) NURSES, MIDWIVES, HEALTH VISITORS AND AUXILIAR Y NURSE-MIDWIVES HOLDING CORRESPONDING CERTIFICATES ISSUED BY AUTHOR ITIES IN OTHER STATES IN INDIA AND FOREIGN COUNCIL IF SUCH CERTIFICATES A RE RECOGNISED BY THE INDIAN NURSING COUNCIL; (III) NURSES, MIDWIVES, HEALTH VISITORS AND AUXILIA RY NURSE-MIDWIVES 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 F OR REGISTRATION BY ANY OF THE PERSONS MENTIONED IN SECTION 13 SHALL BE MAD E TO THE REGISTRAR IN THE PRESCRIBED FORM AND SHALL BE ACCOMPANIED WIT H THE PRESCRIBED FEES. 15. DISPOSAL OF APPLICATIONS BY REGISTRAR- IF THE R EGISTRAR IS SATISFIED, AFTER HOLDING IN THE PRESCRIBED MANNER SUCH INQUIRY AS HE CONSIDERS NECESSARY, THAT THE APPLICANT FOR REGISTRATION IS E NTITLED TO BE REGISTERED UNDER SECTION 13, HE SHALL ENTER HIS NAME IN THE AP PROPRIATE REGISTER. PROVIDED THAT ANY APPLICATION FOR REGISTRATION MADE BY A PERSON WHOSE CASE IS NOT CLEARLY GOVERNED BY THE PROVISIONS OF T HIS ACT OR OF THE RULES, REGULATIONS OR ORDERS MADE THEREUNDER MAY BE REFERR ED FOR THE DECISION OF THE COUNCIL. ITA NO. 1283/2019 RAJASTHAN NURSING COUNCIL VS. CIT(E) 49 (2) IF THE REGISTRAR IS NOT SATISFIED AS AFORESAID, HE SHALL MAKE AN ORDER REJECTING THE APPLICATION FOR REGISTRATION AN D REFUND THE FEE PAID WITH IT. 19. PROHIBITION OF REGISTRATION ETC. - (1) THE COUN CIL MAY PROHIBIT THE REGISTRATION OF ANY PERSON AS A NURSE, MIDWIFE, HEA LTH VISITOR OR AUXILIARY NURSE-MIDWIFE AND, IF SUCH PERSON IS ALREADY SO REG ISTERED, MAY DIRECT THE REMOVAL OF HIS NAME FROM THE REGISTER ON ANY OF THE FOLLOWING GROUNDS, NAMELY:- (A) THAT HE HAS BEEN CONVICTED OF ANY SUCH OFFENCE AS IMPLIES IN THE OPINION OF THE COUNCIL ANY DEFECT OF CHARACTER SUCH AS WOULD RENDER HIM UNFIT FOR DUTY; OR (B) THAT HE HAS BEEN FOUND BY THE COUNCIL TO BE GUI LTY OF AN OFFENCE WHICH, IN ITS OPINION, INDICATES PROFESSIONAL INCOM PETENCE, NEGLIGENCE OR CONTRAVENTION OF REGULATIONS, ORDINARILY INCLUDED I N THE PERFORMANCE OF HIS DUTY; OR (C) THAT HE HAS BEEN FOUND BY THE COUNCIL TO BE GUI LTY OF PROFESSIONAL MISCONDUCT OR INFAMOUS CONDUCT IN ANY PROFESSIONAL RESPECT; OR (D) THAT THERE ARE DEFECTS IN HIS CHARACTER WHICH, IN THE OPINION OF THE COUNCIL, WOULD RENDER THE ENTRY OR RETENTION OF HIS NAME ON THE REGISTER UNDESIRABLE: PROVIDED THAT NO ACTION SHALL BE TAKEN BY THE COUNC IL UNDER THIS SECTION UNTIL AFTER DUE INQUIRY, AT WHICH THE PERSON CONCER NED HAS BEEN GIVEN A REASONABLE OPPORTUNITY TO BE HEARD IN HIS DEFENCE, THE PERSON CONCERNED IS FOUND TO BE DISQUALIFIED AS SPECIFIED IN