1981 (11) TMI 125 - AT - Income Tax

Summary

Issues:
Assessment of widow's pension from United Nations Joint Staff Pension Fund for taxability under Income-tax Act, 1961.

Detailed Analysis:

1. Assessment Years and Taxability of Widow's Pension:
The judgment involves five appeals by the department concerning the assessment years 1973-74 to 1977-78 to determine if the widow's pension received from the United Nations Joint Staff Pension Fund is subject to income tax. The deceased employee of the United Nations had contributed to the Pension Fund, and upon his death, the widow became entitled to the pension. The department, through reassessment under section 147(b) of the Income-tax Act, included the pension amounts in the taxable income. The assessee contended that the pension should be exempt from tax based on the nature of the contribution and the beneficiary status.

2. Appellate Tribunal's Decision on Taxability:
The Appellate Tribunal considered the arguments presented by both the department and the assessee. The departmental representative argued against specific exemption for the pension paid to an Indian citizen from the UN Pension Fund, challenging the decisions of other Tribunals. However, the Tribunal relied on precedents, including the Delhi and Calcutta Benches, which held that such widow's pension is exempt from tax. The Tribunal emphasized that the pension includes salary, which is exempt under the UN (Privileges and Immunities) Act, and the pension payments are considered recompense rather than taxable income.

3. Validity of Reopening Assessments and Merits of the Case:
The assessee contested the reopening of assessments under section 147(b) for the years 1973-74 to 1976-77, arguing that all relevant facts were disclosed during the original assessments. The Appellate Tribunal did not delve into the jurisdiction issue as the case was decided in favor of the assessee based on the merit of the widow's pension being exempt from tax. The Tribunal upheld the AAC's decision, citing similar cases and reasoning that the pension received by the beneficiary should not be taxed, following the principles established in previous judgments.

4. Final Decision and Dismissal of Departmental Appeals:
After considering the arguments and precedents, the Appellate Tribunal dismissed the departmental appeals, affirming that the widow's pension from the United Nations Joint Staff Pension Fund is exempt from income tax. The Tribunal's decision was based on the interpretation of the nature of the pension payments, the exemption of salaries under the UN Act, and the principles of recompense rather than taxable income. The Tribunal did not address the validity of the reopening of assessments, leaving it for future consideration if necessary.