Black money controversy: Treaties with foreign nations "undermine" Parliament, judiciary, right to know

Top Right to Information (RTI) activist Venkatesh Nayak has alleged that Government of India’s Double Tax Avoidance Agreements (DTAAs) with foreign countries “curb” independence of judiciary, undermine laws made by Parliament, and curtail the scope of the people’s right to know under the pretext of protecting the privacy of high net worth individuals (HNIs), firms and corporations who may be tax evaders. Objecting to the secrecy clause signed with over 100 countries since 1965, involving governments of all dispensations, Nayak said, the fact is, none of the DTAAs were ever ratified in Parliament.

In an analytical article mailed to Counterview on the controversial black money issue, currently rocking India, Nayak said, the bilateral secrecy clause – which has no parliamentary sanction – was also the reason why the Narendra Modi government has refused to reveal “all information and names of accountholders received from foreign countries cannot be disclosed unless there is evidence prima facie of wrongdoing for launching prosecution against tax evasion”.
The issue dates back to 2009, he said, when senior advocate Ram Jethmalani sought under the RTI Act, 2005 the names and details of persons who had allegedly stashed away money abroad. As the Government of India refused the request, Jethmalani and a few reputable citizens filed a writ petition in public interest under Article 32 of the Constitution, in the Supreme Court of India, demanding that these names be made public.
In July 2011 the Apex Court ruled that where investigation had been completed or was under progress, the names and details of such persons must be disclosed. The Congress-led United Progressive Alliance (UPA), in power in Delhi, refused, and a month before it was voted out of power, it handed over some information to the Supreme Court in a sealed cover.
With a change of guard at the Centre in May, the Modi government set up a Special Investigation Team (SIT) headed two former Judges of the Supreme Court with the mandate to investigate all related matters and report to the Supreme Court -- but the secrecy clause has been again been invoked to refuse to reveal names, added Nayak, who is programme coordinator, Access to Information Programme, Commonwealth Human Rights Initiative, New Delhi.
Arguing against Union finance minister Arun Jaitley that secrecy clause under DTAAs are a Congress legacy, Nayak said, the agreement with Germany was concluded on June 19, 1995 and came into force on October 26, 1996 when the Congress under PV Narasimha Rao as Prime Minister and Dr Manmohan Singh as Finance Minister was in power. Then, during the six year BJP-led rule under AB Vajpayee, DTAA agreements were signed with 15 countries – Portugal, Czech Republic, Morocco, Trinidad and Tobago, Qatar, Ukraine, Kyrgystan, Jordan, Austria, Ireland, Slovenia, Sudan, Armenia, Hungary and Uganda.
“Over the last five decades, India has signed DTAAs with more than 100 ‘foreign tax jurisdictions’, starting with Greece, in 1965, under the then Prime Minister Lal Bahadur Shastri and Finance Minister Morarji Desai”, Nayak said, adding, this makes all governments in power -- UPA, NDA, United Front “directly responsible for this curtailment of the scope of the people’s right to information which is a fundamental right implied in Article 19(1)(a) of the Constitution”.
Nayak said, the situation went so far last year that the “audacity to supersede the authority of Parliament and the judiciary” was evident domestically in the thinking within the Department of Income Tax.” The Central Board of Direct Taxes (CBDT) Manual on Exchange of Information (MoEOI) of 2013 said “the provisions of DTAAs override the domestic legislation” and therefore information under it should be “treated as confidential.”
This, Nayak said, is a violation of the “both Section 8(2) of the RTI Act and Section 138(2) of the Income Tax Act”, under which “any tax‐related information may be disclosed to any person in the public interest.” Saying that the guideline “simply ignores these clauses” and “seek to curtail the power of Parliament by declaring that international treaties are above the laws it has enacted such as the RTI Act and the Income Tax Act.”
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