The Supreme Court today pronounced its order on mandatory requirements of Aadhaar card for Income Tax Return (ITR). In its order, the apex court has stayed the central government order of linking Aadhaar with Personal Account Number (PAN). This order comes in the wake of the Income Tax Department stepping up its efforts to encourage people to link their PAN with Aadhaar. The effort to get as many people to ensure they create this linkage has been huge. Many taxpayers have received emails on how to do the PAN-Aadhaar linkage online, ads in newspapers have done the same and also through SMS. The apex court was hearing a raft of pleas contesting the validity of the Narendra Modi government’s move to make Aadhaar mandatory for procuring Permanent Account Number (PAN) card. The Centre had earlier made an amendment to the tax proposals in the Finance Bill of the Budget for 2017-18. The amendment has a provision which made Aadhaar mandatory for filing income tax returns and allotment of PAN.
The government has also wielded the stick. It had earlier issued an order to lower the limit on cash transaction from the previous limit of Rs 3 lakh to Rs 2 lakh. Centre had also made Aadhaar card a must for filing income tax returns.
On May 4, the apex court had reserved the verdict petitions challenging section 139AA of the Income Tax (I-T) Act. The Act was introduced in this year’s budget. A bench comprising Justices A K Sikri and Ashok Bhushan had reserved the decision. Meanwhile, earlier on April 21, the top Court had raised question over the Central government’s move.
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Notably, section 139AA of the Income Tax Act makes enrollment ID of Aadhaar application form mandatory for filing of income tax returns and making application for allotment of PAN (Permanent Account Number) with effect from July 1 this year.
The petitioners had challenged the Centre’s move citing that it cannot go against the top court’s order in 2015 in which it had held Aadhaar as voluntary. Their argument was that the government should not have enacted the section 139AA in the Act to make Aadhaar mandatory for PAN as the apex court had already made its stand clear.
On May 4, Attorney General Mukul Rohatgi who had appeared for the Central government, told a bench headed by Justice A K Sikri that they have found that people were giving details of PAN cards which have been procured on the basis of fake documents. Rohatgi said that there were instances that one person was having multiple PAN cards. They were using these fake cards to divert funds to shell companies.
The bench had then asked the Attorney General, “Is this the remedy that you need to have Aadhaar for having PAN? Why has it been made mandatory?” Responding to this, Rohatgi said that earlier too they have found people procuring SIM cards for mobile phones on fake identity cards and the apex court had asked the government to have a check on it.