Supreme Court reserves verdict on linking Aadhar with PAN

New Delhi: The Supreme Court Thursday reserved its verdict on linking of Aadhaar with the PAN card, even as the court was told that it was a “draconian” provision and must go.

The bench of Justice A.K. Sikri and Justice Ashok Bhushan was hearing petitions challenging the constitutional validity of the newly-inserted Section 139AA in the Income Tax Act that makes linking of Aadhaar with PAN card mandatory.

As the bench was told that linking Aadhaar with PAN would have “extreme far reaching consequences not only for individuals but small business too”, the court enquired if the issue “was never debated or raised in the Parliament or referred to a parliamentary standing committee?”

Senior counsel Arvind Datar, appearing for senior Communist Party of India leader Binoy Visman, told the bench the government had “an agenda” to push Aadhaar and pointed to the “dichotomy” between Aadhaar Act 2016 that makes possessing Aadhaar optional and Section 139AA of the Income Tax Act that makes its linking with PAN compulsory.

“A right that is voluntary under Aadhaar Act can’t be made a penal provision under the Income Tax Act,” said Datar.

Besides Visman, former Major General of Indian army S.G. Vombatkere and convenor of Safai Karamchari Andolan Bezwada Wilson have also challenged the validity of Section 139AA.

As Datar said the provision under challenge would affect nearly 2.8 crore individual assesses, the bench observed: “If it can’t cover companies that does not mean that we should not do it with individuals. If they (government) want to do something, a beginning has to be made somewhere.”

Hammering the point that Aadhaar was voluntary under the Aadhaar Act and could not be made mandatory under the Income Tax Act, Datar said the government was “slowly, step by step making it compulsory by linking it with various things. Is it not a contempt of court?”

The senior counsel was referring to two earlier orders of the top court which said that government could insist upon Aadhaar only for distribution of foodgrains, and LPG and other cooking fuel. Later this was expanded to include other schemes like MNREGA, old age pension scheme, Provident Fund and Prime Minister’s Jan Dhan Yojana.

As Datar tried to impress upon the bench that Aadhaar could not be made compulsory through other statutory routes, Justice Sikri in a lighter observation said: “They say if you don’t give Aadhaar, you are not entitled to benefits under social welfare schemes. Why don’t they say if you don’t give Aadhaar you are not entitled to pay taxes?”

Pointing to the “dangerous trend”, Datar said a provision has been made that says that tax authorities need not give any reason for conducting searches and “all the searches conducted since 1962 are valid”.

He told the bench that soon the Ministry of Corporate Affairs is going to ask all the company secretaries, chartered accountants, DIN (Direct Identification Number) holders, Directors, key managerial personnel, professionals and others to integrate their Aadhaar number with MCA21 portal for availing services.

Datar said he did not think that linking Aadhaar with Permanent Account Number (PAN) would curb black money. In a poser, he asked “Have you done a study before you (government) took the monumental decision of linking Aadhaar with PAN?”