CLAUSE (A) OR CLAUSE (B) OR CLAUSE (C) OR CLAUSE (D). (2) ANY NAME REMOVED FROM THE REGISTER UNDER SUB-SE CTION (1) MAY AFTERWARDS BE RE-ENTERED IN THE REGISTER AND ANY OR DER OF PROHIBITION OF ITA NO. 1283/2019 RAJASTHAN NURSING COUNCIL VS. CIT(E) 50 REGISTRATION PASSED UNDER SUB-SECTION (1) MAY BE WI THDRAWN UNDER THE DIRECTION OF THE COUNCIL GIVEN BY A MAJORITY OF TWO THIRDS OF THE MEMBERS PRESENT AND VOTING AT THE MEETING. 23. PREPARATION, PUBLICATION AND USE OF ANNUAL LIST S OF NURSES, HEALTH VISITORS AND AUXILIARY NURSE-MIDWIVES. - (1) THE RE GISTRAR SHALL, IN EVERY YEAR, ON OR BEFORE A DATE TO BE FIXED IN THIS BEHAL F BY THE COUNCIL, CAUSE TO BE PREPARED, PRINTED AND PUBLISHED IN THE PRESCR IBED MANNER LISTS IN THE PRESCRIBED FORM AND SPECIFYING THE PRESCRIBED P ARTICULAR, SEPARATELY OF:- (A) ALL REGISTERED NURSES, (B) ALL REGISTERED MIDWIVES, (C) ALL REGISTERED HEALTH VISITORS, AND (D) ALL REGISTERED AUXILIARY NURSE-MIDWIVES. (2) IN EVERY PROCEEDING IT SHALL BE PRESUMED THAT A NY PERSON WHOSE NAME IS ENTERED IN THE LATEST OF THE LISTS PUBLISHE D UNDER SUB-SECTION (1) IS A REGISTERED NURSE OR A REGISTERED MIDWIFE, OR A REGISTERED HEALTH VISITOR OR A REGISTERED AUXILIARY NURSE- MIDWIFE, A S THE CASE MAY BE: PROVIDED THAT, IN THE CASE OF A PERSON WHOSE NAME M AY HAVE BEEN ENTERED IN A REGISTER AFTER THE PUBLICATION OF A LI ST UNDER SUB- SECTION (1) AND BEFORE THE PUBLICATION OF A FRESH LIST THEREUND ER, A CERTIFIED COPY OF SUCH ENTRY, SIGNED BY THE REGISTRAR, SHALL BE EVIDE NCE 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 POW ERS, NAMELY:- ITA NO. 1283/2019 RAJASTHAN NURSING COUNCIL VS. CIT(E) 51 (1) TO LAY DOWN THE COURSES OF TRAINING AND TO PROV IDE SUCH TRAINING TO NURSES, MIDWIVES, HEALTH VISITORS AND AUXILIARY NUR SE-MIDWIVES SO AS TO QUALIFY THEM FOR REGISTRATION UNDER THIS ACT: (2) TO PRESCRIBE THE QUALIFYING EXAMINATIONS FOR SU CH REGISTRATION: (3) TO HOLD ALL OR ANY OF SUCH EXAMINATIONS; (4) TO SPECIFY THE VARIOUS TITLES, DEGREES, DIPLOMA S OR CERTIFICATES WHICH SHALL QUALIFY THE HOLDERS THEREOF FOR REGISTRATION UNDER THIS ACT; (5) TO RECOGNISE EDUCATIONAL OR INSTRUCTIONAL INSTI TUTIONS, SCHOOLS, COLLEGES FOR THE PURPOSE OF TRAINING IN BASIC AS WE LL AS POST CERTIFICATE/POST GRADUATE NURSING, MIDWIFERY, HEALT H VISITORS AND AUXILIARY NURSING-MIDWIFERY COURSES AND TO APPOINT EXAMINING BODIES, FOR THE PURPOSE OF HOLDING EXAMINATIONS FOR REGISTRATION UN DER THIS ACT; (6) TO LAY DOWN THE CONDITIONS ON WHICH SUCH RECOGN ITION MAY BE MADE; (7) TO PROHIBIT THE ISSUE TO