The Supreme Court on Friday upheld the newly-inserted provision in the Income Tax Act mandating linking of Aadhaar number with Permanent Account Number (PAN), but it partially stayed its operation.
A bench of Justice A.K. Sikri and Justice Ashok Bhushan said that those who already possess Aadhaar number will have to link it with PAN, but it cannot be insisted upon in case of people not possessing Aadhaar card.
Holding that the said provision in the IT Act was not violative of Article 14 (Right to Equality) and Article 19, Justice Sikri pronounced the judgment and said that the new provision may be effective prospectively and not retrospectively, and the transactions already undertaken in the past cannot be reopened.
The two-judge bench of the apex court was hearing a bunch of petitions filed challenging the constitutional validity of section 139AA in the Income Tax making Aadhar mandatory for filing income tax returns.
Urging the Centre to take note of the leaks and to take remedial measures, the SC has upheld Section 139AA of IT Act, saying it is necessary to prevent fake PAN cards
Though fake PANs is a threat, the SC said that Parliament should consider "toning down" the consequences of Aadhaar-PAN linking. The court also warned that invalidating PAN cards of citizens who have not linked them to Aadhaar will invite serious consequences.
The bench of Justice A K Sikri and Justice Ashok Bhushan had on May 4 reserved the verdict on the pleas, challenging section 139AA of the Income Tax (I-T) Act, which was introduced through the latest budget and the Finance Act, 2017.
The petitions filed by Kerala Communist Party of India (CPI) leader Binoy Visman, former major general SG Vombatkere and Magsaysay awardee and convenor of Safai Karamchari Andolan, Bezwada Wilson had challenged the validity of Section 139AA.
Section 139AA of the Income Tax Act provides for 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.
The petitioners had told the court that the provision mandating the linking of Aadhaar number with the PAN would have "extremely far-reaching consequences not only for individuals but small businesses too".
The petitioners had told the court that the government had an agenda to push Aadhaar and pointed to the dichotomy between Aadhaar Act, 2016 that makes possessing Aadhaar optional and the Section 139AA of the Income Tax Act that makes its linking with PAN compulsory.
"A right that is voluntary under Aadhaar Act can't be made a penal provision under the Income Tax Act," petitioner Visman had told the court.
The court was told that "slowly, step by step, the government is making it compulsory by linking it with various things. Is it not a contempt of court?"
The top court by its earlier orders had said that the government could insist upon Aadhaar only for distribution of food grains, LPG and other schemes including MNREGA, old-age pension scheme, provident fund and Prime Minister's Jan-Dhan Yojana.
With IANS inputs