Supreme Court verdict on Aadhaar-PAN link reserved

New Delhi: The Supreme Court on Thursday reserved its verdict on petitions challenging the constitutional validity of Section 139 AA in the Income Tax Act making it mandatory to link Aadhaar card with PAN for the purposes of filing of Income Tax returns from the assessment year 2017-2018.

A bench of Justices A.K. Sikri and Ashok Bhushan reserved verdict at the conclusion of arguments by senior counsel Arvind Datar along with Sriram Parakkat and former Union law minister Salman Khurshid assailing the law. The bench was hearing petitions filed by Binoy Viswam, CPI national executive member and former Kerala minsiter, Major General S.G. Vombatkere (Retd) and social activist Bezwada Wilson, challenging the introduction of Section 139 AA in the Income Tax Act.

Mr Arvind Datar said under the “draconian law,” if Aadhaar is not linked with the PAN, my PAN card will be invalid and one cannot make any business transactions, which will have far reaching consequences with one’s right to carry on trade. This law must go from the statute book, he said.

The counsel said due to the introduction of Section 139AA of the Income Tax Act, 1961, people are being coerced into obtaining an Aadhaar card in complete violation of his right to privacy as enshrined under Article 21 of the Constitution. The same is evident insofar as the non-enrollment by July 1, 2017, shall render the PAN of the defaulting individual invalid, and thereby, attracting the consequences under the Income Tax Rules.

He said that when an existing regime of PAN is in place, the said provision has been enacted merely to render nugatory the larger bench reference of validity of Aadhaar card pending before this court. Bringing such a provision as an amendment to the Finance Bill, falls foul of Article 14 of the Constitution, he said.

Mr Datar said there cannot be a dichotomy between two laws passed by Parliament; while Aadhaar Act makes possession of Aadhaar card voluntary, the new law makes it mandatory for linking it with PAN. The new law has been enacted in flagrant violation of constitutional principles and in violation of orders passed by the apex court that Aadhaar is voluntary, except for availing certain benefits. If this is so, then no order of the apex court will be safe, he argued and said they could have brought amendments in Aadhaar law and made it mandatory. Justice Sikri observed in lighter vein “they can’t say that if you don’t have Aadhaar you need not pay income tax.”

Counsel said the government has an agenda to promote Aadhaar step by step as if it is a panacea for all ills, whether it is to curb black money or to deal with terrorism. He rejected the Attorney General’s submission that out of 29 crore PAN cards, five crore PAN cards are bogus. He pointed out that as per the government records only 0.4 per cent of the PAN cards are fake or duplicate. While so how can the government harass 99.6 per cent of the population and insist on Aadhar.

He said “the government has constructed a bridge and is now searching for the river” as the law has no nexus with the object which is sought to be achieved.        He prayed for quashing the provision and an interim stay of its operation.

Mr. Khurshid supplementing the arguments said the pain of losing one’s identity throguh a biometric system or  otherwise, would be quite severe. Human attributes that allow others to ecognise each other closely aligned with the person’s dignity and as such they warrant protection. He said Aadhar card cannot be made mandatory for filing income tax returns unless and until suitable measures are put in place to ensure that the dignity of the assessees is not compromised with.

The former Law Minster argued that the fact that the impugned provision creates an apprehension in the minds of the people, legitimate and reasonable enough with no preventive mechanism in place, is in itself a violation of the right to life and personal liberty.