PAN Current Affairs - 2019
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The Supreme Court has upheld the section 139AA of the Income Tax Act and said that linking of PAN with Aadhaar is mandatory for the filing of Income Tax returns.
The Supreme Court made these observations while hearing an appeal filed by the Centre against a Delhi High Court order allowing two people, Shreya Sen and Jayshree Satpute, to file Income Tax returns for 2018-19 without linking their Aadhaar and PAN numbers.
Noting that with regard to Assessment Year 2018-19 the two petitioners had filed the Income Tax returns in terms of the orders of the High Court and the assessment has also been completed, Supreme Court said that for the assessment year 2019-20, the income tax return shall be filed in terms of the judgment passed by this court.
Section 139AA of the Income-tax Act
Section 139AA of the Income-Tax Act 1961 was introduced by the Finance Act, 2017. The section makes it mandatory to quote Aadhaar / Enrolment ID of Aadhaar application form, for the filing of return of income as well as in the application form to enrol for PAN.
The section also specifies that those already in possession of the PAN numbers must mandatorily link their PAN numbers with Aadhaar. Failure to do so would result in PAN number becoming invalid.
The Supreme Court has upheld the government’s decision and ruled that it would be mandatory for all Aadhaar holders to link it with the permanent account number (PAN) for filing of income tax returns.
However, in a partial setback to the government, the apex court refused to make it compulsory for those people who do not possess an Aadhaar card or have not yet applied for one. The Court stayed the retrospective invalidation of PAN for non-compliance till a Constitutional Bench decides on the privacy question pending before it. As a result, a person who do not possess Aadhaar card will not face criminal consequences for not linking Aadhaar card with PAN card.
The Supreme Court also upheld the legislative competence of Parliament in enacting the law to this effect. However, it has stated that it has not touched upon the issue of Right to Privacy and other aspects which will be decided by the Constitution bench.
Government had made linking of Aadhaar card with PAN card mandatory for filing of Income Tax returns as it would help to weed out fake and fraudulent financial accounts.
According to the Aadhaar (Targeted Delivery of Financial Subsidies, Benefits and Services) Act, 2016, the Aadhaar number is mandatory only for receiving social welfare benefits. But as per the provisions of the Finance Act 2017, the Aadhaar number/Aadhaar enrolment number is mandatory to file income tax returns and to apply for a new PAN. The government will declare the existing PAN to be void if the taxpayer fails to link it with Aadhaar by July 31, 2017.
In 2015, a three-judge bench had referred the issue of Right to Privacy and other aspects to a larger constitution bench, which is yet to be constituted.