A man donated a plot of a land for the purpose of erecting a mosque. Later, some people expanded the area of this mosque and added a second floor. At present, a group of mosque goers are considering transforming the lower floor into a reception hall. What is the ruling for this?

Using parts of the mosque for different purposes

It is impermissible to take any part of a mosque built on endowed land for any purpose other than praying and mosque related matters, whether permanently or temporarily. No part of it can be rented, sold or used for purposes other than prayers, spiritual retreat [i'tikaf], making remembrance of Allah [dhikr], teaching and learning and for the interest of Muslims in general (while preserving the rights of the mosque goers, people performing prayers and those in spiritual retreat).

Evidence from the Qur'an

Allah Almighty says,
…and mosques where Allah's name is much invoked. [Qur'an 22:40]

Who could be wicked than those who prohibit the mention of Allah's name in His places of worship.
[Qur'an2:114]

In houses of worship, Allah has permitted that they be raised high and that His name be remembered in them, celebrating His glory morning and evening.
[Qur'an 24:36]

Places of worship are for Allah alone-so do not pray to anyone other than Allah. [Qur'an 72:18]

Ruling

It is not permissible to take part of a mosque to establish a reception hall, whether permanently or temporarily and whether or not there is another reception hall nearby.
Allah Most high knows best.