PRESS RELEASE New Delhi,10th June,
2017.
SUPREME COURT JUDGEMENT ON AADHAR - PAN
LINKAGE
1.Honourable Supreme Court in its
landmark judgement has upheld section 139AA of the Income Tax Act as
constitutionally valid which required quoting of the Aadhaar number in applying
for PAN as well as or filing of income tax returns.
2.The Court also held that the “Parliament
was fully competent to enact Section 139AA of the Act and its authority to make
this law was not diluted by the orders of this Court.”Therefore, no violation
of the earlier Supreme Court orders were found in enacting the provision.
3.The Court has also held that section
139AA of the Act is not discriminatory nor it offends equality clause enshrined
in Article 14 of the Constitution.
4.Section 139AA is also not
violative of Article 19(1)(g) of the Constitution in so far as it mandates giving
of Aadhaar number for applying PAN and in the income tax returns and linking
PAN with Aadhaar number.
5.Section 39AA(1) of the IncomeTax
Act as introduced by the Finance Act, 017 provides for mandatory quoting of Aadhaar/Enrolment
ID of adhaar application form, for filing of return of income and for making an
application for allotment of PAN with effect from 1stJuly, 2017.
6.Section 139AA(2) of the Income Tax
Act provides that every person who has been allotted PAN as on the 1stday of
July, 2017, and who is eligible to obtain Aadhaar, shall intimate his Aadhaar
on or before a date to be notified by the Central Government. The proviso to
section 39AA(2) provides that in case of non-intimation of Aadhaar, the PAN allotted
to the person shall be deemed to be invalid from a date to be notified by the Central
Government.
7.The Supreme Court has upheld section
139AA(1) which mandatorily requires quoting of Aadhaar for new PAN applications
as well as for filing of returns.
8.The Supreme Court has also upheld
Section 139AA(2) which requires that the aadhaar number must be intimated to
the prescribed authority for the purpose of linking with PAN.
9.It is only the proviso to Section 139AA(2)
where the Supreme Court has granted a partial stay for the time being pending
resolution of the other cases before the larger bench of the Supreme Court. The
Supreme Court has unequivocally stated as follows:“125. Having said so, it
becomes clear from the aforesaid discussion that those who are not PAN holders,
while applying for PAN, they are required to give Aadhaar number. This is the
stipulation of sub-section (1) of Section 139AA, which we have already upheld.
At the same time, as far as existing PAN holders are concerned, since the impugned
provisions are yet to be considered in the touchstone of Article 21 of the
Constitution, including on the debate around Right to Privacy and human
dignity, etc. as limbs of Article 21, we are of the opinion that till the aforesaid
aspect of Article 21 is decided by the Constitution Bench a partial stay of the aforesaid
proviso is necessary. Those who have already enrolled themselves under Aadhaar
scheme would comply with the requirement of sub-section (2) of Section 139AA of
the Act. Those who still want to enrol are free to do so. However, those
assessees 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. It is only to facilitate other transactions which are mentioned in Rule 14B
of the Rules. We are adopting this course of action for more than one reason.
We are saying so because of very severe consequences that entail in not
adhering to the requirement of sub-section (2) of Section 39AA of the Act. A
person who is holder of PAN and if his PAN is invalidated, he is bound to
suffer immensely in his day to day dealings, which situation should be avoided
till the Constitution Bench authoritatively determines the argument of Article
21 of the Constitution. Since we are adopting this course of action, in the interregnum,
it would be permissible for the Parliament to consider so to whether there is a
need to tone down the effect of the said proviso by limiting the consequences.”
10.Finally the effect of the judgement
is as following:
(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 1stday of July, 2017, and who has aadhaar number or is eligible
to obtain Aadhaar number, shall intimate his Aadhaar number to income tax
authoritiesfor the purpose of linking PAN with Aadhaar;
(iii)However,for non-compliance of
theabove 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.
(Meenakshi J Goswami)
Commissioner of Income-tax (Media &
Technical Policy) Official Spokesperson, CBDT.
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