Charitable trust exemption and incidental business income: no referable question of law arose after the Tribunal's factual finding.

The High Court held that no referable question of law arose where the Tribunal had found as a fact that the assessee did not carry on business for profit. On that factual basis, the amendment in section 11(4A) did not alter the Tribunal's view that exemption under section 11 remained available, because the business-incidental restriction was not triggered on the record. Since the Revenue did not challenge that factual finding by raising a specific question, the refusal to state a case and refer the proposed questions, including the taxability of forfeited earnest money, was justified and the petition was rejected.

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Issues: Whether the Tribunal was justified in refusing to state a case and refer the proposed questions concerning exemption under section 11 of the Income-tax Act, 1961, in the light of section 11(4A), and the taxability of the forfeited earnest money.

Analysis: The Tribunal had recorded a finding of fact that the assessee did not carry on any business for profit. On that basis, the amendment in section 11(4A), which excludes business income unless the business is incidental to the attainment of the trust's objects, did not materially affect the Tribunal's view that the assessee was entitled to exemption under section 11. Since the Revenue did not challenge the factual finding by raising a specific question, no referable question of law arose.

Conclusion: The refusal to make a reference was justified, and the petition seeking a direction under section 256(2) was rejected.

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