JUDGMENT - Tambe, J. 1. This judgment will govern the decision of both the aforesaid References. They arise out of the same order of the Tribunal. The assesses S. Inder Singh Gill is a resident in Uganda (Africa). We are here concerned with six assessment years, i.e. 1946-47, 1947-48, 1948-49, 1949-50, 1950-51 and 1951-52, the corresponding previous years being financial years ending with 31st of March of each year. For these aforesaid years, one Jeevansingh Grewal was treated as the assessees statutory agent within the meaning of Section 43 of the Act. In those assessments, the only income belonging to S. Inder Singh Gill who is the assessee before us, and to whom we would hereafter refer as the assessee, assessed was income from certain Bombay properties. In February 1955, the Income-tax officer found that the assessee owned In taxable territories certain other properties also. He therefore, with the previous approval of the Commissioner, Initiated proceedings under Section 34 (1) (a) of the Income-tax Act (hereafter referred to as the Act). It is to be noticed that this notice was issued against the assessee himself, and not against Jeevansingh Grewal who had been, in the original assessments, treated as the assessees statutory agent within the meaning of Section 43 of the Act. After receiving the notice, the assessee, in due course, filed returns of his income, and we are here concerned with the three contentions raised by the assessee. 2. (Note: The case is reported only in respect of the third contention. After referring to the first two contentions, his Lordship proceeded:) The third contention raised by the assesses was that during the assessment years, he had paid certain sums to effect an insurance of his life, and he claimed exemption from being taxed in respect of those amounts under Sub-section (1) of Section 15 of the Act. This claim of the assessee was also resisted by the Revenue, and it was contended on behalf of the Revenue that the assessee was not entitled to claim benefit under Sub-section (1) of Section 35 of the Act, because the sums paid by way of premia to effect an insurance on his life were not paid out of the total income of the assessee, but were paid out of his foreign income. The Income-tax Officer rejected the first two contentions of the assessee. The Income-tax Officer rejected the first two contentions of the assessee. In respect of the last contention, namely, as regards the benefit under Sub-section (1) of Section 15, the Income-tax Officer apportioned the said premia account for such year between the assessees total income and his total world income. The assessee feeling dissatisfied, took an appeal to the Appellate Assistant Commissioner. The Appellate Assistant Commissioner not only rejected the assessees contentions, but even deprived the assessee of the proportionate relief allowed by the Income-tax Officer. The assessee took a second appeal before the Tribunal. 3. x x x x It was also contended (before, the Tribunal Ed.) that notwithstanding that the life insurance premia was paid out of the assessees foreign income, the assessee should have been given benefit under Section 15 of the Act. This contention prevailed with the Tribunal, it took the view that to accept the Departments contention would amount to read in the section that "the tax shall not be payable in respect of any sums paid out of his total income by an assessee to effect an insurance". In the opinion of the Tribunal, there was no warrant for reading the words "out of his total income" in Sub-section (1) of Section 15. The Tribunal, therefore held that even though the assessee had paid the premia out of his foreign income, he was entitled to get benefit under Section 15 of the Act. In support of the aforesaid conclusion, the Tribunal has given also other reasons beside the one staled above. But it is not necessary to refer to those reasons inasmuch as learned counsel for the assessee did not support the order of the Tribunal on the strength of those reasons, x x x x x Both the Commissioner of Income-tax as well as the assessee filed applications under Section 66 (1) of the Act. The Tribunal held that Questions of law did arise out of the afcresaid order of the Tribunal. On the application of the Commissioner, the Tribunal has referred the following question in its statement of the case. We will number it as question No. 1: Q. 1. "Whether in the circumstances of the case the assessee was entitled to the benefit of Section 15 (1) of the income-tax Act in regard to the Life Insurance premium paid by him?" This is Income-tax Reference No. 36 of 1959. We will number it as question No. 1: Q. 1. "Whether in the circumstances of the case the assessee was entitled to the benefit of Section 15 (1) of the income-tax Act in regard to the Life Insurance premium paid by him?" This is Income-tax Reference No. 36 of 1959. x x X X Mr. Joshi contends that the assessee, in order to claim exemption under Sub-section (1) of Section 15 of the Act, must first establish that the sums paid by him to effect insurance on his life were paid out of his total Income within the meaning of the Act. Unless and until he establishes this fact, he is not entitled to claim the said exemption. He referred us to the decisions reported in. Commissioner of Income-tax, West Bengal v. Samnugger Jute Factory Co. Ltd., 1953-24 ITR 265 (Cal); Commissioner of Income-tax, Bombay v. National Electric Industries Ltd., 1959-37 ITR 131 and Commissioner of Income-tax Central, Bombay v. N.M. Raiji, 1949-17 ITR 180. On the other hand, it is the contention of Mr. Kolah that there is no warrant for saying that the assessee must establish that the sums paid to effect