JUDGMENT
Rama Jois, J.
1. The Income-tax Appellate Tribunal, Banglore Bench, Banglore referred the following common question for the opinion of this court :
“Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that pension received from the United Nations was exempt from taxation ?”
2. In I.T.R.C. No. 93 of 1977, the assessment year is 1972-73. The assessee was an erstwhile employee of the United Nations Organisation (hereinafter referred to as “the U.N.O.”). During the previous year relevant to the assessment year, he received a sum of Rs. 12,780 as pension from the U.N.O. Before the ITO, the assessee claimed that the aforesaid amount receivedfrom the U.N.O. was exempt from taxation in view of the United Nations (Privileges & Immunities) Act, 1947 (hereinafter referred to as “the 1947 Act”). The ITO did not agree with the claim made by the assessee. He was of the view that the claim for exemption from taxation was not available in respect of pension. Aggrieved by the said order, the assessee preferred an appect before the AAC. The appellate authority accepted the contention urged for the assessee. The ITO questioned the correctness of the appellate order before the Appellate Tribunal. The Tribunal affirmed the order of the appellate authority. Thereafter, at the instance of the Commissioner, the question mentioned earlier has been referred for the opinion of this court.
3. In I.T.R.C. No. 122 of 1978, the assessment year concerned is 1975-76. During the previous year relevant to the said assessment year, the assessee was in receipt of pension of Rs. 51,322 from the United Nations. In the said case also, claim for exemption made by the assessee before the ITO on a similar ground was rejected. But the same was accepted by the appellate authority and confirmed by the Tribunal. Thereafter, similar question has been referred for the opinion of this court at the instance of the Commissioner.
4. In our opinion, on a combined reading of the provisions of the 1947 Act and s. 17 of the I.T. Act, 1961, the conclusion reached by the appellate authority and the Appellate Tribunal are correct. The 1947 Act was enacted which received the assent of the Governor-General on the December 20, 1947. The preamble and s. 2 of the said Act read as follows :
“Whereas it is expedient to give effect to the convention on the Privileges and Immunities of the United Nations, and to enable similar privileges and immunities to be enjoyed by other international organisations and their representatives and officials;
It is hereby enacted as follows :-…
2. Conferment on United Nations and its representatives and officers of certain privileges and immunities. -(1) Notwithstanding anything to the contrary contained in any other law, the provisions set out in the schedule to this Act of the Convention on the Privileges and Immunities, adopted by the General Assembly of the United Nations on the 13 day of February, 1946, shall have the force of law in India.
(2) The Central Government may, from time to time, by notification in the official Gazette, amend the schedule in conformity with any amendments, duly made and adopted, of the provisions of the said Convention set out therein.”
5. As can be seen from the preamble, the Act, was enacted for giving effect to the Conventions regarding the privileges and immunities of the United Nations an to enable the representatives and officials of the U.N.O. to enjoy those privileges and immunities. section 2 of the 1947 Act makes the provisions incorporated in the Schedule to the Act as law in India. Section 18, clause (b) of art. V of the schedule, is the provisions which is relevant to the facts of this case :
“ARTICLE V Officials
section 18 : Officials of the United Nations shall :…. (b) be exempt from taxation on the salaries and emoluments paid to them by the United Nations; – …”
6. The ITO in both these cases, took the view that the effect of clause (b) of s. 18 of art V referred to above, was only to exempt the salaries and emolu nents paid to the officials by the U.N.O., and this obviously meant when they were in service and, therefore, the said immunities did not extend topensionery benefits. The ITO failed to notice that under s. 17 of the I.T. Act, 1961, “salary” is defined as including any annuity or pension [vide clause (ii) of sub-s.(1) of s. 17]. As rightly pointed out by the AAC the amount of pension received is chargeable to tax under the head “Salary” and cinsequently, the meaning of expression “salary” given in s. 17 of the I.T. Act, 1961, automatically applies to any amount of pension received by a person which is chargeable to tax under the head “salary” Therefore, it follows that any amount of pension received by the assessee from the U.N.O. falls within the description of the word “salary” used inss. 14 and 17 of the I.T. Act, 1961, and consequently, the immunity granted under s. 18 of art V of the schedule to the 1947 Act becomes applicable.
7. The Tribunal had followed the decision of the Income-tax Appellate Tribunal, Delhi Bench ‘B’, reported in the case of Income-tax officer, district VIII(5),New Delhi v. Dr. P. L. Narula [1975] Tax 38(6),63, which had correctly interpreted the provisions.
8. In our opinion, the view taken by the Tribunal is correct and accordingly, we answer the question referred in both these references in the affirmative, i.e., in favour of the assessee.