1. These are five appeals by the department ; the first four relating to the assessment years 1973-74 to 1976-77 are under Section 143(3), read with Section 147(b), of the Income-tax Act, 1961 ('the Act'), and the last appeal for the assessment year 1977-78 is under Section 143(3). In these five appeals, the common point that arises for consideration is whether the widow's pension received by the assessee from the United Nations Joint Staff Pension Fund is assessable to income-tax.
2. The assessee is the widow of Dr. P. S. Lokanathan, who had been employed under the United Nations Organisation. Under Section 18(6) of article V of the United Nations (Privileges & Immunities) Act, 1947, the salaries and emoluments paid to the officials of the UNO were exempt from tax. The deceased had been contributing 7 per cent of his remuneration to the United Nations Staff Pension Fund as per the regulations of the said Pension Fund. The pension as emoluments, under the said article, was payable to the employee and in case of premature death, the emoluments payable to the employee were actually paid to the nominee. On the death of P. S. Lokanathan, as the beneficiary his widow Smt. Janaki Lokanathan became entitled to the benefit payable as per rules and regulations of the Pension Fund. The assessee had been receiving the widow's pension from the United Nations Pension Board.
The original assessment for the assessment years 1973-74 to 1976-77 were completed in 1976 and 1979. At the time of the completion of the assessments for the four years, the ITO did not include the following amounts in the total income of the assessee :1973-74 15,3361974-75 18,4121975-76 20,8181976-77 30,107 The assessee had shown these amounts in Part HI of the return of income and claimed them as exempt from tax. The ITO, subsequently, acting under the provisions of Section 147(6) of the Act, reopened the assessments for these four years, as in his opinion the widow's pension received by the assessee from the UN Joint Pension Fund was assessable to tax. So, in spite of objections raised by the assessee, the ITO made reassessments and included these amounts in the taxable income for the assessment years 1973-74 to 1976-77. In respect of the assessment year 1977-78 the assessee claimed that a sum of Rs. 32,740 was received by her as pension from the said Fund and was exempt from tax. The ITO did not accept this contention and following his own findings, given in the reassessment made for the year 1974-75, held in his order dated 21-2-1979 that the said amount was assessable to tax.
3. The assessee filed appeals before the AAC, Trichy. Before him the assessee agitated that the reopening under Section 147(6) for the assessment years 1973-74 to 1976-77 is bad. On merits, the assessee contended that the pension payment, received by the assessee is not taxable, as the assessee is only a beneficiary of the pensioner who was an official of the UNO. The learned AAC accepted the assessee's contentions, following the decision of the Appellate Tribunal, Delhi Bench, in the case of ITO v. Dr. PL. Narula [IT Appeal Nos. 483 to 485 (Mad.) of 1971-72] holding that the pension granted to an employee of the UNO was exempt from tax and what applies to the employees, applies to the widow of such a pensioned employee. The AAC also followed the decision of the Calcutta Bench of the Tribunal in the case of ITO v.Smt. Depali Goswami [IT Appeal Nos. 1435 to 1437 (Cal.) of 1977-78].
Since the AAC decided the matter in favour of the assessee on merits, he did not go into the question of jurisdiction, for reopening the assessments under Section 147(6). As against such findings of the AAC, the revenue is in appeal before this Tribunal.
4. The learned departmental representative contended before us that there is no specific exemption from tax in respect of the pension paid to an Indian citizen of the UN Joint Staff Pension Fund and that the decisions of the Delhi and Calcutta Benches of the Tribunal in the cases cited above, have not been accepted by the department, and reference applications have been filed. On the other hand, the learned counsel for the assessee relied on the Tribunal decisions pointed out by the AAC. He also contended that for the assessment years 1973-74 to 1976-77 the reopening of the assessments is bad, inasmuch as the assessee has disclosed all the facts fully and the original assessments were made, exempting this amount, after considering the various pleas raised.
5. After hearing both sides we are of the view that such widow's pension is exempt from tax. The Delhi Bench of the Tribunal in the case of Dr. P. L. Narula (supra), had held that the pension includes salary.
It is admitted that as per Section 18(6) of article V of the United Nations (Privileges and Immunities) Act, 1947, the salaries and emoluments paid to officials of the UNO are exempt from tax. The question relating to the widow's pension came up for consideration before the Calcutta Bench of the Tribunal in Smt. Depali Goswami (supra). The Tribunal held that such pension payments are not taxable, inasmuch as, by making contribution to the pension fund, the deceased had entered into an agreement as debtor and creditor, and the amounts were received in the nature of recompense and not as annuity, pension or salary. It is also further held that the pensioner was paying a part of his savings, out of his income, for safeguarding his interest in old age and his beneficiaries and the debt in respect of the pensioner's contribution existed between the widow and the UNO, and the widow along with her dependent son as beneficiaries were getting back the capital in monthly instalments, though under the scheme, the widow was getting more than what had been contributed by her husband. According to the Tribunal, the amount that the widow received as beneficiary did not reach her as her income, which is intended to be charged. According to the Tribunal, when pension includes salary and when salary is exempt from tax in the hands of the officials of the UNO a fortiori, it could be held that the recompense of the amount received by the beneficiary, as the result of the contribution by her husband, should not come within the purview of the concept of salary or pension. The Tribunal further held that since pension received by the pensioner from the UN was held to be exempt as in Narula's case (supra), it applies to a beneficiary also, because different meaning to a word cannot be given, one for the purpose of taxation and the other for the purpose of exemption. On going through the decision of the Calcutta Bench of the Tribunal in Depali Goswami (supra), we find that the facts of the present case are identical. Hence, following the reasonings stated therein, we confirm the findings of the AAC on the merits of the case.
6. The learned counsel for the assessee urged before us that in respect of the first four years, the assessment years 1973-74 to 1976-77, the reopening of the assessments under Section 147(&) of the Act is bad.
Since the AAC himself had not gone into this question, we do not give a finding on such an issue. If unfortunately the assessee has to fail on merits, then the question of the validity of the reopening of assessments can be gone into.