Aadhaar mandatory for filing ITR ? – Supreme Court Judgment

By | June 10, 2017
(Last Updated On: June 16, 2017)

Key Highlights of Supreme Court of India’s Judgement  on  Aadhar PAN Linkage

(i)     From July 1, 2017 onwards, every person eligible to obtain Aadhaar must quote their Aadhaar number or their Aadhaar Enrolment ID number for filing of Income Tax Returns as well as for applications for PAN;

(ii)  Everyone who has been allotted permanent account number as on the 1st day of July, 2017, and who has Aadhaar number or  is eligible to obtain Aadhaar number, shall intimate his Aadhaar number to  income tax authorities for the purpose of linking PAN with Aadhaar;

(iii) However, for non-compliance of the above point No.(ii), only a partial relief  by the Court has been given to those who do not have Aadhaar and who do not wish to obtain Aadhaar for the time being, that their PAN will not be cancelled  so  that other consequences under the Income Tax Act for failing to quote PAN may not arise.

SUPREME COURT OF INDIA

Binoy Viswam

v.

Union of India

A.K. SIKRI AND ASHOK BHUSHAN, JJ.

WRIT PETITION (CIVIL) NOS. 247, 277 & 304 OF 2017

JUNE  9, 2017

Held

  • We hold that the Parliament was fully competent to enact Section139AA of the Act and its authority to make this law was not diluted by the orders of this Court.
  • We do not find any conflict between the provisions of Aadhaar Act and Section139AA of the Income Tax Act inasmuch as when interpreted harmoniously, they operate in distinct fields.
  • Section139AA of the Act is not discriminatory nor it offends equality clause enshrined in Article 14 of the Constitution.
  • Section139AA is also not violative of Article 19(1)(g) of the Constitution insofar as it mandates giving of Aadhaar enrollment number for applying PAN cards in the income tax returns or notified Aadhaar enrollment number to the designated authorities. Further, proviso to sub-section (2) thereof has to be read down to mean that it would operate only prospective.
  • The validity of the provision upheld in the aforesaid manner is subject to passing the muster of Article 21 of the Constitution, which is the issue before the Constitution Bench in Writ Petition (Civil) No. 494 of 2012 and other connected matters. Till then, there shall remain a partial stay on the operation of proviso to sub-section (2) of Section139AA of the Act, as described above.

Brief Summary of judgment

The Supreme Court on Friday put a partial stay on the implementation of the provisions in the Income Tax (I-T) Act making Aadhaar number mandatory for allotment of PAN card and filing of income tax returns (ITR).

However, the apex court upheld the validity of Section139AA of the I-T Act, subject to the outcome of the batch of petitions before its Constitution bench which is examining if the Aadhaar scheme infringes on the Right to Privacy and if there is threat of data leakage.

A bench comprising Justices A K Sikri and Ashok Bhushan also upheld the legislative competence of Parliament in enacting the law to this effect.

It also clarified that it has not touched upon the issue of Right to Privacy and other aspects that the Aadhaar scheme affects the human dignity, which has to be decided by the Constitution bench.

The bench asked the government to take appropriate steps to ensure there was no leakage of data from the Aadhaar scheme.

“The government to take proper and appropriate steps and the scheme in this regard has to be devised at the earliest till confidence among the citizens that the data would not be leaked,” the bench said.

The bench made it clear that there was no conflict between the impugned provisions of the Income Tax Act and the Aadhaar Act.

It also said that PAN card without Aadhaar number would not be treated invalid till the Constitution bench decides the larger issue of Right to Privacy.

It said previous transactions won’t be affected or nullified with partial stay on the new law till privacy issue linked to Aadhaar is decided. The Centre had earlier said that the programme of PAN had become suspect as it could be faked, while Aadhaar was a “secure and robust” system by which the identity of an individual could not be faked.

 Download Complete Judgment

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