a) Assessee-trust, established for educational purposes, had let out its auditorium to a management institute on a nominal rent.
b) Assessing Officer (AO) found that the first proviso to section 2(15) was attracted in view of the income earned by the assessee from letting out of the said premises. Accordingly, exemption under section 11 was denied to assessee.
c) The Tribunal, after examining the facts, had come to a conclusion that the main object of the assessee-trust was to promote educational activities. It was in the course of this activity that the premise was let out. Hence, proviso to section 2(15) wouldn’t be attracted in case of assessee.
d) Aggrieved by the order of the Tribunal. The revenue filed the instant appeal before the High Court.
The High Court held in favour of assessee as under-