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Interpretation of government notification for tax exemption on income assessed for a specific year. Analysis: The case involved the Hindu Provident Funds Society, Hyderabad Sind, in liquidation, questioning the applicability of Government Notification No. 11 of 4-4-1936 to the assessment of income levied on 28-10-1937, which was for the year ended 31-3-1936. The assessees declared their total income, including interest on government securities, as exempt from tax under a 1922 notification. However, a 1935 amendment limited the exemption to a specific amount. The assessees argued they were misled by references to a 1936 notification and would have not sought a reference if aware of the 1935 amendment. The court found that even without the 1935 notification, the assessees would not benefit from unlimited exemption as the assessment was for 1936-37, governed by laws and rules applicable at that time. The court rejected the distinction between rates of assessment and exemptions, holding that the assessment must adhere to the laws in force during the assessment year. The court noted that the assessees would be liable for assessment based on the 1935 notification limiting the exemption, regardless of their awareness. The court cited a case against the assessees' argument to support its decision, leading to an affirmative answer to the question referred. Regarding costs, the court ruled that the assessees were not entitled to special consideration, and costs should follow the event, with the assessees bearing the costs of the reference. The Commissioner of Income-tax was awarded costs, including a fee of Rs. 100. The court concluded by answering the reference in the affirmative, affirming the applicability of the government notification to the assessment in question.
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