ANY PERSON BY ANY HOSP ITAL, SCHOOL OR OTHER SIMILAR INSTITUTION WHICH HAS NOT BEEN APPROVED OR RECOGNISED UNDER CLAUSE (5), OF ANY CERTIFICATE OR DOCUMENT TO SHOW THAT SUCH PERSON IS QUALIFIED TO PRACTISE AS A NURSE, MIDWIFE, AUXILIAR Y NURSE MIDWIFE OR HEALTH VISITOR UNLESS SUCH PERSON HAS BEEN REGISTER ED UNDER THIS ACT; AND (8) TO ADOPT SUCH MEASURES AND TO DO SUCH ACTS AS M AY BE NECESSARY FOR THE FURTHERANCE OF THE OBJECT OF THIS ACT. 26. RECOGNISED INSTITUTIONS ETC. - INSTITUTIONS, SC HOOLS, HOSPITALS, EXAMINING BODIES AND ASSOCIATIONS RECOGNISED BY THE COUNCIL UNDER CLAUSE (5) OF SECTION 24 AND THE REGULATIONS MADE T HEREUNDER SHALL BE COMPETENT TO TRAIN NURSES, MIDWIVES, HEALTH VISITOR S AND AUXILIARY NURSE- MIDWIVES, TO SEND THEM FOR OR TO HOLD THE QUALIFYIN G EXAMINATIONS FOR ITA NO. 1283/2019 RAJASTHAN NURSING COUNCIL VS. CIT(E) 52 WHICH THEY MAY HAVE BEEN RECOGNISED AND TO ISSUE SU CH CERTIFICATES AS MAY BE SPECIFIED IN THE ORDER OF THEIR RECOGNITION. 27. WITHDRAWAL OF RECOGNITION. - THE COUNCIL SHALL HAVE POWERS FOR REASONS TO BE RECORDED IN WRITING TO WITHDRAW RECOG NITION FROM ANY INSTITUTION REFERRED TO IN SECTION 26. 29. POWER OF COUNCIL TO CALL FOR INFORMATION FROM I NSTITUTIONS ETC. - (1) THE COUNCIL SHALL HAVE POWER TO CALL UPON THE GOVER NING BODY OR AUTHORITY OF ANY RECOGNISED INSTITUTION REFERRED TO IN CLAUSE (5) OF SECTION 24- (A) TO FURNISH REPORTS, RETURNS OR OTHER INFORMATIO N AS THE COUNCIL MAY REQUIRE TO ENABLE IT TO JUDGE OF THE EFFICIENCY OF THE INSTITUTION OR TRAINING GIVEN THEREIN; AND (B) TO PROVIDE FACILITIES TO ENABLE ANY MEMBER OF T HE COUNCIL (DEPUTED BY THE COUNCIL IN THIS BEHALF) TO BE PRESENT AT THE EXAMINATIONS TO BE HELD BY ANY SUCH INSTITUTION. (2) THE COUNCIL SHALL HAVE POWER TO INSPECT ANY SUC H INSTITUTION AND MAY FOR THE PURPOSE [APPOINT SUCH NUMBER OF INSPECT ORS WHETHER FROM AMONG MEMBERS OF THE COUNCIL OR OTHERWISE AS IT DEE MS NECESSARY.] 30. SCALE OF FEES. - (1) THE COUNCIL SHALL, WITH TH E SANCTION OF THE STATE GOVERNMENT, FIX THE SCALE OF FEES PAYABLE IN RESPEC T OF ALL MATTERS AND PROCEEDINGS PROVIDED FOR IN THIS ACT OR THE RULES A ND REGULATIONS MADE THEREUNDER AND PROVIDE THE MODE OF THEIR PAYMENT. (2) SUCH FEES SHALL BE APPLIED FOR THE PURPOSE OF T HIS ACT AND THE RULES AND REGULATIONS MADE THEREUNDER. 