Tax evasions necessitate ‘new laws’: SC on Aadhaar-PAN linkage

The question whether the government can insist on citizens having an Aadhaar number has been hanging fire since 2013, with the Supreme Court passing a series of interim orders.

In news:

The Supreme Court, referred to the mandatory linking of Aadhaar to Permanent Account Number (PAN) and Income Tax returns as an instance of the government’s efforts to bring “new and new laws to stop leakages.”

The petition:

The court was hearing petitions filed by Ramon Magsaysay award winner Bezwada Wilson and others challenging the constitutionality of Section 139AA inserted in the Income Tax Act by the Finance Act, 2017.

Section 139AA:

The provision makes Aadhaar mandatory for getting a PAN. Possession of Aadhaar card is necessary for the continuing validity of an existing PAN and for filing returns under the income tax law.

Supreme Court:

When tax evasions are there, the government will try to bring new and new laws to stop leakages.

The Bench responded that Section 139AA was a product of the legislative mandate of the parliament.

The Bench observed that the Parliament cannot be held accountable for any “solemn undertakings” given by the government to the Supreme Court. The court had passed orders in September 2013, March 2014, August 2015 and September 2016 on the basis of government’s assurances that the requirement of Aadhaar for welfare schemes would continue to be voluntary.

Supreme Court cannot question the Parliament’s law unless there is violations of fundamental right like Articles 14, 19, etc.

Aadhaar-PAN linkage:download (3)

A PAN (Permanent Account Number) card is a unique 10 character code that is assigned to all taxpaying entities in India. Issued by the Income Tax Department, the card links all transactions that attract tax under a single source, making it convenient for the government to keep track of these.

A PAN card is necessary for filing Income Tax returns in the country, and all individuals and entities that pay tax, including foreigners are expected to have one.

Besides its primary use, a PAN card is also used as proof of identity and age for everything from booking tickets for a movie, investing in the stock market to applying for a passport.

The Aadhaar card is a unique identification card that is assigned to every Indian citizen. Issued by the Unique Identification Authority of India, the card is a 12 digit number that serves as proof of identity as well as proof of address. An initiative by the government to have a single identification document for every citizen in the country, the card is a personal identification card that contains the individual’s biometric and demographic information.

Aadhaar-PAN linkage is an initiative to link Aadhaar with PAN, with an aim to curb frauds. Some are misled into creating multiple identities with the intention of tax evasion, and of course, expand the headcount of taxpayers by shadowing the transaction trail.

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