Locus standi of Income Tax Department
Querist :
Anonymous
(Querist) 02 November 2010
This query is : Resolved
What is the locus standi of Income Tax Department in the mutual and private relationship between the bank and its customer by compelling the customer to use PAN card number in banking transactions? Are the relationship of the bank with Income Tax Department and the relationship of customer with Income Tax Department not the two SEPARATE, INDEPENDENT and CONFIDENTIAL relations with the Income Tax Department? Does IT department not become a 3rd party in between the relationship of bank and its customer? If it wants to collect tax from customer of the bank, should it not deal with customer directly rather than poking its nose through the bank?
PURPOSE OF MY QUESTION IS TO EXPLORE THE IDEAS, THAT BY THE FORCING USE OF PAN CARD NUMBER, IS THERE ANY KIND OF VIOLATION OF ANY POINT OF LAW LIKE RIGHT TO PRIVACY OR ANY OTHER LEGAL POINT ETC. BETWEEN BANK AND ITS CUSTOMER.
R.Ramachandran
(Expert) 02 November 2010
Dear Anonymous,
There is absolutely no violation of any privacy.
In fact these are all steps by the Government to plug the loopholes; to avoid evasion of tax; to track the money transactions etc.
It is just like the Telecommunication Department telling the Cellular Phone Companies to obtain the proof of address from its customers.
It is just like the Companies asking the customer to indicate the PAN Card Number in the Application for IPOs.
Querist :
Anonymous
(Querist) 02 November 2010
Adv. R. Ramachandran, I respect your answer. I am aware and understand what you are trying to say. I am not searching for the reasons defending the morality, intentions or purpose of government but searching if any points of law, rights of customer, that may have been violated by IT Department by poking its nose in between the bank and customer.
R.Ramachandran
(Expert) 02 November 2010
Dear Anonymous,
There is no poking of anything by any department in this matter at all.
In fact the Revenue Department has every right to tap its resources to avoid tax evasion. It is its legitimate function. There can be no objection to it. If the banks are required to get the PAN number before opening the Accounts, what is wrong about it. PAN number has been given by the Income Tax Department. If that number is given they want to link up with your account so that the IT Department will be able to verify your transactions, even without your knowledge. There is nothing wrong about it. After all one is supposed to give complete particulars of ones income to the Department.
Even the Department has given instructions to the banks and other financial institutions to report to the Department any high value transactions - say Rs. 50000 and above. Such information provided by the financial institutions to the Income Tax Department (which the customer may not even come to know that information has been made available) cannot be termed as poking any nose in the transaction between the bank and the customer.
Kirti Kar Tripathi
(Expert) 02 November 2010
I agree with Mr. Ramachandran in this regard. Even for the sake of argument, it is presumed that it is encroachment on privacy of a person, the such encroachment is within the limit of constitutional parameters.
Querist :
Anonymous
(Querist) 02 November 2010
Thank you gentlemen, my query is completely satisfied to my satisfaction, especially by the explanation of Adv. Kirti Kar Tripathi by explaining the following:
"Even for the sake of argument, it is presumed that it is encroachment on privacy of a person, the such encroachment is within the limit of constitutional parameters."