48. ON PERUSAL OF AFORESAID PROVISIONS, WE FIND THA T SECTION 12 TALKS ABOUT MAINTENANCE OF REGISTERS OF REGISTERED NURSES, MIDW IVES, HEALTH VISITORS AND ITA NO. 1283/2019 RAJASTHAN NURSING COUNCIL VS. CIT(E) 53 AUXILIARY NURSE MIDWIVES. SECTION 13 TALKS ABOUT T HE PERSONS WHO ARE ENTITLED TO BE REGISTERED. IT TALKS ABOUT THE PERSONS WHO H AVE UNDERGONE THE COURSE OF TRAINING PRESCRIBED BY THE COUNCIL AND HAVE PASS ED THE PRESCRIBED EXAMINATION HELD BY THE COUNCIL WHO SHALL BE ELIGIB LE FOR REGISTRATION. IT FURTHER TALKS ABOUT PERSONS HOLDING CORRESPONDING C ERTIFICATES BY AUTHORITIES IN OTHER STATES IN INDIA AND EVEN FOREIGN COUNCIL IF S UCH CERTIFICATES ARE RECOGNIZED BY THE INDIAN NURSING COUNCIL. SECTION 14 TALKS ABOUT THE PERSONS SEEKING REGISTRATION TO APPLY TO THE REGISTRAR IN P RESCRIBED FORM ALONG WITH PRESCRIBED FEES AND SECTION 15 TALKS ABOUT THE REGI STRATION OF THESE PERSONS AND THE POWERS OF THE REGISTRAR TO MAKE ENQUIRES BE FORE HE ENTERS THE NAME IN THE REGISTERS SO MAINTAINED. SECTION 19 TALKS AB OUT THE SITUATIONS WHERE THE REGISTRATION MAY BE DENIED OR WHERE A PERSON IS ALR EADY REGISTERED, TO ORDER FOR HIS NAME TO BE REMOVED ON ACCOUNT OF PROFESSION AL MISCONDUCT, NEGLIGENCE ETC. SECTION 23 TALKS ABOUT PUBLICATION OF LIST OF SUCH PERSONS AND A PRESUMPTION THAT PERSON SO LISTED IS A REGISTERED PERSON WITH THE COUNCIL AND ELIGIBLE TO CARRY OUT THEIR DESIGNATED PROFESSI ONAL ACTIVITY AS SO REGISTERED. WE THEREFORE FIND THAT THESE ARE PRIMARY AND OBLIGA TORY FUNCTIONS OF THE COUNCIL TO ADMIT PERSONS AS REGISTERED NURSES, MIDW IVES, HEALTH VISITORS AND AUXILIARY NURSE MIDWIVES ON ITS ROLLS WHO HAVE THE REQUISITE TRAINING AND HAVE PASSED THE QUALIFYING EXAMINATION AND HOLD THE NECE SSARY DEGREES/CERTIFICATES. THESE ARE CLEARLY REGULATORY IN CHARACTER INTENDED TO ENSURE THAT THE PERSON WITH REQUISITE SKILL AND QUA LIFICATIONS AND THUS ELIGIBLE TO PRACTICE AS NURSES, MIDWIVES, HEALTH VISITORS AN D AUXILIARY NURSE MIDWIVES IN THEIR RESPECTIVE DOMAINS ARE AVAILABLE FOR BEING EN GAGED BY THE HOSPITALS, NURSING HOMES AND PUBLIC AT LARGE. 49. FURTHER, WE LOOK AT THE PROVISIONS OF SECTION 2 4 WHICH TALKS ABOUT THE POWERS OF THE COUNCIL. IT TALKS ABOUT THE POWER OF THE COUNCIL TO LAY DOWN THE COURSES OF TRAINING AND TO PROVIDE SUCH TRAININ G TO NURSES, MIDWIVES, HEALTH VISITORS AND AUXILIARY NURSE-MIDWIVES SO AS TO QUALIFY THEM FOR ITA NO. 1283/2019 RAJASTHAN NURSING COUNCIL VS. CIT(E) 54 REGISTRATION UNDER THIS ACT. IT TALKS ABOUT THE PO WER OF THE COUNCIL TO PRESCRIBE THE QUALIFYING EXAMINATIONS FOR SUCH REGI STRATION AND TO HOLD ALL OR ANY OF SUCH EXAMINATIONS AND TO SPECIFY THE VARIOUS TITLES, DEGREES, DIPLOMAS OR CERTIFICATES WHICH SHALL QUALIFY THE HOLDERS THE REOF FOR REGISTRATION UNDER