UID/Aadhaar
“The first target is individuals. Companies and other entities may be tackled later on.” – ASG on forcing Aadhaar on taxpayers
The Supreme Court, which is hearing three public interest litigations (PILs) about linking the Aadhaar number to the permanent account number (PAN) for filing income tax returns, has questioned the government over discrimination between two taxpayers, one with the unique identification (UID) and the other with PAN. Shockingly, Additional Solicitor General (ASG) Arghya Sengupta told the Court that first target (for linking Aadhaar to PAN) are individuals, and companies may be tackled later. During the hearing on Wednesday, the Union government completed its arguments, while counsel for petitioners, senior advocate Shyam Divan, finished his rejoinder. Senior counsel Arvind Datar began his contentions and will complete them tomorrow.  
 
Attorney General Mukul Rohatgi was not present in the Court on Wednesday. In his absence, the ASG, Mr Sengupta, handed over a sealed envelope to the Court. However, the Bench of Justice AK Sikri, and Justice Ashok Bhushan refused to look at it. Justice Sikri said, "We understand no discrimination between individuals and companies now. Anyway Aadhaar (is) not applicable for companies." Justice Bhushan said, "It may happen tomorrow with an amendment to Companies Act." 
 
Justice Sikri asked, "Why discriminate between two people who are willing to pay tax -- One who wants to enrol for Aadhaar and one who does not?"
 
Replying to this, the ASG said, "The object of the Act (Section 139AA of the Income Tax Act) is not discrimination but de-duplication of PAN. No enactment can solve a social problem 100%. In this case the first target are individuals. Companies etc may be tackled later on."
 
 
The arguments in the SC on Wednesday were live-tweeted by the public-spirited Prasanna S (@prasanna_s), based on which we have put together this article.
 
During the hearing on Wednesday, ASG Sengupta cited US precedent where TIN was replaced by SSN. "Similarly, we may also replace PAN with UID in the future," he said.
 
He contended that in India there is no absolute right to informational self-determination. He said, "The State may ask for info in a number of circumstances like births, deaths, and marriages. As I myself found out for personal reasons, the husband must compulsorily register (the marriage). The information that the State asks for is extensive. Nobody challenges it. With fundamental rights, there are no absolutes."
 
Mr Divan, in his counter arguments highlighted how the UIDAI itself states Aadhaar is voluntary, while the government is trying to make it mandatory. “Aadhaar website as of this morning also has a number of resources advertising and stating that Aadhaar enrolment is purely voluntary. The Attorney General (AG)’s representation therefore that Aadhaar is mandatory is contrary to the representations of UIDAI at a number of places,” he said.
 
 
Quoting a decision of Justice Sikri from 2010, Mr Divan cited the definition of fraud, which is knowing misrepresentation that injures another who relies on it. He said, “UIDAI who is a state instrumentality cannot be defrauding the public. The only corollary is that they are making a correct representation, which means that to this date, Aadhaar remains entirely voluntary, which automatically makes the object of 139AA discriminatory. They could have made a similar institution and made such statutory identity mandatory. But they chose to use Aadhaar - which is untenable”. 
 
 
Mr Divan also informed the Bench that JT Dsouza, a Mumbai-based forensic expert, can come to the Court on Thursday, if required and demonstrate how easy it is to replicate and commit identity theft using biometrics. Few years ago, Mr Dsouza had shown the demonstration at Moneylife Foundation during a talk by Col (retd) Mathew Thomas. 
 
 
The senior counsel also informed the Court about first protest of Mahatma Gandhi in South Africa against fingerprinting of Indians as proposed in the draft Asiatic Law Amendment Ordinance. (Read: Even Mahatma Gandhi was against ID cards)
 
Mr Divan also contended how degree of invasion is much higher in Aadhaar and much lower protection. Citing the handbook of registrars of Aadhaar, he explained how they are allowed to retain copies of even biometric data. 
 
