Supreme Court says Aadhaar must be linked to IT returns for those who have it
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Supreme Court says Aadhaar must be linked to IT returns for those who have it

The Supreme Court upheld the validity of law making Aadhaar mandatory for PAN, ITR filing, but called on the government to look into concerns raised over data leaks.

india Updated: Jun 09, 2017 22:29 IST
Bhadra Sinha
Bhadra Sinha
Hindustan Times, New Delhi
The court ruling makes it mandatory for people with Aadhaar numbers to link it with their PAN card. However, for those yet to get an Aadhaar number, it isn’t necessary.(HT File Photo)

The Supreme Court upheld on Friday a law that makes it mandatory for Aadhaar-card holders to give their identity numbers while filing income tax returns and applying for permanent account number (PAN).

The top court, however, said it has not addressed privacy concerns over the scheme and said it will be decided by a separate constitution bench.

A bench headed by Justice AK Sikri provided some relief for IT assesses who do not have Aadhaar – a 14-digit unique identification number scheme which critics say is vulnerable to misuse.

SC said the government shall not take penal action against them and invalidate their PAN card because the applicant is bound to suffer immensely in his or her daily dealings.

However, Aadhaar is mandatory if someone wants a fresh PAN card, the court said. Those who have applied for Aadhaar but are yet to get the number are also required to provide the enrolment details while filing their IT returns.

The court partially stayed the amended IT Act because the SC is hearing petitions challenging the validity of the law providing Aadhaar on the ground it infringes upon the right to privacy.

Supreme Court’s ruling
  • The court upheld the law that mandated linking Aadhaar number to Income Tax filing from July 1, 2017
  • Those who have an Aadhaar number will have to link it to their PAN card for filing their IT returns
  • The court read down a portion of section 139 AA, and said the government cannot force people to procure Aadhaar for filing IT returns until the main case challenging its validity is decided by a constitution bench
  • Past transaction of tax payers shall not be opened by government on getting Aadhaar number
  • The court recognised the government’s effort to weed out fraud PAN cards and check cases of tax evasion

The court felt the penal consequences for not adhering to the law was severe and said a citizen not in possession of Aadhaar should not be made to suffer the same until the constitution bench determines the larger issue.

The court asked Parliament to consider toning down the penal action and said the law would have prospective operation. No past transactions can be opened, the court ordered.

As per the amended IT law, quoting of Aadhaar or enrolment ID of Aadhaar application form is compulsory for filing the returns and applying for PAN from July 1 this year.

The court’s verdict came on a batch of petitions filed by social activists, including CPI leader Binoy Viswam, challenging the new law on the ground the Centre cannot “belittle” the top court’s 2015 order holding the unique identification number voluntary. SC had on May 4 reserved its verdict.

The court highlighted the petitioners’ apprehension over possible data leak under the Aadhaar scheme and said efforts must be made to instill confidence in public.

“We emphasise that measures in this behalf are absolutely essential and it would be in the fitness of things that proper scheme in this behalf is devised at the earliest,” the court said, asking the government to prescribe severe penalties for those found guilty of unauthorised leakage of data.

The court said there was no conflict between the provision of the IT Act and the Aadhaar Act, which says enrollment is voluntary. It accepted the government argument that the purpose behind making Aadhaar compulsory under the IT Act is to curb black money, money laundering and tax evasion.

“If the Parliament chooses to make the provision mandatory under the Income Tax Act, the competence of the Parliament cannot be questioned on the ground that it is impermissible only because under Aadhaar Act, the provision is directory in nature,” the court held.

Rejecting the argument that the law impinged upon the right to equality and right to carry out business freely, the court said the new provisions were not discriminatory.

First Published: Jun 09, 2017 14:45 IST