Now, all tax payers holding allotted Permanent Account Number or PAN should intimate their Aadhaar number to the income tax authorities for the purpose of linking both the numbers for filing Income Tax Returns (ITRs), the move of the Government came just a day after the Supreme Court upheld the law in this regard, putting a partial stay on its implementation till a Constitution Bench addressed the issue of Right to Privacy.
The Government on Saturday made it clear that the linking of the Aadhaar with PAN will be a must for filing ITRs and obtaining PAN from July 1. The Government’s I-T department, Central Board of Direct Taxes (CBDT), said the apex court’s order had only given a partial relief to those who do not have an Aadhaar or an Aadhaar enrolment ID, and the taxman, hence, will not cancel the PAN of such individuals.
The Board said it was issuing a three-point gist of the SC order and called it the ‘effect of the judgement’ in order to clear any doubts in the minds of taxpayers. “From July 1, 2017 onwards, every person eligible to obtain Aadhaar must quote their Aadhaar number or their Aadhaar enrolment ID number for filing of ITRs as well as for applications for PAN. Everyone who has been allotted PAN as on the first day of July, 2017, and who has Aadhaar number or is eligible to obtain Aadhaar number, shall intimate his Aadhaar number to income tax authorities for the purpose of linking PAN with Aadhaar,” the CBDT said.
It also explained what will happen in a case of 'non- compliance' or the instance where a person does not possess Aadhaar. “Only a partial relief by the court (SC) has been given to those who do not have Aadhaar and who do not wish to obtain Aadhaar for the time being, that their PAN will not be cancelled so that other consequences under the Income Tax Act for failing to quote PAN may not arise,” the CBDT said.
The CBDT also quoted relevant portions of the SC order to endorse its stand of Aadhaar-PAN linking and said the apex court in its landmark judgment has upheld Section 139AA of the Income Tax Act as constitutionally valid which required quoting of the Aadhaar number in applying for PAN as well as for filing of ITRs.
However, the CBDT quoted the SC order in this context, “Those who are not PAN holders, while applying for PAN, they are required to give Aadhaar number. This is the stipulation of sub-section (1) of Section 139AA, which we have already upheld. At the same time, as far as existing PAN holders are concerned, since the impugned provisions are yet to be considered on the touchstone of Article 21 of the Constitution, including on the debate around Right to Privacy and human dignity, etc. As limbs of Article 21, we are of the opinion that till the aforesaid aspect of Article 21 is decided by the Constitution Bench a partial stay of the aforesaid proviso is necessary.”
A senior I-T official, however, said the apex court’s order was studied by a high-level team from the Prime Ministers Office (PMO), the law Ministry, the Finance Ministry, the CBDT and the Income Tax Department after which the latest clarification has been issued.
The Government, under the Finance Act 2017, has made it mandatory for taxpayers to quote Aadhaar or enrolment ID of Aadhaar application form for filing of income tax returns (ITR). Also, Aadhaar has been made mandatory for applying for PAN with effect from July 1, 2017.
The department, till now, has linked over 1.16 crore Aadhaar numbers with its PAN database. While Aadhaar is issued by the UIDAI to a resident of India, PAN is a ten-digit alphanumeric number alloted in the by the I-T Department to a person, firm or entity.