 
Earlier in the morning, the ASG had made a plea saying that many did not have an ID in India. Refuting the claim, Mr Divan said, “This point was exaggerated. Only 0.03% of population were issued Aadhaar without existing IDs.”  
 
In his rejoinder, senior counsel Datar stated there is no constitutional argument and heart of the matter is not whether Aadhaar or PAN is good or which is better. “But,” he said, “one must remember civil rights movement started with a woman made to sit at the back of the bus. No one told her not to make big deal. Injunction is not in constitutional law lexicon. But rule of law is important. (The) Parliament cannot legislate against an interim order of SC. This is a competence issue”.
 
 
Contending on Aadhaar and the Section 139AA of the I-T Act, Mr Datar said, “Aadhaar Act is voluntary. Even without SC orders, one needs to harmonize 139AA and Section 3 of the Act. The only option to read shall as ‘may’ in Section 139AA. This was the position before SC orders.  But with SC orders, there is a pure competence issue for Parliament.” Mr Datar will continue his rejoinder on Thursday.
 
Last week, reading out 139AA of the Income Tax Act, senior counsel Divan had pointed out that the scheme under Aadhaar is in collision with the I-T Act. “The Aadhaar Act is voluntary. It contemplates free consent of citizens. If you choose not to apply for Aadhaar, you may not get something. Can you now make it mandatory?” he asked. “Everything from enrolment onwards suggests that you are volunteering for Aadhaar. You cannot engraft into the I-T Act a voluntary scheme.”

 

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COMMENTS

Prakash Bebington

3 months ago

Privacy or Security? Without security, privacy is non-existent. Security first, privacy next. Biometric validation is the most secure method of identification. Aadhar aims to do just that for 127 crore Indians.
If someone has a better way of identification, they should first present that before attacking Aadhar. If they don't, then it's just another stalling tactic of vested interests. Courts must establish this fact soon & expose these anti-social elements for what they are--agents of the corrupt & the shady for whom "Privacy" is the word for "Non-Transparency".

REPLY

Chandragupta Acharya

In Reply to Prakash Bebington 3 months ago

If you think contributing your biometrics, date of birth, address, bank account details, photograph, etc etc to a centralized database maintained by government babus enhances your security, all the best to you.

jaideep shirali

3 months ago

PIOs are getting Aadhar cards and Indian driving licences, duplicate PAN cards have not been surrendered by the holders. Given such a leaky system and the absolute lack of confidentiality of data, I wonder how Aadhar is going to help the nation.

Bapoo Malcolm

3 months ago

Brashtachar. It comes in many ways and has many faces. It is not just about money, as is always made out. To a feudal society that measures success in terms of cash, won or lost, brashtachar is only about cash. We have always said that corruption is more grave when it comes to liberties, civil, human and fundamental. Your rights are being taken away, slowly but surely. You have allowed the doors to be opened to a police state; where incompetence is camouflaged by severe authority. In other words, one is tracked, bullied, browbeaten, subdued. It has started, but everyone is barking up the wrong tree. Your liberty is at stake. And that is the ultimate BRASHTACHAR. But one cannot free those who revere the chains that bind them. And pay homage to the key-keepers.

It's all about your freedom and liberty. Please look beyond the immediate irritant. Darker forces are gathering and they must be repulsed. They are chipping away at the edifice of your liberty and freedom. We need to chip away at the root of dictatorial authority.

What good is a load of cash if one has to look over his shoulder at every step?

Mathew Thomas

3 months ago

There are fundamental questions here. Firstly, were governments, UIDAI lying to the nation when all these years they said enrolment in UID / "Aadhaar" is voluntary? When and why did they change their mind? Can the government legislate to make a its earlier lies legal?

The Act itself was passed as “Money Bill” to avoid discussion in the Rajya Sabha.

Deceit has been the hallmark of the UID / "Aadhaar" scheme right from launch.

