Absolute immunity for protected foreign exchange remittances bars inquiry into source and supports deletion of tax addition.

Section 3 of the Remittance of Foreign Exchange and Investment in Foreign Exchange Bonds (Immunities and Exemptions) Act, 1991 was read as conferring complete immunity on protected remittances, because it bars disclosure of the nature and source of the remittance, prohibits inquiry or investigation against the recipient on that ground, and makes receipt evidence inadmissible in proceedings under other laws. The court relied on the statutory text, the CBDT circular, and the legislative object of encouraging foreign exchange remittances to hold that the Assessing Officer could not require the remitter's identity or treat the receipt as unexplained for tax purposes. The addition was therefore deleted and the Tribunal's relief maintained.

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Issues: Whether the immunity under section 3 of the Remittance of Foreign Exchange and Investment in Foreign Exchange Bonds (Immunities and Exemptions) Act, 1991 is absolute so as to bar inquiry into the remittance, and whether the addition made on account of the remittance could therefore be deleted.

Analysis: Section 3 of the 1991 Act contains a non-obstante clause and expressly provides that a recipient claiming immunity shall not be required to disclose the nature and source of the remittance, that no inquiry or investigation shall be commenced against the recipient on the ground of having received such remittance, and that the fact of receipt shall be inadmissible in evidence in proceedings relating to offence or penalty under any other law. The statutory language was read as granting complete immunity from inquiry. The explanatory CBDT circular and the legislative object of encouraging foreign exchange remittances supported this construction. Once the remittances were protected by the statutory immunity, the Assessing Officer could not insist upon disclosure of the remitter's identity or treat the receipt as unexplained for the purpose of addition.

Conclusion: The immunity was held to be absolute, and the deletion of the addition was upheld.

Final Conclusion: The appeal failed in full and the assessment relief granted by the Tribunal was maintained.

Ratio Decidendi: Where a special statute expressly bars disclosure, inquiry, and evidentiary use of a protected remittance, the revenue authorities cannot probe the source or identity of the remitter for making a tax addition on that amount.

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