Press Information Bureau
Government of India
10-June-2017 18:42 IST
Following are the major highlights of the Hon'ble Supreme Court of India's Judgement on Aadhar PAN Linkage:
1. The Hon’ble Supreme Court of India in its Landmark Judgement has
upheld Section139AA of the Income Tax Act,1961 as constitutionally valid
which required quoting of the Aadhaar number in applying for PAN as
well as for filing of income tax returns.
2. The Hon’ble 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 Hon’ble 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 139AA(1) of the Income Tax Act,1961 as introduced by the
Finance Act, 2017 provides for mandatory quoting of Aadhaar/Enrolment ID
of Aadhaar application form, for filing of return of income and for
making an application for allotment of PAN with effect from 1st July,
2017.
6. Section 139AA(2) of the Income Tax Act,1961 provides that every
person who has been allotted PAN as on the 1st day 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 139AA (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 Hon’ble 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 Hon’ble 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 Hon’ble
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 on 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 114B 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 139AA 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
as 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
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.