insurance on his life were paid out of his total income. Sub-section (1) of Section 15 does not in term say so, and it is not open to this Court to read the sub-section in that manner. In the alternative, it is his argument that the assessee had been assessed as a non-resident. That being the case, his foreign income also gets included in the assessment, and in this view of the matter also he is entitled to exemption under Sub-section (1) of Section 15 of the Act. In our opinion the contention raised on behalf of the Revenue is well founded. That being the case, his foreign income also gets included in the assessment, and in this view of the matter also he is entitled to exemption under Sub-section (1) of Section 15 of the Act. In our opinion the contention raised on behalf of the Revenue is well founded. Sub-section (1) of Section 15 is in following terms: "(1) The tax shall not be payable in respect of any sums paid by an assessee to effect an insurance on the life of the assessee or on the life of a wife or husband of the assessee or in respect of a contract for a deterred annuity on the life of the assessee or on the life of a wife or husband of the assessee, or as contribution to any Provident Fund to which the Provident Funds Act, 1925 (19 of 1925) applies." It is true that the sub-section in terms does not say that the tax shall not be payable in respect of any sums paid by an assessee out of his total income to effect an insurance on the life of the assessee. But, in our view, the language in which the sub-section is couched postulates that the sums exempted under Sub-section (1) of Section 15 would have been chargeable to tax but for the exemptions provided by the Act. The exemption granted is from charging the said sums to tax. The question of exempting any sum from being charged to tax arises only when that sum could or would possibly enter the field of that particular taxation. 4. Section 3, which is the charging section, provides that "where any Central Act enacts that income-tax shall be charged for any year at any rate or rates, tax at that rate or those rates shall be charged for that year in accordance with, and subject to the provisions of, this Act in respect of the total income of the previous year of every individual, Hindu undivided family, company and local authority; and of every firm and other association of persons or the partners of the firm or members of the association individually." It follows that income-lax is a tax on the categories of persons mentioned in Section 3 in relation to their total Income of the previous year. Sub-section (15) of Section 2 defines the total income in following terms: "Total income means total amount of income, profits and gains referred to in Sub-section (1) of Section 4 computed in the manner laid down in this Act." That sub-section also defines the total world income in following terms: " "Total world income" includes all income, profits and gains wherever accruing or arising except income to which, under the provisions of Sub-section (3) of Section 4, this Act does not apply and except any capital gain which is not includible in the total income of an assessee." The total income of an assessee thus is the total income within the meaning of Sub-section (1) of Section 4 of the Act. When we turn to Sub-section (1) of Section 4, we find that it first says that, subject to the provisions of this Act, the total income of any previous year of any person includes all income, profits and gains from whatever source derived. It then divides the assessee into two categories -- a person who is a resident in the taxable territories, and a person who is not a resident in the taxable territories. Income received or deemed to be received in taxable territories both of a resident as well as a nonresident assesses enters his total income. In the case of a resident, in addition to the aforesaid income, income accruing to him in taxable territories as well as accruing to him outside taxable territories is included in his total income. Such, however, is not the case of a non-resident. In addition to the income received in taxable territories, the other income added to his total income is only the in-come accruing or arising or deemed to accrue or arise to him in taxable territories during the previous year. The difference thus in short is that practically all his world income enters the total income of a resident assessee. In the case of a non-resident assessee, however, his entire world income does not enter his total income. His total income is confined only to the income received by him in taxable territories, and the income accruing to him or deemed to be accruing to him in the taxable territories. Apart from the exclusions and exemptions provided in the Act, there are the two respective fields of taxation in their widest amplitude. His total income is confined only to the income received by him in taxable territories, and the income accruing to him or deemed to be accruing to him in the taxable territories. Apart from the exclusions and exemptions provided in the Act, there are the two respective fields of taxation in their widest amplitude. Sub-section (3) of Section 4 provides that any income, profits or gains falling within the following classes shall not be included in the total income of the person receiving them. It then enumerates 22 classes of income, profits and gains, which, according to those provisions are not included in the total income of an assessee. The phraseology used in Sub-section (3) of section 4 indicates that when the Legislature intended that a particular class of income should not at all enter total income, it has in terms said so. Sections 5 and 5-A