No one asks how linking UID / "Aadhaar" to PAN would help weed out fake PAN Cards.

After all, the Income Tax departments issue PAN Cards. Does the department do so without any verification?

If, as the AG claims, there large number of people with multiple PAN Cards, what was the Income Tax department doing all along?

Can the AG tell us, and would the court ask him to explain, how people with multiple PAN Cards evade taxes?

Whatever happened to national security which, according the Parliamentary Standing Committee, the NSA (Doval) and IT minister is jeopardised by UID / "Aadhaar"?

Is national security no longer a concern? Why are these people silent now? Are they so frightened of the PM that they dare not advise him or speak about their convictions?

Since, UID / "Aadhaar" is for residents, which includes, non-citizens, would linking UID / "Aadhaar" enable non-citizen residents to obtain PAN Cards?

And since, banks have been told by this government to accept UID / "Aadhaar" as KYC norm for opening bank accounts, would not non-citizen residents be able to open bank accounts too?

Putting both these together, how simple it would be for a foreign agent to enrol in UID / "Aadhaar", obtain a PAN Card, open a bank account, have hundreds of Crores of Rupees into the account, use it for terror financing or money laundering and vanish to whichever country he / she came from?

Chandragupta Acharya

3 months ago

The limited issue here is whether PAN linkage can be enforced when the matter is sub judice. Many of the arguments here appear to be out of place and deserve to be debated before the Constitution Bench. The Constitution Bench meanwhile needs to prioritize this case and seek forensic opinion before arriving at the judgment. Hope it happens soon.

REPLY

Mathew Thomas

In Reply to Chandragupta Acharya 3 months ago

Which arguments do you find "out of place"? Could you please read the questions raised in my comments above and respond to those too?

Chandragupta Acharya

In Reply to Mathew Thomas 3 months ago

The current matter is about the competence of the Parliament to legislate, and the manner in which it has done - via the Finance Bill - to force citizens into an irreversible position while the larger issues are pending before the Constitution Bench. The merits and demerits of Aadhaar are a different issue altogether.

Mathew Thomas

In Reply to Chandragupta Acharya 3 months ago

No, Sir. Competence of Parliament to legislate and / or way, it was done, is only one argument. It is not the issue before the Court. The issue is whether the amendment to the Income Tax Act making linking of UID / "Aadhaar" to PAN is legal or not. Any Act of Parliament must have some rationale. In the case of this amendment the raison d'etre is that such linking would weed out fake and multiple PAN Cards. To adjudicate on this assertion the Court needs to understand many aspects of UID / "Aadhaar". The many deceits of UIDAI and this government in promoting this scheme would also be relevant in examining the justification for the linkage. I suggest that you read the queries I have raised in my comments here.

Bapoo Malcolm

3 months ago

For those who raved about Modi three years ago, it is a good lesson to learn. A year before he was elected, my aunt, a Jewish war refugee settled in England, asked me what would happen. My answer was, "It will be Hitler and Julius Caesar redux". Do you get me, Steve? (With apologies to AFST).

JAYARAMAN KRISHNAMOORTHI

3 months ago

It is very difficult to get Aadaar for very senior citizens, confined to home and drawing pension income. Arrangements should be made for getting Aadaar for such people at home or they should be exempted.

REPLY

Mathew Thomas

In Reply to JAYARAMAN KRISHNAMOORTHI 3 months ago

Don't worry. They will come home one day. This government of "ache Din" have different ideas about whether pensioners live, starve or die. "Yeh man ki bath hai"! UIDAI is taking heel prints of new born babies since they don't have fingerprints! There are no limits to the stupidity of these clowns.

