Aadhaar-PAN linkage meant to plug tax leaks, says SC

We as citizens are like that... we don’t want to pay taxes, shame on us: Justice Sikri

Slamming a tendency in the country to evade taxes, the Supreme Court referred to the mandatory linking of Aadhaar to the 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.”

“When tax evasions are there, the government will try to bring new and new laws to stop leakages. We as citizens are like that... we don’t want to pay taxes, shame on us. This conduct and character is seen for example at the time of matrimonial alliance. Then the groom has the best income. The moment the estranged wife files a maintenance application, the same boy is a pauper,” Justice A.K. Sikri, leading a Bench comprising also of Justice Ashok Bhushan, observed orally on Wednesday.

The court was hearing petitions filed by Ramon Magsaysay award winner Bezwada Wilson, former Kerala Minister Binoy Viswam and ex-Army officer S.G. Vombatkere, represented by senior advocates Arvind Datar, Shyam Divan, Sriram Prakkat and Vishnu Sankar, challenging the constitutionality of Section 139AA inserted in the Income Tax Act by the Finance Act, 2017.

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

AG cites fake PANs

Attorney-General Mukul Rohatgi said there were “five to 10 lakh fake PAN cards generated every year.” “What are you propagating here in the name of public interest, fake PANs,” he asked the petitioners.

To prove that Aadhaar was not foolproof, Mr. Datar responded that 132% of the population of Delhi is shown to have taken Aadhaar cards and 104% all over the country.

‘Agencies blacklisted’

At least 34,000 agencies which dealt with collecting data for Aadhaar were blacklisted.

But the court said these statistics did not necessarily mean that bogus Aadhaars were in circulation. Mr. Rohatgi said the biometric technology used in Aadhaar left no chance for duplication.

Mr. Divan argued that Section 139AA was an instance of how the relationship between the state and citizen was shaping up.

“The state is seeding Aadhaar everywhere, in your bank accounts and in income tax returns. In no time, the state will know what your persuasions and beliefs are without you even having to tell it,” he submitted.

The Bench responded that Section 139AA was a product of the legislative mandate of Parliament. The Bench observed that Parliament cannot be held accountable for any “solemn undertakings” given by the government to the Supreme Court.