Section 94-A of the Indian Income Tax Act, which allows the Indian government (the executive) to notify any jurisdiction, by having regard to the lack of effective exchange of information with it, as a notified jurisdictional area (NJA) has been a bone of contention in a recent ruling delivered by the Madras High Court in India in T. Rajkumar case where the sole section 94-A notification issued in the year 2013 declaring Cyprus as a NJA was challenged along-with impugning the constitutional validity of section 94-A itself, which arguably may lead to an unilateral treaty override, as in the case of India-Cyprus DTAA. Both the statutory instruments were however upheld by the high court, and important to this judicial determination was the affirmation of adherence of India to the theory of ‘dualism’. In this article the author revisits the said contentious statutory instruments with threadbare-pointed legal analysis of the said judgement and other concomitant law and policy issues, along-with examination of the possible reactionary dispute resolution approaches on the international legal plane for resolving the Double Taxation Avoidance Agreement (DTAA) issues, which are not ordinarily resolvable by the domestic courts.
Intertax