PAN-Adhar linking to check the tax evasion

PAN-Adhar linking to check the tax evasion

In order to curb the tax evasion in India, the centre has proposed and  implemented the linking of the PAN and Aadhar card. Justifying this amendment to the Income Tax Law, the centre told the Supreme Court that linking of Permanent Account Number (PAN) with Aadhar will help in keeping the tabs on the black money and reduce tax evasion, as only the usage of PAN is not foolproof.

Fake PAN Cards Make It Impossible To Find Out Tax Defaulters

As many as 10 lakh fake PAN cards are made every year. The Attorney General Mukul Rohatgi, while appearing before the bench of Justices Ashok Bhushan and A K Sikri said that it is very easy to get duplicate or fake PAN cards, and people do it for many reasons, of which tax evasion is a primary reason.

He also said that considering this, a new provision of the Section 139AA was added in the law recently passed by Parliament, making it mandatory to quote the Aadhar card details for both, allotment of PAN cards from 1st July’ 2017 and for filing the income tax returns.

Challenging the constitutional validity of the Section 139AA and opposing the plea made by a bunch of petitioners, Rohatgi told the justices that the only way to prevent duplication is the biometric system, as there is no way that people can be stopped from getting the duplicate Aadhar or PAN cards. The linking of PAN and Aadhar would be quite effective in monitoring the cases of the tax evasion. He also made it clear that , people procure multiple PAN cards which are then used for diverting funds to the shell firms and for the illegal transactions.

The senior advocates appearing for the petitioners accentuated that fact that as per the Aadhar Act, the Aadhar card is voluntary and if it is not mandatory for people to possess te Aadhar card, then how, can it be made mandatory for filing the Income Tax. It was also mentioned that even after giving the repeated assurance to the Supreme Court, Centre backtracked from its solemn promise that Aadhar card would not be made mandatory.

Now, as the Supreme Court gave the petitioners to put their arguments, it would be interesting to see that whether the Centre stays firm on its decision about linking the PAN and Aadhar card, or makes some changes to this suggested policy.