THIS ACT. IT TALKS ABOUT THE POWER OF THE COUNCIL TO RE COGNIZE EDUCATIONAL OR INSTRUCTIONAL INSTITUTIONS, SCHOOLS, COLLEGES FOR T HE PURPOSE OF TRAINING IN BASIC AS WELL AS POST CERTIFICATE/POST GRADUATE NURSING, MIDWIFERY, HEALTH VISITORS AND AUXILIARY NURSING-MIDWIFERY COURSES AND TO LAY DOWN THE CONDITIONS ON WHICH SUCH RECOGNITION MAY BE MADE AND SUBSEQUENTLY WITHDRAWN. WE THEREFORE FIND THAT THESE ARE AGAIN PRIMARY AND OBL IGATORY FUNCTIONS OF THE COUNCIL RIGHT FROM DECIDING THE COURSE CURRICULUM A ND THE STANDARDS OF VARIOUS TRAINING COURSES, TO RECOGNITION OF EDUCATIONAL AND OTHER INSTITUTIONS WHERE SUCH TRAINING COURSES CAN BE CONDUCTED, TO CONDUCT OF QUALIFYING EXAMINATION AND FINALLY TO AWARD OF DEGREES/DIPLOMAS AND CERTIF ICATES TO QUALIFIED PERSONS. 50. IN OVERALL ANALYSIS, WE FIND THAT RAJASTHAN NUR SING COUNCIL IS A STATUTORY AUTHORITY ESTABLISHED UNDER THE RAJASTHAN NURSING COUNCIL ACT, 1964 CONSISTING OF EX-OFFICIO MEMBERS WHO ARE OFFICIALS OF THE HEA LTH DEPARTMENT, NAMELY, DIRECTOR OF MEDICAL SERVICES, MEDICAL SUPER INTENDENT, NURSING SUPERINTENDENT AND OTHER HEALTH OFFICIALS AND COMES UNDER THE ADMINISTRATIVE CONTROL OF MEDICAL AND HEALTH DEPARTMENT, GOVERNMEN T OF RAJASTHAN AND ITS PRIMARY AND THE DOMINANT PURPOSE AS REFLECTED BY CONJOINT READ ING OF VARIOUS OBLIGATORY FUNCTIONS IS TO REGULATE THE MEDICAL PRO FESSION OF REGISTERED NURSES, MIDWIVES, HEALTH VISITORS AND AUXILIARY NURSE MIDWI VES IN THE STATE OF RAJASTHAN AND TO ENSURE THAT THESE PERSONS HAVE UND ERGONE 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 RESP ECTIVE DOMAINS AND SERVICES OF SUCH PERSONS ARE THUS AVAILABLE TO THE HOSPITALS , NURSING HOMES AND PUBLIC ITA NO. 1283/2019 RAJASTHAN NURSING COUNCIL VS. CIT(E) 55 AT LARGE AND QUALIFY AS INVOLVED IN ACTIVITIES OF G ENERAL 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), I T IS A SETTLED POSITION THAT THE PROVISO APPLIES ONLY IF AN INSTITUTION IS ENGAG ED IN ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY AND POSTULAT ES THAT SUCH AN INSTITUTION IS NOT 'CHARITABLE' IF IT IS INVOLVED IN CARRYING ON A NY ACTIVITY IN THE NATURE OF TRADE, COMMERCE OR BUSINESS OR ANY ACTIVITY OF REND ERING ANY SERVICE IN RELATION TO ANY TRADE, COMMERCE OR BUSINESS FOR A C ESS, FEE OR ANY OTHER CONSIDERATION. IN OTHER WORDS, AN INSTITUTION WILL NOT BE REGARDED AS ESTABLISHED FOR CHARITABLE PURPOSE IF CESS, FEE OR OTHER CONSIDERATION IS RECEIVED FOR CARRYING ON ANY ACTIVITY IN NATURE OF TRADE, COMMERCE OR BUSINESS OR ANY ACTIVITY OF RENDERING ANY SERVICE IN RELATIO N TO ANY TRADE, COMMERCE OR BUSINESS. 