1982 (4) TMI 87 - AT - Income Tax

Summary

Issues:
1. Whether the amount received by the widow of a deceased official of the United Nations from the United Nations Joint Staff Pension Fund is exempt from tax.
2. Interpretation of clause (b) of section 18 of the United Nations (Privileges and Immunities) Act, 1947 regarding exemption from taxation on salaries and emoluments paid by the United Nations to its officials.

Analysis:
1. The appeal involved the question of whether the amount received by the widow of a deceased official of the United Nations from the United Nations Joint Staff Pension Fund is exempt from tax. The assessee claimed exemption based on specific provisions, while the Income Tax Officer (ITO) added the amount to the total income, contending that the assessee was not entitled to exemption as she was not an official of the United Nations. The Appellate Assistant Commissioner (AAC) accepted the assessee's claim, stating that the source of payment being the United Nations entitled to immunity, the nature of payment remained the same whether made to the official or the official's widow. The revenue, aggrieved by the AAC's decision, appealed to the tribunal.

2. The interpretation of clause (b) of section 18 of the United Nations (Privileges and Immunities) Act, 1947 was crucial in determining the exemption from taxation on salaries and emoluments paid by the United Nations to its officials. The revenue contended that the exemption was limited to payments made to officials only, excluding payments to any other person, such as the widow of an official. On the other hand, the assessee's counsel argued that the widow received what her husband would have received, citing relevant regulations and legal precedents. The tribunal analyzed previous judgments and statutory provisions to determine the applicability of the exemption in the present case.

3. The tribunal distinguished previous cases where exemption was claimed for payments made by the United Nations to its officials after retirement, which was not the scenario in the current appeal where the payment was made to the widow of the official. The tribunal emphasized the strict interpretation of exemption provisions and concluded that the widow was not entitled to tax exemption on the pension received. The tribunal reversed the AAC's decision, restoring the ITO's order to include the amount in the assessee's total income. The appeal filed by the revenue was allowed, deciding against the assessee's claim for tax exemption on the amount received from the United Nations Joint Staff Pension Fund.