Possession of an Aadhaar card is necessary for the continuing validity of an existing PAN and for filing returns under the income tax law.
The Supreme Court on Friday questioned the Central government’s’s logic behind making Aadhaar mandatory for filing income tax returns, asking whether this would indeed be a remedy to end the generation of fake PAN and ration cards.
“Is this the remedy? Forcibly asking people to get Aadhaar cards?” Justice A.K. Sikri, who is heading a Bench, also comprising Justice Ashok Bhushan, asked Attorney General Mukul Rohatgi.
The court was hearing a petition filed by former Kerala Minister Binoy Viswam, represented by senior advocate Arvind Datar and advocate Sriram Prakkat, challenging the constitutionality of Section 139AA inserted in the Income Tax Act by the Finance Act, 2017.
The provision makes Aadhaar mandatory for getting a PAN. Possession of an Aadhaar card is necessary for the continuing validity of an existing PAN and for filing returns under the income tax law.
Mr. Rohatgi argued that fake PANs and ration cards have flooded the market and jinxed financial transactions.
“A person can get multiple PANs in the names of Mukesh Gupta, then another PAN as Mukesh Kumar Gupta and a third one as M.K. Gupta, so on and so forth,” Mr. Rohatgi explained the leaky nature of identity proofs now.
He said making Aadhaar mandatory under Section 139AA was a “legislative mandate”.
The court, at one point, asked whether a Constitution Bench had asked the government to continue with Aadhaar on a “purely voluntary” basis till the court decided the very validity of the Aadhaar scheme on the basis of right to privacy.
To this, Mr. Rohatgi said the court itself had agreed to making Aadhaar mandatory in certain fields to protect identity and national security.
“You [Supreme Court) yourself had recently ordered that Aadhaar should be made mandatory to procure SIM cards,” Mr. Rohatgi contended.
Mr. Rohatgi argued that it was a mandatory requirement under Section 139A of the Income Tax Act to allot PAN. Aadhaar is only being linked to it.
“At first they objected to Aadhaar, saying there was no legislation. Then we brought in legislation and now they are complaining about this,” he submitted.
The government was referring to the The Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act of 2016. The enactment of this Act as a Money Bill is itself under challenge in the court on a petition by Congress MP and former Union Minister Jairam Ramesh.
“Going by the Attorney General ‘s logic about fake PANs, I get a PAN card on the basis of showing my Aadhaar as proof. Aadhaar is a basic document along with driving licence, etc. By making Aadhaar mandatory under Section 139AA, my PAN become invalid. This has serious consequences,” Mr. Datar submitted.
He contended that the Aadhaar Act itself does not make obtaining Aadhaar mandatory.
“Section 139AA of the Income Tax Act, 1961, which makes enrollment for Aadhaar mandatory, without making appropriate amendments to the Aadhar Act which till date does not prescribe that the enrolment is mandatory, in a Finance Bill was with the intention of avoiding the Rajya Sabha where the ruling party does not have a majority. It is submitted that the said amendment is completely contrary to Article 110 of the Constitution, which defines a Money Bill,” Mr. Viswam said in his petition.
The court agreed to hear and finally dispose of the petition on next Wednesday.