Strict construction of fiscal exemptions barred carry-forward of irrecoverable house-property rent beyond the yearly limit.

A fiscal exemption for irrecoverable house-property rent was construed strictly and limited to the specified yearly relief for income assessed under the head of property. The Punjab & Haryana HC noted that the notification did not create any express right to accumulate or carry forward an unabsorbed balance, and that such a right could not be implied where the text confined relief to one year's rent. The Court also treated the existence of express carry-forward provisions elsewhere in the Act as confirming that carry-forward relief must be stated clearly. Accordingly, excess irrecoverable rent could not be set off in later years.

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Issues: Whether the unabsorbed balance of irrecoverable rent allowed by the exemption notification in respect of income from house property could be carried forward and deducted in subsequent assessment years.

Analysis: The relief under the notification was confined to income assessed under the head "property" and was limited to an amount equal to one year's rent. The tax on property was based on notional annual value, and the notification granted a restricted exemption only when rent had in fact become irrecoverable. The wording of the notification did not provide for accumulation or carry forward of any balance beyond the specified yearly limit. The existence of express statutory provisions in the Act for carrying forward relief in other contexts reinforced that such a right could not be implied into an exemption notification. The Court also held that an assessee could not allow arrears to accumulate over several years and then seek exemption for the entire accumulation.

Conclusion: The unabsorbed balance of irrecoverable rent could not be carried forward to later years, and the answer was against the assessee.

Ratio Decidendi: A fiscal exemption notification must be construed strictly, and where it grants relief only up to one year's rent for irrecoverable property income, no right to carry forward any unabsorbed balance can be implied unless the notification expressly so provides.

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