Aadhaar Mandatory for filing IT Returns: Madras HC Refuses to Grant Exemption [Read Judgment]

While rejecting the plea for exemption from quoting Aadhaar number while filing income tax returns, Justice T S sivagnanam, on Monday held that the provisions of section 139AA of the Income Tax Act, 1969 mandating quoting of aadhaar number in PAN and Income Tax Returns must be strictly followed.

Ironically, the same Court had granted an interim order allowing one Ms. Preeti Mohan, a lawyer to file income tax returns without quoting Aadhaar Number last week.

In the instant case, the petitioner, one Mr. Thiagarajan Kumararaja sought for a direction to the Assessing Officer to allow him to file his income tax returns for the assessment year 2017-18 either manually or through appropriate e-filing facility without insisting the petitioner to produce his aadhaar card and/or enrollment ID as defined under Section 139AA of the Income Tax Act and not to initiate coercive action against the petitioner.

Refusing to grant exemption, the Court relied on the Apex Court decision in Binoy Viswam’s case, wherein the two-judge bench of the Court had rejected the petitioner’s contention that since enrollment under the Aadhaar Act is voluntary and cannot be made compulsory under the Act, was rejected.

The Court pointed out the findings of the Supreme Court that the Income Tax Act has been enacted with some objectives and for achieving such objects, if the Parliament chooses to make the provision mandatory under the Act, the competence of the Parliament cannot be questioned on the ground that it is impermissible only because under the Aadhaar Act, the provision is directory in nature. “The Hon’ble Supreme Court also held that it is the prerogative of the Parliament to make a particular provision directory in one Statute and mandatory/compulsory in the other and that by itself cannot be a ground to question the competence of the Legislature,” the Court said.

Following the decision in the case of Binoy Viswam, the Court also noted that the Hon’ble Supreme Court has not stayed the Proviso to Sub-Section (2) of Section 139AA of the Act and the partial stay would be applicable only to facilitate the other transactions, which are mentioned in Rule 114B of the Rules, which pertains to transactions, in relation to which, PAN is to be quoted in all documents for the purpose of Clause (C) of Sub-Section (5) of Section 139A of the Act. “Therefore, to state that the partial stay granted by the Hon’ble Supreme Court would enure to the benefit of the petitioner even for filing income tax returns is a plea, which is not sustainable and is liable to be rejected,” the Court added.