Aadhaar Holders must link it with PAN, Non-Aadhaar Card Holders need not apply Aadhaar, says Supreme Court.
A two-judge bench of the Supreme Court today stayed the application of Section 139AA of the Income Tax Act till the pronouncement of verdict by the Constitution bench in matters relating to legality of government order to link Aadhaar Card for filing income tax returns and PAN Card.
Recently, Section 139AA was incorporated to the Income Tax Act vide Finance Act, 2017 requiring mandatory quoting of Aadhaar or enrolment ID of Aadhaar application form for filing of income tax returns and making application for allotment of PAN (Permanent Account Number) with effect from July 1 this year. as per the provision, non-enrolment of Aadhaar by July 2017 would render the PAN of the defaulting individual invalid, attracting serious consequences under the Income Tax Rules.
A number of petitions were filed before the Top-Court challenging the vires of the above provision. The petitioners, including Kerala Ex-Minister and CPI Leader Binoy Viswam had vehemently contended that the new provision “compelling” tax payers to link their Aadhaar Card to PAN would amount to violation of right to privacy.
He further contended that as per the Supreme Court verdict in 2015, the Aadhaar “was not mandatory” for all the citizens. It was held that Aadhaar should be voluntary and no benefits can be denied for want of it. The petitioner, therefore, contended that the scheme itself, was voluntary and the card is to be obtained only on the consent of the individual.
According to the petitioner, he did not have an Aadhaar card on the legitimate expectation that the said scheme “was not mandatory” in view of the earlier SC’s orders. In its earlier ruling, the Apex court held that Aadhaar should be voluntary and no benefits can be denied for want of it. According to the petitioner, the scheme itself, was voluntary and the card is to be obtained only on the consent of the individual.
The Court, however, refused to consider the privacy and human dignity aspects and limited the matter to Article 14 and 19 since the matter is pending before the constitution bench.
The bench concurred with the argument of the Government that the primary purpose of introducing this provision was to take care of the problem of multiple PAN cards obtained in fictitious names.
While accepting this contention, Justice A.K Sikri said that people who do not have Aadhaar Card are not bound to apply for it till the verdict of the Constitution Bench. It was clarified that “assesses who are not Aadhaar card holders and do not comply with the provision of Section 139(2), their PAN cards be not treated as invalid for the time being.” However, people who have Aadhaar must link it with PAN Card since it is necessary to prevent fake PAN cards.
“The provision is aimed at seeding Aadhaar with PAN. We have already held, while considering the submission based on Article 14 of the Constitution, that the provision is based on reasonable classification and that has nexus with the objective sought to be achieved. One of the main objectives is to de-duplicate PAN cards and to bring a situation where one person is not having more than one PAN card or a person is not able to get PAN cards in assumed/fictitious names. In such a scenario, if those persons who violate Section 139AA of the Act without any consequence, the provision shall be rendered toothless. It is the prerogative of the Legislature to make penal provisions for violation of any law made by it. In the instant case, requirement of giving Aadhaar enrolment number to the designated authority or stating this number in the income tax returns is directly connected with the issue of duplicate/fake PANs.”
It further said that the government may take appropriate steps to allay people’s fear about leakage of data.
Read the full text of the Judgment below.
