Rajasthan Para-Medical Council Vs CIT (ITAT Jaipur)
ITAT Jaipur held that as the activities carried out by the appellant (Rajasthan Para-Medical Council) are not in the nature of trade, commerce or business, hence registration under section 12AA should be granted.
Facts- The assessee Rajasthan Para-Medical Council is established by an Act of State Legislature with the aim to develop, promote and regulate education in para-medical courses and mainly carrying out the functions as prescribed u/s. 13 of the RPMC Act, 2008.
The applicant filed application online on 04.06.2020 in Form No. 10A for seeking registration u/s. 12AA of the Income Tax Act, 1961. The ld. CIT (E) rejected the application for registration u/s. 12A of the IT Act, 1961 stating that it is not covered as Education because it is a regulatory body for Para-medical education and does not provide direct schooling. As per the order, it was mentioned that the appellant Council is covered under General Public utility but since, the major receipts are from exam fee, revaluation fee, students registration fee, affiliation etc., hence are treated as business receipts. Aggrieved by the order of the ld. CIT (E), the assessee has filed the present appeal.
Conclusion- There can be a revenue surplus in particular year/s which is allowed to be applied in the next year(s) as permitted under the Act. The un-applied amount becomes the income of the assessee after the end of the time-limit. Since, the proviso to section 2(15) is, otherwise, also not applicable as the activities are not in the nature of trade, commerce or business.
In light of the above discussions and in the entirety of the facts and circumstances of the case and respectfully following the decisions referred supra, we are of the considered view that the object of the appellant Council qualified as charitable purpose and covered under Section 2(15) as applied by the appellant and given that there is no dispute on the genuineness of the activities carried on by the assessee Council in furtherance of its object, the order passed by ld. CIT (E) is hereby set aside and directed to grant the registration to the appellant Council under section 12AA as applied by them.
FULL TEXT OF THE ORDER OF ITAT JAIPUR
This appeal by the assessee is directed against the order dated 16.08.2022 of ld. CIT (Exemptions), Jaipur passed under section 12AA(1)(b) of the IT Act, 1961. The assessee has raised the following grounds :-
1. The learned Commissioner of Income Tax (Exemptions), Jaipur has erred in law as well as in facts in rejecting the application of the Council for seeking registration u/s 12AA of the Income Tax Act, 1961 and holding that the applicant society cannot be held as charitable within the meaning of Sec. 2(15) of the Income-tax Act, 1961.
2. The learned Commissioner of Income Tax (Exemptions), Jaipur has erred in law as well as in facts holding that the Council 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).
3. The learned Commissioner of Income Tax (Exemptions), Jaipur has erred in law as well as in facts in not providing proper opportunity of being heard to the appellant before passing the order.
4. The petitioner craves the right to add, alter, modify or amend in any manner the grounds of appeal on or before the hearing.
2. The brief facts of the case are that the assessee Rajasthan Para-Medical Council is established by an Act of State Legislature with the aim to develop, promote and regulate education in para-medical courses and mainly carrying out the functions as prescribed under section 13 of the RPMC Act, 2008 which includes (i) to promote innovations, research and development in establishment of new Paramedical subjects in the Schedule; (ii) to formulate schemes for promoting Paramedical education; (iii) to lay down norms and standards for courses, curricula, physical and instructional facilities, staff pattern, staff qualifications, quality instructions, assessment; (iv) examination in Para-medical education; (v) to recognize the institutions conducting courses in Para-medical subjects and provide guidelines for admission of student for imparting Para-medical education; (vi) to inspect or cause to be inspected any Para-medical institution; (vii) to constitute a board for conducting the examination in Para-medical subjects so as to maintain uniformity of standards. The applicant filed application online on 04.06.2020 in Form No. 10A for seeking registration under section 12AA of the Income Tax Act, 1961. The applicant was issued a letter/notice No. ITBA / EXM /F /41 /2020 21 /1027702192 (1) dated 12.08.2020 requesting therein to submit certain documents /explanations by 25.08.2020 and to produce original RC/MOA for verification. However, only part details were submitted the applicant. Accordingly, a show cause notice was issued to the applicant society vide No. ITBA /EXM /F/41/2020-21/1029329636(1) dated 29.12.2020 through which certain details were called for and date of hearing was fixed as 11.01.2021. In compliance, the applicant council furnished reply on 06.01.2021 along with the details called for, which has been examined in detail. The reply to the specific query on payment of taxes on surplus in different years has been found inappropriate as per the provisions of the I.T. Act, 1961. The ld. CIT (E) rejected the application for registration under section 12A of the IT Act, 1961 stating that it is not covered as Education because it is a regulatory body for Para-medical education and does not provide direct schooling. As per the order, it was mentioned that the appellant Council is covered under General Public utility but since, the major receipts are from exam fee, revaluation fee, students registration fee, affiliation etc., hence are treated as business receipts. Aggrieved by the order of the ld. CIT (E), the assessee has filed the present appeal before the Tribunal.
3. The grounds no. 1 to 3 raised by the assessee are inter-connected and interrelated, therefore, these grounds are being disposed off together.
4. Before us, the ld. Counsel for the assessee has submitted common submissions for both the grounds as under :-
“1. A Brief About the Appellant :
Rajasthan Para Medical Council (the Appellant) is a 100% owned and controlled by the Government of Rajasthan constituted by an Act of the Legislature in the year 2008 as Rajasthan Para medical Council Act, 2008 with the primary objective to develop, promote and regulate the Para-medical education and profession in the state of Rajasthan. It also aims for the recognition of institutions under its control and supervision in a systematic manner for imparting education or training in Para Medical subjects in the state and for matters connected therewith or incidental thereto.
The aim of the Council is also to promote innovations, research & development in Para-Medical subjects and establishment of new Para-Medical subjects. The Rajasthan Para-Medical Council is formulating schemes for promoting Para-Medical education and promoting an effective link between Para-Medical education and medical education.
2. The major functions of the Appellant are:
i. Proscribing syllabus and curriculum for various para-medical courses
ii. Conducting qualifying examination for the courses
iii. Registration and granting certificate to qualified persons to practice their profession. ( to serve the Public Health under qualified and trained hands and mindsets)
iv. Granting recognition to the training institutions and inspection there on.
The qualifications offered by the Appellant are :
