United Nations pension exemption upheld for a widow where the payment remained linked to the deceased employee's service.

Pension paid to the widow of a former United Nations employee was held to fall within the exemption for salaries and emoluments paid by the UN under section 18(b) of article V of the United Nations (Privileges and Immunities) Act, 1947. The court treated pension as part of salary for income-tax purposes and found that the payment arose from the deceased employee's service, remained connected to that employment, and was paid out of United Nations funds. On that basis, the statutory immunity applied and the widow's pension was exempt from tax.

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Issues: Whether pension received by the widow of an ex-employee of the United Nations Organisation was exempt from income-tax under section 18(b) of article V of the United Nations (Privileges and Immunities) Act, 1947.

Analysis: The exemption in section 18(b) covers salaries and emoluments paid by the United Nations. Pension is treated as part of salary for income-tax purposes under the definition provisions of the Income-tax Act. The widow's pension was not independent of the deceased employee's service but arose from that employment and was paid out of United Nations funds. The legal character of the payment therefore remained connected with the employment so as to attract the statutory immunity.

Conclusion: The widow's pension was exempt from tax, and the question was answered in favour of the assessee and against the Revenue.

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