1. These appeals by the revenue are directed against the order of the Commissioner holding that the salary received by the assessee from the Commonwealth Secretariat was not taxable in India.
2. The assessee is an individual who was employed as a Transport Advisor attached to the Commonwealth Secretariat and assigned to Nigeria. In the previous year relevant to the assessment years 1976-77 and 1977-78, 75 per cent of his salary was being credited to his account in India and a portion of his salary not exceeding 25 per cent was payable in rupees. Actually 25 per cent of his salary was being remitted to India. The ITO noted that the letter of appointment dated 25-2-1972 mentioned that the Commonwealth Secretariat could not give any assurance that the assessee's emoluments may not be subject to the Indian tax. He was of the opinion that 25 per cent of the total salaries and allowances which was being remitted to India must be added to his total income under Section 5(1)(a) of the Income-tax Act, 1961 ('the Act'). On appeal, the Commissioner (Appeals) found that though there was a house constructed by the assessee's wife in Hyderabad, it could not be said that the assessee maintained a dwelling place in India so as to be treated as a person ordinarily resident in India and to assess the income received in India. He also noted that under a notification dated 14-5-1979, Indian nationals employed with the Commonwealth Secretariat enjoyed the same immunities as officials of United Nations and, therefore, the salary of the assessee was fully exempt from income-tax.
3. In these appeals the revenue is unable to place before us any substantial reason for interfering with the order of the Commissioner.
Firstly, the assessee was employed abroad and we do not see how it could be said that any income from such employment abroad accrued in India. Secondly, merely because a part of that salary which had already accrued abroad was remitted to India, it can hardly be said that such remittance could amount to income received in India. Thirdly, it is only in the case of a person ordinarily resident in India that income that arises to him from outside India could be included in the total income. The revenue is not able to dispute the fact that the assessee never resided in India during the relevant period or had maintained any residence in India so as to fall within the qualification for residence in India prescribed in Section 6 of the Act. Last but not least, the Government have declared that the salary received from Commonwealth Secretariat will be exempt from income-tax. While the revenue is unable to controvert any of the findings above which show that no salary income taxable in India arose to the assessee and without taking any specific ground in the memorandum of appeal, it was urged before us that the notification declaring salary from Commonwealth Secretariat to be immune from tax should not be applied because the notification is dated 14-5-1979 and we are concerned with the assessment years 1976-77 and 1977-78. We are unable to see how this makes any difference because the notification merely declares that the salaries paid by Commonwealth Secretariat will be treated as salaries paid by United Nations so as to attract the provisions of the United Nations (Privileges and Immunities) Act, 1947 and the earlier notification dated 18-1-1968. By that notification, foreign nationals of the Commonwealth Secretariat posted in India were immune from the Indian tax. It is to clear that possible doubt as to whether Indian nationals similarly posted abroad would also be immune from Indian tax that the Government declared that the same privileges applied to them by the notification dated 14-5-1979. The operative word used in that notification is 'declare'.
This is because Section 3 of the United Nations (Privileges and Immunities) Act enables the Government to declare that the provisions of that Act shall mutatis mutandis apply to any other international organisation and the provisions of the Act shall apply accordingly and any such application have the force of law in India. It follows that the Commonwealth Secretariat is treated as equivalent to an international organisation to which that Act applies and the salary paid to the officers working with the Commonwealth Secretariat will be immune from the Indian tax under the provisions of the Act.
Moreover, the declaratory Act is made to remove existing doubts as to the meaning or effect of a statute and, therefore, declares the law as it is and as it had been from the date of its commencement. This principle equally applies to the notification declaring the intention of the Government to treat the salaries paid by Commonwealth Secretariat on a par with the salaries paid by the United Nations. If the revenue had any doubts about the real intention of the Government, one would have expected the revenue to have obtained the clarification from the Ministry of External Affairs and after ascertaining the real intention taken up a specific ground of appeal supported by the clarification from the External Affairs Ministry. We do not think we should allow the revenue to deny the immunity specifically granted by the Government in this offhand fashion.
4. We, therefore, see no reason to interfere with the order of the AAC and the Commissioner (Appeals). The appeals are dismissed.