MGR \MathGonRath\

3 months ago

Do I value my privacy? Yes I do
Do I value my life and the ability to go about my life without being killed/ attacked by persons who go Scott free because they cannot be traced.
Yes I do.
What do I value more. I prefer living over my privacy. Rule of law over privacy. If anyone has better solution please bring it forward or otherwise stop obsturucting Aadhar

REPLY

Mathew Thomas

In Reply to MGR \MathGonRath\ 3 months ago

UID / "Aadhaar" is a complete negation of the Rule of Law. Rational decision making is the fulcrum of the Rule of Law. UID is based on the false premise that biometric IDs are unique. Worse, UIDAI and this government is deceiving people by claiming biometrics as fool proof IDs knowing that it is not so. Have you read the joint research report of 4 of the top most US National Academies of Sciences, Engineering, Medicine and Research Council published in 2010?

UIDAI and government are only pretending to use biometrics. The know it fails. So, they pretend to use it merely to issue numbers to people and claim that these numbers are unique. In their counter-affidavit to my writ in the Supreme Court, ignorantly admitted that 80 million (in 800 million enrolments) were fake or duplicate. Which fool will believe that 1 in 10 persons will enrol twice? UIDAI could not distinguish between fake and duplicate enrolments. That was the reply I received from UIDAI to my RTI query.

The Rule of Law does not permit a government to tell lies to deceive people. If you think that this government respects the Rule of Law, then they and you are followers of Joseph Goebbels.

UIDAI and this government say that our data is not shared. Have you read the contract of UIDAI with foreign private companies who are Biometric Solution Providers? Our entire data is contractually handed over to these foreign firms. Is this the Rule of Law or treason?

MGR \MathGonRath\

In Reply to Mathew Thomas 3 months ago

1) Rule of Law can be defined as the restriction of the arbitrary exercise of power by subordinating it to well-defined and established laws. How is attempting to establish the identities of residents of India negation of rule of law? How is this irrational?
2) While biometrics is not fool proof, in my opinion it is one of the best ways available today to establish identity. Is it fool proof? No. Is there something better available? I am not aware of any alternatives being debated anywhere.
3) India in its current stage of development with its various divisions in caste, creed ethnicity is anyway not a paradigm of freedoms with extra judiciary thugs on the road deciding what anyone can think or eat or do, residents living in perpetual fear of terrorist attacks the identities of whom cannot be traced, tax evasion and various criminal activities which are able to flourish under the cover of anonymity that lack of a basic identification provides. I think we are putting the cart before the horse. We need to provide the basics of food clothing and shelter to all and then aspire to move higher up. Aadhar is a step in that direction. The flaws in it needs to vigorously debated and corrected based on current available technology and our understanding. Stalling or doing away with Aadhar is not a solution. Civilizations as well as its laws are not static and are always evolving to adjust to the environment within which it exists. Opposition to something without providing a better alternative is just stroking ones vanity and is not a solution.


CBI arrests Mumbai IT Commissioner, five others for graft
Mumbai, The CBI arrested an Income Tax Commissioner and five other senior officials here on Wednesday morning, official sources said.
 
Among the arrested on the charges of graft was IT Commissioner (Appeals) B.B. Rajendra Prasad.
 
The Central Bureau of Investigation team also recovered huge cash stash reportedly amounting to around Rs 15 million, investment details and other incriminating documents from the residences of the arrested in south Mumbai and other places, the sources added.
 
The accused were likely to be presented before a court later.
 
The CBI action commenced late on Tuesday night and continued till Wednesday morning.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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'After note ban, dodgy money converted into gold, stored in shell companies'
The massive hunt for undeclared cash launched across the country post demonetisation has revealed that these was either converted into gold or routed through shell companies to make it legal tender, IT sleuths have told IANS.
 
Income Tax officials said black money holders avoided the bank-deposit route because they wanted to conceal their identities and somehow had "managed to get many jewellers" to convert their unaudited cash into gold.
 
"They bought gold and jewellery from jewellers across the cities on November 8 (the night Prime Minister Narendra Modi announced the demonetisation of Rs 500 and Rs 1,000 currency notes from midnight) and, thereafter. Jewellers camouflaged the identities of the actual buyers and offered split bills," an Income Tax official, who was part of the investigations, told IANS on condition of anonymity.
 
