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Binoy Biswam v. Union of India and Ors. (W.P No- 247 of 2017)

The Supreme Court on Friday upheld the newly inserted provision in the Income Tax Act mandating the linking of Aadhaar with Permanent Account Number (PAN) for filing of I-T returns, but it partially stayed its operation. A bench of judges A K Sikri and Ashok Bhushan said those who already possessed Aadhaar number would have to link it with PAN, but it could not be insisted upon in case of people not possessing Aadhaar. The bench held

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. Those who have already enrolled themselves under Aadhaar scheme would comply with the requirement of sub-section (2) of Section 139AA of the Act. Those who still want to enroll are free to do so. However, those assesses who are not Aadhaar card holders and do not comply with the provision of Section 139(2), their PAN cards be not treated as invalid for the time being. It is only to facilitate other transactions which are mentioned in Rule 114B of the Rules”

Issues that were before the Court

  • Whether 139AA is violative of Article 21?
  • Whether the Supreme Court is permitted to overrule its previous judgments where it has ordered Aadhaar being voluntary?
  • Does 139AA amount to compelled speech under Article 19(1)(a)?

The judgment stated that

Whether the Aadhaar violates the right of privacy and human dignity both of which are part of Article 21 of the Constitution, should be dealt by the constitutional bench and the Court deliberately refrained from entering the said arena.

Section 139AA of the Income Tax has passed the muster of Articles 14 and 19(1)(g) of the Constitution. However, more stringent test as to whether this statutory provision violates Article 21 or not is yet to be qualified. Therefore, the Court made it clear that Constitutional validity of this provision is upheld subject to the outcome of batch of petitions referred to the Constitution Bench where the said issue is to be examined.

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