Those who have an Aadhaar number already will still have to seed it with PAN when filing the IT returns, but the government cannot force those who don’t have an Aadhaar card as yet, to get one to file their tax returns if they have a PAN.
The Supreme Court upheld the newly-inserted provision in the Income Tax Act mandating linking of the Aadhaar number with the Permanent Account Number (PAN), but partially blocked its operation.
Those who have already applied for Aadhaar number but are yet to receive it would suffer no adverse consequences and their PAN cards would not be invalidated as this would have “serious consequences”.
Section 139AA of the Income Tax Act, incorporated by way of the Finance Act 2017-2018, provides for the invalidisation of PAN if it is not linked to Aadhaar number.
The bench made it clear that there was no conflict between the impugned provisions of the Income Tax Act and the Aadhaar Act.
It also said that PAN cards without Aadhaar number would not be treated invalid till the Constitution bench decided the larger issue of right to privacy.
It said previous transactions would not be affected or nullified with partial stay on the new law till privacy issue linked to Aadhaar was decided.
The court had on May 4 reserved the verdict on a batch of petitions challenging section 139AA of the I-T Act, which was introduced through the latest budget and the Finance Act, 2017.
Section 139AA of the Income Tax Act provides for mandatory quoting of Aadhaar or enrolment ID of Aadhaar application form for filing of income tax returns and making application for allotment of PAN with effect from July 1 this year.
