SC says Aadhaar mandatory for filing of Income Tax Returns, But not to be applied retrospectively

In the most awaited judgment, Supreme Court upholds the validity of Section 139AA of Income Tax Act, 1961 which makes it mandatory to link Aadhaar card for the filing of Income Tax Returns. However, there will be no retrospective effect. Making it clear that it will be a mandate only for people who already have an Aadhaar Card.

The bench of Justice A. K. Sikri and Justice Ashok Bhushan has held that the Section 139AA will be partially operational subject to the final verdict on privacy issues and validity of Aadhaar which is pending before the Constitutional bench challenging.

A Clutch of petitions was filed challenging the constitutional validity of Section 139AA alleging that it is violative of Article 14 and 21 of the Constitution of India and “ illegal and arbitrary” . The counsel for the petitioner argued on the concept of “ informational self-determination” relying on German Constitutional Court to explain that an individual must have the right to determine which sort of information can be used. He has linked the arguments to right to dignity which is enshrined under Article 21 of the Constitution of India.

However, the Attorney General Mukul Rohatgi argued that there exists no absolute right to bodily integrity. He further submitted that the state is like the corporation and the people are it's members and there is no harm in using the collective might of the state to bring orderliness.

The court observed that the PAN (Permanent Account Number) could be faked or while Aadhaar is a “ secure and robust system” by which the identity of the individual could not be faked.

Therefore, everyone who is eligible to obtain Aadhaar number will be required to quote Aadhaar number in the application form for the allotment of PAN and in the return of income after the 1st day of July 2017. As per this judgment, PAN will not be invalidated if Aadhar is not linked to it till the verdict of the constitutional bench.