52. AN EXCEPTION HAS HOWEVER BEEN CARVED OUT WHERE IN IT HAS BEEN PROVIDED THAT THE INSTITUTION WILL STILL QUALIFY AS AN INSTITUTION ESTABLISHED FOR CHARITABLE PURPOSES WHERE ANY SUCH ACTIVITY IS UN DERTAKEN IN THE COURSE OF ACTUAL CARRYING OUT OF SUCH ADVANCEMENT OF ANY OTHE R OBJECT OF GENERAL PUBLIC UTILITY AND THE AGGREGATE RECEIPTS FROM SUCH ACTIV ITY OR ACTIVITIES DURING THE PREVIOUS YEAR, DO NOT EXCEED TWENTY PER CENT OF TH E TOTAL RECEIPTS, OF THE TRUST OR INSTITUTION UNDERTAKING SUCH ACTIVITY OR A CTIVITIES, OF THAT PREVIOUS YEAR. THE PHRASE SUCH ACTIVITY OR ACTIVITIES CARRIED OUT DURING THE PREVIOUS YEAR REFERS TO ACTIVITY IN NATURE OF TRADE, COMMERCE OR BUSINESS OR ANY ACTIVITY OF RENDERING ANY SERVICE IN RELATION TO ANY TRADE, COM MERCE OR BUSINESS AND SUCH ACTIVITIES ARE UNDERTAKEN IN THE COURSE OF MAIN ACT IVITIES OF GENERAL PUBLIC UTILITY. IN OTHER WORDS, SUCH ACTIVITIES ARE INCID ENTAL, SUBSERVIENT TO PRIMARY OR DOMINANT ACTIVITY OF GENERAL PUBLIC UTILITY AND THE MEASURE TO VERIFY THE SAME IS THE AGGREGATE OF RECEIPTS FROM SUCH ACTIVITIES W HICH CANNOT EXCEED 20% OF TOTAL RECEIPTS OF THE INSTITUTION. THEREFORE, WHER E AN INSTITUTION IS CARRYING OUT PRIMARY OR DOMINANT ACTIVITIES IN THE FIELD OF GENE RAL PUBLIC UTILITY AND IN THE ITA NO. 1283/2019 RAJASTHAN NURSING COUNCIL VS. CIT(E) 56 PROCESS OF CARRYING OUT THE SAME, IT ALSO CARRIES O UT OTHER INCIDENTAL BUSINESS ACTIVITIES AND THE RECEIPT FROM SUCH BUSINESS DOESN T EXCEED 20% OF TOTAL RECEIPTS OF THE INSTITUTION DURING THE PREVIOUS YEA R, THE INSTITUTION WILL STILL QUALIFY AS AN INSTITUTION ESTABLISHED FOR CHARITABL E PURPOSES. 53. IN THE INSTANT CASE, THE LD CIT(E) HAS STATED IN HIS ORDER THAT THE ACTIVITIES CARRIED OUT BY THE APPLICANT COUNCIL HAV E BEEN REFLECTED IN ITS INCOME & EXPENDITURE ACCOUNTS OF VARIOUS YEARS. THE APPLICANT COUNCIL IS IN RECEIPT OF DIRECT INCOME COMPRISING MAINLY REGISTRA TION FEES, COUNSELLING FEES, EXAMINATION FEES, INSPECTION FEES, REVALUATIO N 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 DURI NG 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 ACCOUNT S 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 ST ATE 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 1 ST PROVISO TO SECTION 2(15). HENCE, THE APPLICANT FAILS CONDITION (B) OF THE PRO VISO. FURTHER, SUCH COMMERCIAL ACTIVITIES ARE NOT INCIDENTAL BUT ARE PR E-DOMINANT ACTIVITY OF THE APPLICANT. HENCE, THE ASSESSEE ALSO FAILS CONDITION (A) OF THE PROVISO. THEREFORE, AS PER THE PROVISO, SUCH ACTIVITY IN THE NATURE OF ADVANCEMENT OF AN OBJECT OF GPU SHALL NOT QUALIFY AS CHARITABLE AC TIVITY. 