1981 (11) TMI 125

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....nited 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(b) 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 benefic....

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..... Before him the assessee agitated that the reopening under section 147(b) 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. P. L. 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 Tribu....

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....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. 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....