The government on Wednesday faced a major embarrassment in the Rajya Sabha as five of the amendments moved by the opposition to the Finance Bill, 2017, were adopted by division before the bill was returned to the Lok Sabha.
Of the five opposition amendments, three were moved by the Congress member Digvijaya Singh and two by Sitaram Yechury of CPI(M).
The amendments were adopted with a significant margin, with the difference of votes ranging between 27 and 34 votes.
The Bill, which was passed by Lok Sabha last week, was moved for passage in the Rajya Sabha on Monday.
Trinamool Congress, which has 10 members, staged a walkout before the voting in the House where the ruling NDA is in a minority. In the 245-member House, the BJP has 56 members while the NDA jointly has 74 members.
The upper house discussed the bill for over five hours spread across two days with the Congress and other opposition parties taking exception to several provisions of the Finance Bill, stating that the government had sought to amend 40 laws in one go.
Earlier, while replying to the debate, Finance Minister Arun Jaitley strongly defended the government's endeavour to make Aadhaar compulsory for access to various benefits, saying it was necessary to check frauds, including tax evasion.
While talking about Aadhaar, he admitted that it was a "great initiative" of the previous UPA government and said the NDA dispensation is expanding it.
One of the amendments moved by Digvijaya Singh related to a clause which gave powers to an Assistant Commissioner of Income Tax, rather than the Commissioner as prescribed earlier, to order searches. He said junior officers should not be given such powers since the Income Tax Department is already notorious in terms of corruption.
Yechury's two amendments related to a clause linked to political funding.
The amended Finance Bill, which contains provisions for taxation, will now have to be considered again by the Lok Sabha, which can either accept or reject the amendments. If it rejects the amendments, the bill is deemed to have been passed by Parliament.
Jaitley also responded to questions over changes proposed to the Income Tax laws and asserted that any source who reports about any tax evasion, cannot be allowed to be identified.
The Finance Minister said IT authorities will conduct searches on the basis of "satisafction note" which will only be dislcosed to the Courts and not the target of the investigation.
The provision is aimed at protecting the whistleblower which can be a trade union leader, a disgruntled employee or a dissatisfied partner.
His assurances, however, did not cut ice with the Opposition which kept asking questions.
Former Finance Minister P Chidambaram's suggestion that the "satisfaction note" should be shared without disclosing the source of information was rejected by Jaitley, who argued that sharing of the note could be used to track the source of information.
"Nobody can search without satisfactory note. Satisfactory note cannot be made available to the target of the investigation," Jaitley said.
He emphasised the changes in the Finance bill are against "economic offenders" and for protection of whistle blowers. Jaitley said that in order to introduce clean money into politics, the concept of electoral bonds has been proposed.
That will have some advantage to parties which are not in power, the Finance Minister said.
Countering Sibal's assertion that the proposal will benefit only the ruling party, Jaitley said the truth is to the contrary.
"The ruling party has to be large-hearted to really frame a scheme under which people would be without fear of consequences willing to give it to somebody who is not in power," Jaitley said.
He asked the Opposition parties to have a positive approach towards this proposal and give suggestions.
One of our objects also has been not to restrict the constituency of donors, Jaitley said, adding that amendments to the FCRA have also been made to expand the list of donors.
On Opposition's concern over merger of tribunals and appointments being made, Jaitley assured the House that all the judicial appointments will be made in consultation with the Chief Justice.
"If it is the judges, be rest assured that it will be in consultation with the Chief Justice. The judicial appointments will be made in consultation with the judiciary. The object is one related to governance," he said, adding this will be elaborated in while framing the rules.
Jaitley said the tribunals were being merged as "it is a harsh reality that many of regulators and tribunals do not have adequate work".
Citing an example, there are seven river water tribunals at present, whose tenures can be measured in decades.
Now, he said, there will be one river water tribunal which will act on a continuous basis and all the river water disputes will go there.
"In some tribunals, despite the efforts of chief justices, we are not able to get judges because alternate modes of earning are far more attractive," Jaitley said.
He outlined that the amendment being brought in says that the appointments will be made in consultation with the chief justice if you are judges, the executive appointments will be made in that manner.
The Opposition today slammed the government over various provisions of the Finance Bill, saying those amounted to "tax terrorism" and a "serious effort to finish off" the spirit of democratic discourse and Parliamentary democracy."
"This is not a Finance Bill. This is more than a Finance Bill. This is an agenda for reducing Parliament to complete irrelevance. It is FBT..Finance Bill Terrorism," Congress member Jairam Ramesh said in the Rajya Sabha while participating in a debate on the legislation.
"The Finance Bill shows the skill of the Finance Minister to go in for the kill. He has really gone in for the kill in Finance Bill," the former Union minister said.
"I will take up only five clauses of this bill to show how Finance Minister has made serious effort to finish off the spirit of democratic discourse and Parliamentary democracy," he said.
He said Jaitley had introduced a "pseudo inheritance tax", arguing that the transfer of assets to all private trusts will come under the ambit of taxation.
"It is an instrument of transferring assets to next generations. He amended that and said transfer of assets to relatives is exempted. Now the inheritance tax has gone out of the window," Ramesh said.
He also talked about another clause under which the "reason to suspect" will be invoked for going after a suspected tax evasion case.
"This has been condemned by everyone. But I want to condemn for one particular reason, which is that in 2012, when the Vodafone tax decision was taken, the Leader of the Opposition (Jaitley), who is now Leader of the House, called it tax terrorism.
"But Section 132 is tax terrorism to the power of a ten. If vodafone was a tax terrorism, then Section 132 is a Tax 'Jihad'. You have removed reason to believe, to suspect and given untrammelled power to the tax administration and bureaucracy," the Congress leader said.
Ramesh asked the FM, "what is the reason for going back into 1975 to introduce this draconian section. Is is because there are 25,000 cases pending in the High Courts or 2,500 cases pending in Supreme Court. Is it that way for accelerating decision-making. This is completely unacceptable."
On Clause 154 which proposes amendment to Companies Act to remove cap on company donations, he said, "by removing the cap and introducing the element of anonymity, you are going against the very spirit of corporate funding."
He also said that the "Green Tribunal Act has been completely emasculated through the Finance Bill."
On Clause 56, he said, "The Swarajya magazine, which is fully in consonance with the ruling party ideology, says Aadhaar overreach for making it a must for PAN will leave millions vulnerable. We started Aadhaar for better delivery of social services and for eliminating fake identity."
Another Congress leader K Rahman Khan also criticized the government for giving wide discretionary powers to the tax officials, saying this is a "draconian law to terrorise the honest citizens."
Talking about doing away with distinction of Plan and Non-Plan expenditure classification, he said,"Unless you bring accrual-based accounting in government, this capital and revenue classification of expenditure would not help."
P Bhattacharya (Congress) also criticized the government's intention to tax agriculture income and questioned how the income of farmers would be calculated.
Majeed Memon (NCP) attacked the government for its proposal to give discretionary powers to the tax officials.
Kanimozhi (DMK) asked the government to hear the pleas of farmers of Tamil Nadu who are here to meet the minister.
She told the House that the state is going through the worst drought ever in last 170 years.
(With PTI inputs)