Law: Income Tax Act, 1961

Section: 256

Income-tax---Exemption---United Nations---Pension received by widow of employee of the U.N.---Entitled to exemption---United Nations (Privileges and Immunities) Act, 1947. The conventions on the privileges and immunities enjoyed by the international organisations and their representatives and officials, were adopted by the general assembly of the United Nations on February 13, 1946. To give effect to those conventions and immunities, the United Nations (Privileges and Immunities) Act, 1947, was enacted by Parliament. The Act came into force with effect from December 20, 1947. Under section 18(b) in Article V of the Schedule to the Act, officials of the United Nations would be exempt from taxation on salaries and emoluments paid to them by the United Nations. Where the widow of an official receives a pension, what the widow receives, is in consideration of the employment of her husband and not independent of that employment. There being nexus between the pension receivable by the widow after the death of her husband and the salary receivable by the employee of the U.N.O. from the funds of the United Nations from out of which the pension is paid, the principle contained in section 18(b) in Article V of the Schedule to the Act is clearly attracted. The pension received by the widow would be exempt from tax. CIT v. Smt. Dipali Gasowami (1985) 156 ITR 36 (Cal.) and Usha Shah (Sint.) v. CIT (1989) 175 ITR 572 (All.) fol. CIT v. Narula Dr. P.L. (1984) (50 ITR 21 (Delhi) and CIT v. Ramaiah (K.) (1980) 126 ITR 638 (Kar.) ref. JUDGMENT SYED SHAH MUHAMMAD QUADRI, J.---On the direction issued by this Court on the application of the Revenue filed under section 256(2) of the Income Tax Act, 1961, to state the case and refer the question of law, the Tribunal has stated the case and referred the following question of law: "Whether, on the facts and circumstances of the case the Income-tax Appellate Tribunal was justified in holding that the pension received by a widow of an ex-employee of the U.N.O., is exempt from the Income-tax Act?" The said question arose out of the orders of assessment for the assessment years 1972-74 (sic) to 1975-76. The assessee is a widow of one late…

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