LS rejects RS amendments to Fin Bill, FM defends taxmen power

The Lok Sabha today rejected all the five amendments made by the Upper House to the Finance Bill with Finance Minister Arun Jaitley stoutly defending taxmen's powers and challenged opposition to give a better proposal than electoral bonds for clean political funding.
With this, the Finance Bill 2017 was approved by Parliament in the form it was approved by the Lok Sabha earlier this month. This completed the legislative approval exercise of budget, demands for grants and tax proposals contained in the Finance Bill 2017 by Parliament.
Terming the amendments to the Finance Bill passed by the Rajya Sabha yesterday as "unfortunate", he said BJP government had in 2001 and the UPA in 2010 brought electoral reforms as part of the Finance Bill.

"It is unfortunate that Rajya Sabha has suggested 5 amendments which I and my government cannot accept," he said.
The Lok Sabha later rejected the Rajya Sabha amendments by a voice vote, thus passing the Finance Bill 2017 and completing the budgetary exercise for 2017-18.
Stating that the present system has two features of "unclean money and total non-transparency", he said presently political parties collect most of the funding in cash. "This is tax evaded money and there is no transparency."

Reasoning why the new concept of political funding through electoral bonds was made part of the budget and finance bill, Jaitley said in 2001 and again in 2010 electoral reforms were part of the finance bill.

"I have an open invitation to all, please suggest to me a better system which can ensure clean money and transparency to the extent possible. I am yet to receive a single suggestion in this regard," he said.
The purchaser of electoral bond have to use cheque to pay and party which receives has to deposit it in a notified bank account. Only the bank knows who has bought the bonds and the doner knows who he or she has gifted them to, he said.
"So this system will ensure clean money. I concede it is only partly transparent. But those who want full transparency have the cheque option (of receiving political donations). But that full transparency and clean money option is a tried, tested and failed system. It has not worked in this country," he said.

He targeted the Congress for having a problem for every solution and asked them to give solutions.
On the Rajya Sabha amendment of putting a cap, he said it will narrow down and restrict the constituency of doners.
With regard to the finance bill proposal of giving more power to taxmen, Jaitley said under Section 132a of Income Tax Act if someone has undeclared income and taxmen get intelligence input about it, it makes a written satisfaction note based on it.
"In that note the informant's identity, nature of information, intelligence information is all listed. After this, a senior officer of the tax department decides if the person has to be searched. This is the law since 1961 and there is no change in that.

"There still will be a Satisfaction Note. It still will be, in writing. So, let us not give these fictional arguments there would not be a piece of paper, you (taxmen) can barge into any property. You (taxmen) cannot do that," he said.
Jaitley said the amendments have come only as a matter of "abundant caution" and the Satisfaction Note would be shared with the Courts.
Rejecting Opposition demand that the Satisfaction Note must be shared with person being investigated, he said it has never been done so since 1961. "It would be disastrous" to share details of investigation with person on whom searches are being conducted.

He said the present provision provides for seizure of valuables like jewellery, gold and paintings found in a search. And now the department is being given powers to attach them and not physically take them away.
On merger of several tribunals proposed, he said where it is required that a Judge be appointed will be done "on the advice and recommendation of the Supreme Court".
Rejecting Opposition charge of including merger of tribunals in finance bill, Jaitley said the move involves money, expenditure and savings and this is not the first time that the merger of tribunals has taken place in the finance bill.

With one amendment, number of tribunals are being merged into one and salary structure made uniform. "So there is just one amendment, merging multiple tribunals into lesser number of tribunals, saving on government expenditure," he said.
Reasoning why the new concept of political funding through electoral bonds was made part of the budget and finance bill, Jaitley said in 2001 and again in 2010 electoral reforms were part of the finance bill.
Stating that the current system has two features of "unclean money and total non-transparency", he said presently political parties collect most of the funding in cash. "This is tax evaded money and there is no transparency."

In 2001, as part of electoral reforms it was through the finance bill that the Income Tax Act was amended to state that if political donations are made through cheque those would be given tax exemption. Political parties would also get tax exemptions for donations received through cheque. This did not yield much results as only few people gave donations through cheque.
Stating that the country cannot be run on slogans, Jaitley said disclosure of name of political doners would lead to drying up of the donations as they may feel the change of the government may lead to vindictive actions against them and any contract if they win will be attached to the donations that they gave.