TMI Blog2009 (4) TMI 973X X X X Extracts X X X X X X X X Extracts X X X X ..... emptions) in order, concluded that refundable rental deposit amounting to ₹ 11,52,000/- paid by the society to one of its executive committee members would fall within the purview of section 13(3) and that such transaction would be covered under section 13(2) and would tantamount to the use or application of the trust income or property for the benefit of the specified persons covered in that section. iv) The learned DIT(Exemptions) blatantly ignored the fact that the said executive committee member has provided the entire school building to the society free of cost, and the refundable rental deposit was held by the said member merely as a security deposit for permitting the society to use her building for the school activities. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... son within the meaning of section 13(3). The entire income of the assessee-trust will not be entitled for exemption u/s 11 as according to the learned DIT(Exemptions), the amount advanced to Mrs. Mumtaz Begum is to be deemed to have been lent without interest. Accordingly, the learned DIT(Exemptions) did not allow renewal of approval u/s 80G in view of section 80G(5)(1) of the I T Act. 5. During the course of proceedings before us, the learned AR submitted that renewal of approval u/s 80G was granted earlier vide orders dated 27th December, 2002 and 19th April, 2006. The amounts were advanced by the society to the lessor i.e. Smt. Mumtaz Begum on two occasions i.e. 19th March, 2003 and 13th March, 2004. A sum of ₹ 1,50,000/- was pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arch, 2003 and ₹ 5 lakhs on 13th March, 2004 as refundable advance. The lessor completed the construction of extra floor for the purpose of running the school and to provide sufficient space to the students. There is absolutely no room to infer that the funds were provided by the Institution to the lessor for her personal benefit or use. There is absolutely no evidence to the department to show that the above funds were misused and were diverted for the purpose other than the construction. The learned AR therefore submitted that the institution is entitled for approval of renewal u/s 80G. 7. The learned DR has filed written submissions containing 8 pages. The learned DR submitted that approval of renewal u/s 80G is allowed in case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ional High Court in 285 ITR 327 is not applicable because that decision applies when registration is to be granted u/s 12A of the I T Act. 9. We have heard both the parties. The amount of ₹ 6.5 lakhs was advanced to the lessor in two instalments i.e. ₹ 1,50,000/- on 19th March, 2003 and ₹ 5 lakhs on 13th March, 2004. These amounts were given as refundable advance. The learned DIT(Exemptions) vide letter dated 19th April, 2006 granted approval of renewal u/s 80G(5) for the period from 1st April, 2005 to 31st March, 2008. Thus, the facts, which have been considered by the present DIT(Exemptions), were there when earlier renewal was granted. 10. The Hon'ble Delhi High Court in the case of Director of Income Tax (Exe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. vide order dated 30th January, 2009 in ITA No.451/Bang/2008 held that onus was on the revenue to have brought on record that there was change in the facts and circumstances for making disallowance of the expenditure. If such a onus is not discharged, then rule of consistency is to be followed. There has been no change in the facts and circumstances of the case after the earlier approval was granted vide letter dated 19th April, 2006 and therefore, as per the rule of consistency, the learned DIT(Exemptions) should have allowed the approval for renewal u/s 80G. 13. The learned DIT(Exemptions) has held that the income of the society is not exempt u/s 11 because the income or property of the trust is deemed to have been used or applied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not repayable at the instance of the lender. As per the lease agreement, the refundable advance is payable when the premises is vacated. Hence, in our view, the amount given as refundable advance is not covered u/s 13(2)(a). Moreover, there is adequate consideration for such advance. The refundable advance has been utilized for the construction of the additional floor space and that additional floor space has been utilised by the society without paying any rent. Hence, there has been no benefit to Smt. Mumtaz Begum. Exemption u/s 11 is to be given if there is benefit to the person specified in section 13(3) of the I T Act. In the instant case, there is no benefit to such person. Hence, the learned DIT(Exemptions) was not justified in not re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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