According to him, jewellers saw in demonetisation an opportunity to ramp up their sales and thought "they could get away" by showing these amounts as sales.
 
"Jewellers offered a platform to convert unreported cash into gold," the official said, adding that split bills were below the value of Rs 2 lakh, the threshold above which buyers have to provide the permanent account number (PAN) issued by the income tax department.
 
"The buyers' lists provided by the jewellers were false. After verification, it emerged that many of the buyers were financially weak and not in a position to spend such huge amounts shown in the invoices," the official said.
 
Taxmen tried to find an answer to a common question: How did jewellers meet the huge spurt in demand following the announcement of demonetisation, particularly after the festival season?
 
"We found many of these sales were booked as advance collection for future sales. Due to preceding sales during Dhanteras and Diwali, jewellers had a stock crunch and they delivered gold later," another IT official told IANS, asking not to be identified.
 
Taxmen said they have stumbled upon records which suggested many shops -- as many as 90 per cent across cities -- were closed at the time of the demonetisation announcement and sales at the day's closing had been reported.
 
"Still, we found sales were registered in the accounting system either on November 8 or a date prior to that after the closing sales were reported. These sales were manipulated," another IT official said, also requesting anonymity.
 
Sankar Sen, Chairman and MD, Senco Gold Ltd, which was one of the jewellery houses under the I-T department scanner, told IANS: "We keep records of all buyers on the basis of the names and contacts provided by the customers. We cooperated with officials and provided all the documents, including the CCTV footage that we had."
 
"It is difficult for jewellers to verify whether the customers have provided a legitimate identity or not, particularly when the sale value is less than Rs 2 lakh," he said.
 
The hunt for black money by the IT officials picked up after November 29 as they waited for some time to collect information from the Central Board of Direct Taxes (CBDT) or other agencies about the movement of funds.
 
Asked how taxmen identified jewellers, an official told IANS: "The first set of information showed that jewellers deposited huge amounts of money into banks. Then, we went after jewellers."
 
The IT sleuths were able to identify legitimate transactions, easily. "We also had given options to the jewellers to disclose the name of actual buyers or declare that the amount is your money," the official said, pointing out that such moves proved successful.
 
Many actual buyers and jewellers contributed to the Pradhan Mantri Garib Kalyan Yojana (PMGKY), an amnesty scheme to declare unreported wealth.
 
Had a robust and quick information-sharing system among state and central agencies been in place, the hunt for black money would have been more effective, the officials lamented.
 
"A compilation of unique features found in transactions post-demonetisation across states is expected soon," an IT official said.
 
According to the Union Finance Ministry, the CBDT has detected undisclosed income of over Rs 9,334 crore between November 9, 2016, and February 28 this year.
 
Under Operation Clean Money (OCM), more than 60,000 persons, including 1,300 high-risk persons, have been identified for investigation into claims of excessive cash sales after demonetisation was announced.
 
According to officials, shell companies provided a strong support system for black money after demonetisation.
 
The officials found dummy directors of these companies included a cancer patient who signed documents for a Rs 10,000 monthly fee or charges of Rs 200 for every signature.
 
The officials said reporting of cash seizures was relatively less in Kolkata because of the existence of the shell companies as an established channel to stash ill-gotten money.
 
Explaining how active the channel was, the official said: "Many cash handlers with whom we interacted told us that the money does not stay for more than half-an-hour at a particular point."
 
Shell companies were also used as instruments to buy bullion. "We found invoices for bullion sales were generated against such companies while actual beneficiaries received the bullion."
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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COMMENTS

Mahesh S Bhatt

3 months ago

Will Finance Ministry / RBI answer that how much money came back & how much expected profit/loss GoI made?? never in sham managed marketed Democrazy Mahesh Bhatt

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