1982 (4) TMI 88 - AT - Income Tax

Summary

Issues:
- Whether the amount received by the widow of a deceased United Nations official from the United Nations Joint Staff Pension Fund is exempt from tax under the United Nations (Privileges and Immunities) Act, 1947.

Analysis:
1. The appeal was filed by the revenue against the order of the AAC, Allahabad Range, concerning the assessment year 1977-78. The assessee, a widow of a deceased United Nations official, received Rs. 60,427 as pension under article 35 of the United Nations Joint Staff Pension Fund. The ITO added this amount to the assessee's total income, denying tax exemption claimed under section 18 of the United Nations (Privileges and Immunities) Act, 1947.

2. The AAC accepted the assessee's claim that the amount received was exempt from tax, 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 contended that only payments to United Nations officials were exempt, not to any other person, including a widow. The assessee's counsel argued that the widow received what her deceased husband would have received, citing legal precedents supporting a broader interpretation of "payment" and tax exemption for retired United Nations officials.

3. The Tribunal noted previous cases where exemption was granted to retired United Nations officials but distinguished the present case as the payment was made to the widow, not the official. Referring to the United Nations (Privileges and Immunities) Act, 1947, which exempts salaries and emoluments paid to United Nations officials, the Tribunal emphasized that no statutory fiction treated the widow's payment as made to the deceased official. Strict interpretation of tax exemptions led the Tribunal to conclude that the widow was not entitled to tax exemption on the pension received from the United Nations Joint Staff Pension Fund.

4. Consequently, the Tribunal reversed the AAC's order, restoring the ITO's decision to include the pension amount in the assessee's total income. The appeal by the revenue was allowed, affirming that the widow's pension was not exempt from tax under the United Nations (Privileges and Immunities) Act, 1947.