54. WE ARE HOWEVER UNABLE TO APPRECIATE THE AFORES AID FINDINGS OF THE LD CIT(E) AND FIND INHERENT CONTRADICTION THEREIN. AT FIRST PLACE, IT HAS BEEN STATED THAT THE ACTIVITIES CARRIED OUT BY THE APPLI CANT COUNCIL HAVE BEEN ITA NO. 1283/2019 RAJASTHAN NURSING COUNCIL VS. CIT(E) 57 REFLECTED IN ITS INCOME & EXPENDITURE ACCOUNTS OF V ARIOUS YEARS. IN THE INCOME & EXPENDITURE ACCOUNTS FOR FINANCIAL YEARS 2 015-16, 2016-17, 2017- 18, WE FIND THAT THE APPLICANT COUNCIL HAS SHOWN RE CEIPT OF DIRECT INCOME COMPRISING OF REGISTRATION FEES, COUNSELLING FEES, EXAMINATION FEES, INSPECTION FEES, REVALUATION FEES ETC AND THERE ARE CORRESPONDING EXPENDITURE OF COUNCELLING CHARGES, EXAMINATION CHA RGES, INSPECTION CHARGES, ETC. IT HAS BEEN ADMITTED BY THE REVENUE THAT SUCH INCOME RECEIPTS AND EXPENDITURE DESCRIBES ITS ACTIVITIES W HICH ARE IN THE NATURE OF GENERAL PUBLIC UTILITY (GPU). AT THE SAME TIME, IT HAS BEEN STATED (AND THAT WHERE THE CONTRADICTION HAS HAPPENED) THAT SAME INC OME RECEIPTS (100%) ARE OF NATURE OF BUSINESS/COMMERCIAL RECEIPTS AND T HUS, IN CONTRAVENTION OF 20% LIMIT AS PROVIDED IN THE PROVISO TO SECTION 2(1 5) AND ALSO ARE NOT INCIDENTAL BUT PRE-DOMINANT ACTIVITIES OF THE INSTI TUTION. HOW CAN THE SAME ACTIVITY QUALIFY AND FALLS IN BOTH THE CATEGORIES I .E, AN ACTIVITY IN THE NATURE OF GENERAL PUBLIC UTILITY AND AT THE SAME TIME, QUALIF Y AS BUSINESS ACTIVITY. MERELY BECAUSE THE ASSESSEE COUNCIL HAS CHARGED CER TAIN FEES AS PART OF RENDERING ITS STATUTORY FUNCTION AND TO MEET ITS AD MINISTRATIVE/OPERATIVE EXPENSES, THE SAME CANNOT BE SAID TO BE DONE FOR TH E PURPOSE OF PROFIT. IN ITS LETTER DATED 10.04.2019, GOVERNMENT OF RAJASTHAN, M INISTRY OF MEDICAL AND HEALTH DEPARTMENT HAS CONFIRMED THAT THE STATE GOVE RNMENT HAS ONLY CREATED AND SUBSCRIBED THE COUNCIL AND FIX THE VARIOUS FEES /CHARGES TO COVER THE NORMAL EXPENDITURE ON OPERATIONS AND DEVELOPMENT OF THE AMENITIES/INFRASTRUCTURE TO SERVE THE SOCIETY IN BE TTER MANNER, ALL THE REVENUE COLLECTED BY THE COUNCIL ARE ON AUTHORIZATION OF TH E STATE GOVERNMENT AND IS TO BE RETAINED BY THE COUNCIL FOR MEETING THE OPERA TIONS AND FUTURE DEVELOPMENT EXPENSES. IT IS NOT EVEN THE CASE OF TH E REVENUE THAT SUCH ACTIVITIES ARE CARRIED OUT FOR THE PURPOSES OF PROF IT AND THE FEES SO CHARGED ARE EXORBITANT AND NOT COMMENSURATE WITH THE ACTIVITIES SO UNDERTAKEN BY THE ASSESSEE COUNCIL. THE TEST OF CARRYING