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Issues involved: Appeal u/s 260A of the Income Tax Act, 1961 challenging denial of exemption u/s 80G to trust for construction of convention centre and leasing to trustee.
Summary: Issue 1: Denial of exemption u/s 80G The appellant, a trust, sought exemption u/s 80G for constructing a convention centre and leasing it to a trustee. The Assessing Officer denied the exemption, stating the activities were commercial, not charitable. The Tribunal upheld this decision, noting lack of evidence regarding the lease arrangement and substantial investment without security. The High Court affirmed the concurrent findings, stating the trust's activities were commercial, not wholly charitable, justifying denial of exemption. Issue 2: Character of the trust The appellant argued that the convention centre was constructed for charitable purposes and leased at a nominal fee. However, the court found that the trust had indeed constructed the convention centre and leased it to a trustee, confirming the commercial nature of the activities. The court held that the question of the trust's character is a legal matter, while the charitable purpose is a factual one. As the trust's activities were deemed commercial, the denial of exemption was justified, and no substantial question of law arose for consideration. The appeal was dismissed.
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