refer to income-tax authorities. Section 6 enumerates the six heads of sources of income. Sections 7 to 12 provide the manner in which the income from these heads is to be computed after allowing certain deductions, and Section 12-B relates to capital gains. Section 13 provides that income, profits and gains shall be computed, for the purposes of Section 10 (business) and Section 12 (other sources) in accordance with the method of accounting regularly employed by the assessee. Section 14 relates to exemptions of general nature. It would be pertinent to note that the exemption provided in Section 14 is an exemption from tax on a particular kind of income or part thereof of an assessee, and not an exclusion of that income from his total income. The exemptions provided in Sections 15, 15-A, 15-B and 15-C are special cases of exemptions from tax. The opening clause of all these sections is identical, and that is: "the tax shall not be payable". Section 15, as already stated, relates to exemption from tax of sums paid by an assessee to effect an insurance on his life or certain other lives, or paid as contributions to any provident fund. Section 16 deals with computation of total income. The heading of Section 16 -- "Exemptions and exclusions in determining the total income" -- is misleading. The section in fact provides what sums are to be included or excluded in determining the total income. Section 16 deals with computation of total income. The heading of Section 16 -- "Exemptions and exclusions in determining the total income" -- is misleading. The section in fact provides what sums are to be included or excluded in determining the total income. Sub-section (1) (a) of Section 16 inter alia provides that the sums exempted under Section 15 are to be included in the total income of the assessee. These provisions of Sub-section (1) (a) of Section 16, which say that the sums exempted from taxation under Section 15 are to he included in the total income show that the sums exempted have the character and quality of being included in the total income of the assessee as the tax payable is determined with reference to the total income of an assessee. It would, therefore, logically follow that when an exemption or relief is claimed under Section 15(1) in respect of any sum, it must be shown that the said sum bears the character and quality of being included in the total income of the assessee with reference to which the tax is levied. Foreign income ot a non-resident assessee does not enter his total income. 5. In 1953-24 ITR 265 (Cal), the assessee had made contributions to the Gandhi National Memorial Fund out of his income other than his income of the previous year, in respect of which he was assessed. He claimed exemption under Section 15-B of the Act. The claim was opposed by the Department on the ground that the contributions to the charities were not made by the assessee out of his total income of the relevant year, and therefore, the assesses was not entitled to the exemption. The assessees contention prevailed with the Tribunal. The findings of the Tribunal were that the amounts were really paid by the assessee and that it was not necessary that the amounts should have been paid out of the income of the previous years relevant to the assessment. The Tribunal, however, referred the matter to the High Court under Section 66 (1) of the Act. The conclusions of the Tribunal were not accepted. In overruling the view taken by the Tribunal, Chakravartti, C.J., at page 272 observed: "Section 15-B belongs to a series of sections which deal with exemptions from tax. The Tribunal, however, referred the matter to the High Court under Section 66 (1) of the Act. The conclusions of the Tribunal were not accepted. In overruling the view taken by the Tribunal, Chakravartti, C.J., at page 272 observed: "Section 15-B belongs to a series of sections which deal with exemptions from tax. The introductory words in each one of those sections are : The tax shall not be payable by an assessee etc." That language contrasts noticeably with the language of Section 4 (3) of the Act which says that income, profits or gains, falling within certain classes shall not be included in the total income of the person receiving them. It is thus clear that while sums to which Section 4 (3) applies are not to be brought into the computation at all and are not to be treated as a part of the assessable income those to which the exemption sections apply are only sums in respect of which no tax Is payable, although the income represented by them is assessable income. It is but common sense that sums in respect of which an exemption from tax is granted must be sums which would be liable to taxation but for the exemption. Exemption, from tax in respect of sums not assessable to tax at all is something wholly meaningless. That the sums, in respect of which exemptions are provided for by Section 14 onwards, are and must be parts of the assessable Income of the assessee, is placed beyond doubt by provisions of Section 16 (1) (a) of the Act, which lays down how the total income is to be computed." The other two decisions to which reference was made by Mr. Joshi do not directly relate to the question which we have to consider. We do not, therefore consider it necessary to refer to them here. Mr. Kolah, in argument, said that the decision in 1953-24 ITR 265 (Cal) has no application to the facts of the case inasmuch as the sums paid by the assessee by way of premia were paid out of the income of the previous year and not out of the income other than the income of the previous year. We are unable to accept this argument of Mr. Kolah. We are unable to accept this argument of