OUT THE ACT IVITIES IN THE NATURE OF TRADE, ITA NO. 1283/2019 RAJASTHAN NURSING COUNCIL VS. CIT(E) 58 COMMERCE OR BUSINESS IS NOT SATISFIED IN THE INSTAN T CASE. AS WE HAVE HELD ABOVE, THE PRIMARY OR DOMINANT PURPOSE OF THE ASSES SEE COUNCIL IS TO REGULATE THE MEDICAL PROFESSION OF REGISTERED NURSES, MIDWIV ES, 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/CERTIFIC ATES AND THUS ELIGIBLE TO PRACTICE AS NURSES, MIDWIVES, HEALTH VISITORS AND A UXILIARY NURSE MIDWIVES IN THEIR RESPECTIVE DOMAINS AND SERVICES OF SUCH PERSO NS ARE THUS AVAILABLE TO THE HOSPITALS, NURSING HOMES AND PUBLIC AT LARGE. WHERE AS PART OF RENDERING OF SUCH ACTIVITIES, IT RECOVERS CERTAIN NOMINAL FEE S TO MEET ITS OPERATIONAL AND ADMINISTRATIVE EXPENSES, THE SAME WILL NOT DISQUALI FY 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 CHARITABL E ORGANIZATION COVERED BY THE LAST LIMB, WHEN CERTAIN REASONABLE/NOMINAL FEE IS COLLECTED FROM THE BENEFICIARIES IN THE COURSE OF ACTIVITY WHICH IS NO T A BUSINESS BUT CLEARLY CHARITY FOR WHICH THEY ARE ESTABLISHED AND THEY UND ERTAKE. WE ARE THEREFORE OF THE CONSIDERED VIEW THAT ONCE IT IS HELD THAT TH E WHOLE OF THE ACTIVITIES ARE IN NATURE OF GENERAL PUBLIC UTILITY AND THERE ARE N O SEPARATE BUSINESS ACTIVITIES AND NO SEPARATE REVENUE STREAMS FROM SUCH BUSINESS ACTIVITIES, THE PROVISO TO SECTION 2(15) DOESNT APPLY IN THE INSTANT CASE AND HAS BEEN WRONGLY INVOKED BY THE LD CIT(E). 55. IN LIGHT OF ABOVE DISCUSSIONS AND IN THE ENTIR ETY OF FACTS AND CIRCUMSTANCES OF THE CASE AND RESPECTFULLY FOLLOWIN G THE DECISIONS REFERRED SUPRA, WE ARE OF THE CONSIDERED VIEW THAT THE OBJEC TIVES OF THE ASSESSEE COUNCIL FALLS IN THE CATEGORY OF GENERAL PUBLIC UTI LITY AND THUS QUALIFY AS CHARITABLE PURPOSE AND GIVEN THAT THERE IS NO DISPU TE ON THE GENUINENESS OF ACTIVITIES BEING CARRIED OUT BY THE ASSESSEE COUNCI L IN FURTHERANCE OF SUCH ITA NO. 1283/2019 RAJASTHAN NURSING COUNCIL VS. CIT(E) 59 OBJECTIVES, THE ORDER PASSED BY THE LD CIT(E) IS HE REBY SET-ASIDE AND HE IS DIRECTED TO GRANT REGISTRATION TO THE ASSESSEE COUN CIL U/S 12AA AS SO APPLIED. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON01/09/2020. SD/- SD/- FOT; IKY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 01/09/2020. * SANTOSH. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- RAJASTHAN NURSING COUNCIL, JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- CIT (E), JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 1283/JP/2019} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR .