The Supreme Court, on Monday, reversed the Delhi High Court order allowing the taxpayer to file an income tax return without linking PAN with Aadhaar and the rule must be compulsorily followed from the assessment year 2019-20.
The High Court vide impugned order dated 24.2.2018 had permitted the respondents, Shreya Sen to file the Income Tax Return for the Assessment Year 2018-19 without linkage of their Aadhar and PAN numbers and it was also directed that the Income Tax Department would not insist on production of their number of Aadhar enrollment.
Allowing an appeal filed by the department against the order, Justice A K Sikri and Justice Abdul Nazeer observed that “The aforesaid order was passed by the High Court having regard to the fact that the matter was pending consideration in this Court. Thereafter, this Court has decided the matter and upheld the vires of section 139AA of the Income Tax Act. In view thereof, linkage of PAN with Aadhar is mandatory.”
“Insofar as the assessment year 2018-19 is concerned, learned counsel appearing for the respondents informs that the respondents had filed the income tax returns in terms of the orders of the High Court and the assessment has also been completed. We, therefore, make it clear that for the assessment year 2019-20, the income tax return shall be filed in terms of the judgment passed by this Court,” the bench said.
The Finance Act, 2017 inserted Section 139AA to the Income Tax Act mandating quoting of Aadhaar or enrolment ID of Aadhaar application form for filing of income tax returns and making application for allotment of PAN (Permanent Account Number) with effect from July 1 2017. Non-compliance with the above provision would render the PAN of the defaulting individual invalid, attracting penalty proceedings under the Income Tax Rules.
In 2017, 1 two-judge bench had upheld the constitutional validity of the said provision. Thereafter, many High Courts including the Delhi, Bombay, Madras, and Kerala had permitted individual assessees who could not link their aadhaar with the PAN to file returns manually without fulfilling the conditions.
Last year also, the Supreme Court clarified that the PAN-aadhaar linkage is mandatory.
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