Strict construction of UN tax exemption denies widow's pension relief, making beneficiary payments taxable

Exemption under clause (b) of section 18 of the United Nations (Privileges and Immunities) Act, 1947 is confined strictly to salaries and emoluments paid by the United Nations to its own officials. A pension paid to the widow of a deceased official in her own right is not treated as payment to the official, and no statutory fiction extended the exemption to such beneficiary payments. The widow's pension was therefore taxable.

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Issues: Whether pension received by the widow of a deceased official of the United Nations from the United Nations Joint Staff Pension Fund was exempt from tax under clause (b) of section 18 of the United Nations (Privileges and Immunities) Act, 1947.

Analysis: The exemption under clause (b) of section 18 applies only to salaries and emoluments paid by the United Nations to its officials. The payment in question was made to the assessee in her own right as the widow of the deceased official and not to the official himself. No statutory fiction was shown to treat such payment as one made to the official, and an exemption provision being an exception to the general rule of taxability has to be construed strictly. The earlier authorities concerning pension payments to retired officials were distinguished because those cases involved payments to the officials themselves, not to a widow or other beneficiary.

Conclusion: The amount received by the widow was not exempt under clause (b) of section 18 of the United Nations (Privileges and Immunities) Act, 1947, and was taxable.

Ratio Decidendi: Exemption from tax under clause (b) of section 18 is confined strictly to salaries and emoluments paid by the United Nations to its own officials and does not extend to pension or other payments made to a widow or other beneficiary of a deceased official.

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