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In a Writ Petition filed by Binoy Viswan, the Division Bench of Supreme Court held that those who have already enrolled themselves would comply with the requirements of section 139AA (2) of the Income Tax Act, 1961. Those who still want to enrol are free to do at their will. However, those assesses who are not Aadhar 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.
The bench of Dr. A.K. Sikri and Ashok Bhushan, JJ, upholding the validity of Section 139AA of Income Tax Act, 1961 that makes the linking of Aadhaar Card to the Permanent Account Number (PAN) mandatory, said that the provision is neither discriminatory nor it offends equality clause enshrined in Article 14 of the Constitution. The bench also said that Section 139AA is also not violative of Article 19(1)(g) of the Constitution insofar as it mandates giving of Aadhaar enrolment number for applying PAN cards in the income tax returns or notified Aadhaar enrolment number to the designated authorities.
The Court, however, clarified that the validity of the provision is upheld subject to the decision of the Constitution bench where the issue relating to Right to Privacy and data leakage due to Aadhaar-PAN linkage is under consideration. The Court said that till the said issue is decided there will be a partial stay on the operation of proviso to sub-section (2) of Section 139AA of the Act, that says that the PAN allotted to the person will be deemed to be invalid in case of failure to intimate the Aadhaar number.
The Court has made it mandatory for Aadhaar number to be linked with PAN card but only for those who already possess an Aadhaar card. While those who do not have an Aadhaar card yet will face no consequences, those who have already been assigned an Aadhaar ID must use it for their income tax return (ITR) filing and link it to their PAN card. The Income Tax department has stepped up its efforts to encourage assesses to link their PAN or Permanent Account Number with Aadhaar.