Mr. Kolah. The decision of the learned Chief Justice turned on the fact that the exemption claimed was in respect of a sum which did not form part of the assessable income of the assessee. Whether it was paid out of income other than the income of the previous year or was paid out of income not assessable at all would not affect the ratio of the decision. For the purposes of this case, it is not necessary to decide and to avoid possible prejudice to such assessee who pay Life Insurance premia out of income excluded under Section 3 we do not propose to decide that the sums exempted from tax under sub-section (1) of Section 15 are and must be parts of assessable income of the assessee. It is sufficient to say that the assessee must at least establish that ths sums in respect of which he claims exemption from tax under sub-section (1) of Section 15 have or bear the quality of entering the field of taxation in its widest amplitude, apart from the exclusions and exemptions provided in the various sections of the Act. 6. Mr. Kolan referred us to a decision in Sailendra Narayan Bhanja Deo v. Commissioner of Income-tax, Bihar and Orissa, 1959-36 ITR 94. That decision is hardly of any assistance to the assesses. In, that case, the assesses claimed exemption under Section 15-B of the Act in respect of certain donations of Rs. 10,000 made by him to charitable institutions. It was found that the assessees agricultural income amounted to Rs. 5,00,000 and non-agricultural income amounted to Rs. 91,000/-. The account books maintained, however, in respect of both these incomes were composite accounts, and the said sum of Rs. 10,000/- was debited in these books, It was held by the Income-tax authorities as well as the Tribunal that, as there was no proof that the contribution was made solely from out of non-agricultural income, the assessee was allowed exemption to the extent of Rs. 1,754/- being The proportionate amount between the agricultural and non-agricultural income. The question referred to the High Court was "whether in the circumstances of the case, the assessee was entitled to a rebate on the entire sum of Rs. 10,000/- paid to an institution approved under Section 15-B of the Indian Income-tax Act and not on Rs. 1,754/- being The proportionate amount between the agricultural and non-agricultural income. The question referred to the High Court was "whether in the circumstances of the case, the assessee was entitled to a rebate on the entire sum of Rs. 10,000/- paid to an institution approved under Section 15-B of the Indian Income-tax Act and not on Rs. 1,754/-deemed to tie the proportionate amount paid out of non-agricultural income." In the High Court, the assessee filed an affidavit staling that he had made various donations amounting to Rs. 74,000/-, and that the donation of Rs. 10,000/- in respect of which ho claimed exemption was paid out of non-agricultural income, whereas the other donations amounting to Rs. 64,000/- were made out of agricultural income. On reading the decision, it appears that the case of the assessee that the donation of Rs. 10,000/-was made out of a non-agricultural income has been accepted by the High Court. At page 100 of the report (ITR) L (at p. 188 of AIR), it is observed: "The assessee claimed a rebate on the charity made to an approved institution in a sum of Rs. 10,000/-. By making that claim before the Income-tax Department, he clearly indicated that he paid Rs. 10,000/- from out of the non-agricultural income. There is nothing absurd in this. It is quite reasonable that if the non-agricultural income is Rs. 91,000/-, the assessee can pay Rs. 10,000/-out of it towards charity to an approved institution and in the affidavit filed before us also he clearly stated that this charity was paid out of the non-agricultural Income." The income was of that year. The (act accepted was that charity was paid out of this non-agricultural income. That being the position, it is clear that the exemption claimed related to an amount which formed part of the total income of the assesses in that case. We also find it difficult to accept the other argument of Mr. Kolah that the foreign income of a non-resident assessee enters assessment, and therefore, exemption should be granted under Sub-section (1) of Section 15 even if the premia has been paid out of his foreign Income. We also find it difficult to accept the other argument of Mr. Kolah that the foreign income of a non-resident assessee enters assessment, and therefore, exemption should be granted under Sub-section (1) of Section 15 even if the premia has been paid out of his foreign Income. We have not come across any provision of law, nor was any pointed out to us which would go to show that the foreign income of a non-resident assessee enters the assessment for the purposes of determination of the amount of income-tax, unless he opts to throw It in his total income. It is an admitted position that the assessee had not exercised the said option offered to nonresident assessees under Section 17 of the Act. It is true that as a result of the legal fiction enacted in that section foreign income of the non-resident assessee has relevance in the matter of determination of the amount of super-tax payable by him, and in that sense, it may be said to have entered his assessment; but that is altogether a different matter. The said legal fiction cannot be carried any further, and can have no relevance in construing Section 15 (1) of the Act. In our opinion, therefore, in the circumstances of the case, the assessee was not entitled to the benefit under Sub-section (1) of Section 15 of the Act in regard to the life insurance premia paid by him. xxxxxx 7. Answer accordingly.