Government’s decision to link Permanent Account Number (PAN) of citizens with their Aadhaar numbers got the Supreme Court’s backing yesterday with the top court saying ‘there was nothing wrong prima facia with Modi government’s move’.
The bench of Justices AK Sikri and Ashok Bhushan noted that ‘it is a shame that people evade tax’ and that the government was ‘trying to plug all evasions and leakages through this move’.
“We can understand if there is tax avoidance, but there are tax evasions… Once there is tax evasion, the government has to come out with new provisions,” the court observed.
Pointing to the attitude of people not paying the taxes, the bench remarked, "We citizens don't want to pay taxes, shame on us. When boy gets married, he has best income but when wife files for alimony he is a pauper."
As per the changes brought by the government in the Finance Bill, those PAN cards that are not linked with Aadhaar numbers will lose their validity.
The apex court further asked whether it can ‘restrain Parliament’ from passing a law linking Aadhaar with PAN for filing income tax returns even though the government has in the past given an undertaking that possessing Aadhaar card was voluntary.
"Can we restrain Parliament from passing a law linking Aadhaar number with PAN?" it asked the petitioners, noting that ‘a statement (undertaking that possessing Aadhaar number is voluntary) was made (by the government) in some context, does it bind them and prevent the Parliament from making a law?’
The court said that this in the course of the hearing of two petitions challenging the newly inserted Section 139AA of the Income Tax Act that mandates linking Aadhaar number with PAN for the purposes of filing income tax returns.
The government had inserted Section 139AA in the Income Tax Act through the Finance Act, 2017, with the objective of curbing the black money.
Describing the linking of Aadhaar number with PAN as ‘oppressive, erroneous and arbitrary’, the petitioner told the court that when there was a solemn undertaking by the Centre that Aadhaar was not mandatory and would not be forced upon the people, the government cannot through the Income Tax Act make it compulsory.
Senior leader of the Communist Party of India Binoy Visman, former Indian Army officer SG Vombatkere and founder and convenor of Safai Karamchari Andolan Bezwada Wilson have moved the court challenging the validity of the Section 139AA of the Income Tax Act.
"542 people were there (in Lok Sabha), why did they not raise these points," the bench asked as senior counsel Arvind Datar said that court has struck down legislations on the grounds of them being arbitrary.
Raising the question of proportionality and the object sought to be achieved, Datar wondered, "If you want to check black money, what is the nexus of the war on black money and mandating individuals to link Aadhaar number with PAN?"
How can black money flow end if Section 139AA makes linking of Aadhaar with PAN only in the case of individuals filing returns and not the companies, Datar said, pointing out that there are a large number of categories where possessing Aadhaar number was mandatory.
Attorney General Mukul Rohatgi opposed the challenge, saying that when the government gave solemn undertaking of keeping Aadhaar voluntary it was an executive scheme. Now it is a statutory scheme after the passing of the law by the Parliament.