Rights of existing PAN holders and individuals not wanting Aadhar protected till larger Constitution bench settles the matter further
Rights of existing PAN holders and individuals not wanting Aadhar protected till larger Constitution bench settles the matter further

Aadhar mandatory for PAN and filing Income tax return: SC

India is one verge of initialising its one nation one tax regime in form of GST roll out very soon. At the same time, the recent supreme court ruling has cleared way to bring in more transparency, control and order through Aadhar linkage to PAN and Income Tax compliance.

Here are excerpts of the salient findings of the Supreme Court (SC) of India’s Judgement on Aadhar PAN Linkage:

1. SC 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. SC 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. SC has also held that Section 139AA of the Act is not discriminatory nor it offends equality clause enshrined in Article 14 of the Constitution.

Sample of Aadhar Card4. 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. SC has upheld Section 139AA(1) which mandatorily requires quoting of Aadhaar for new PAN applications as well as for filing of returns.

8.  SC 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 assesses, 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.


News Update| 12 June 2017| Atal Pension Yojana (APY) gets Aadhar Linkage

With an objective of bringing in transparency, efficiency and to enable beneficiaries to get their entitlement directly in a convenient and seamless manner, Aadhaar card has been constituted as the primary document in identification of the beneficiary under the Aadhaar Act which came into effect from 12th September 2016. The Atal Pension Yojana (APY) has now been included under the Section 7 of the Aadhaar Act. As per the provisions of the Act, any individual who is eligible to receive benefits under the APY will have to furnish proof of possession of Aadhaar number or undergo enrolment under Aadhaar authentication. A copy of the notification is attached.

As per recent date, Atal Pension Yojana currently has more than 54 lacs subscribers with an asset base of more than Rs. 2,200 crores. Also, PFRDA has identified nearly 12.35 lakh subscribers who are eligible for Government of India co-contribution for an amount upto Rs 1000 for the financial year 2016-17 which will be released to the eligible subscribers’ savings bank accounts which are seeded with Aadhaar.

Accordingly, now an APY subscriber will have to get the Aadhaar number recorded  in his or her APY pension account and also in his/ her savings account where the periodic pension contribution instalments are debited and government co-contribution is to be credited. In case a subscriber is not yet having an Aadhaar card, he/ she should immediately get him/ her enrolled for the Aadhaar card for which he or she can visit the nearest Aadhaar enrolment centre. These subscribers are advised to approach their Bank or Postal Branch for seeding their Aadhar Number.

 

News Update|12 July 2017|

 Aadhaar an effective instrument in removing corruption and enabling citizen empowerment: Prasad 

On 11th July, 2017 CSC SPV organised a workshop on “Aadhaar Services through CSC – A Unique Initiative” to showcase the impact and progress made by the Village Level Entrepreneurs (VLEs) in delivering Aadhaar services among the poor and marginalized communities in India, through the Common Services Centres (CSCs). Union Minister for Electronics & IT and Law Justice, Ravi Shankar Prasad inaugurated the event held at India Habitat Centre, New Delhi. He appreciated the efforts of the enterprising VLEs in providing key services at the grassroots level.

Ravi Shankar Prasad lighting the lamp to inaugurate the workshop on “Aadhaar Services - A Unique Initiative through CSC”, in New Delhi on July 11, 2017. The Secretary, Ministry of Electronics & Information Technology, Ajay Prakash Sawhney, the Director General and Mission Director, UIDAI, Ajay Bhushan Pandey and other dignitaries are also seen.

Ravi Shankar Prasad lighting the lamp to inaugurate the workshop on “Aadhaar Services – A Unique Initiative through CSC”, in New Delhi on July 11, 2017. The Secretary, Ministry of Electronics & Information Technology, Ajay Prakash Sawhney, the Director General and Mission Director, UIDAI, Ajay Bhushan Pandey and other dignitaries are also seen.

Prasad said, “I have great expectation from CSC VLEs. Our VLEs are change makers of India. CSCs have given employment to 10 lakh people in India. I am confident that in near future, one crore people will work in CSCs.” Recounting the strength of VLEs in mobilising citizens under Government campaigns, the Prasad further said: “I am happy to note that the VLEs have trained 2 crore people in the Cashless India movement.”  “Recently, Union Textile Minister Smt. Smriti Irani sought the support of VLEs in the expansion of handloom. All the departments of the government want to involve VLEs for their services,” he said.

He added, “Aadhaar is an effective instrument in removing corruption. We have saved Rs. 50,000 Crore by removing corruption.” He expressed the hope that the VLEs would rise to the occasion and help the government in making India corruption-free. He was addressing around 600 VLEs from States of Uttar Pradesh, Haryana, Rajasthan, Madhya Pradesh, Punjab, and Himachal Pradesh. The workshop, organised at the India Habitat Centre, New Delhi, also brought together senior officials from Ministry of Electronics & IT, UIDAI, Department of Fertilizers and Department of Food & Civil Supplies.

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