CBDT confirms Aadhaar requirement for filing Income Tax returns

In the wake of the Supreme Court's judgement on implementing Section 139AA of the Income Tax Act, the Central Board of Direct Taxes (CBDT) clarified that from July 1 onwards, every person eligible to obtain Aadhaar must quote their Aadhaar number or their Aadhaar enrolment ID number for filing of Income Tax returns, as well as for applications for their Permanent Account Number (PAN).

Furthermore, everyone who has been allotted a PAN number and Aadhaar number or is eligible to obtain the same as of the aforementioned date, shall intimate his Aadhaar number to the income tax authorities for the purpose of linking PAN with Aadhaar.

However, for non-compliance of the above point, only a partial relief by the court 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.

In a landmark judgement, the apex court 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 income tax returns.

"A person who is holder of PAN and if his PAN is invalidated, he is bound to suffer immensely in his day to day dealings, which situation should be avoided till the Constitution Bench authoritatively determines the argument of Article 21 of the Constitution. Since we are adopting this course of action, in the interregnum, it would be permissible for the Parliament to consider as to whether there is a need to tone down the effect of the said proviso by limiting the consequences," the judgement read.

The Court also held that the "Parliament was fully competent to enact Section 139AA of the Act and its authority to make this law was not diluted by the orders of this Court." Therefore, no violation of the earlier Supreme Court orders was found in enacting the provision.

The Court has also held that Section 139AA of the Act is neither discriminatory nor offends the equality clause enshrined in Article 14 of the Constitution.