The Challenge to S 139AA of the Income Tax Act In Reference AADHAAR

The Challenge to S 139AA of the Income Tax Act In Reference AADHAAR

Section 139 AA of the Income Tax Act has made quoting of Aadhaar mandatory in IT returns filed on or after 01.07.2017 and in PAN applications made on or after 01.07.2017. Furthermore, the existing PAN nos. would be invalidated if the same are not linked with Aadhaar by intimating the Aadhaar nos. to the IT authorities on or before a date to be announced by the Central Government. The net effect of the above is that all those who want to use PAN Card for any purpose including filing of IT returns will have to necessarily get an Aadhaar no.

The above provision has been challenged in the SC in WP (C) 247/17, 277/17 and 304/17, which were partly heard today. As per the information available on the internet, the challenge wrt infringement of privacy was not argued as the same would have tagged these matters with the other petitions on infringement of privacy vis-à-vis Aadhaar. So, the arguments followed mainly on two planks: colorable exercise of power to bypass earlier SC orders making Aadhaar non-mandatory and infringement of right to equality u/a 14 of the Indian Constitution.

I don’t want to jump into the troubled waters, so I won’t discuss the merits of the arguments as the matter is subjudice and the arguments will continue tomorrow as well. However, I do take as much risk as to propose that other than the arguments that have already been taken up today, another source of inequality is the ramification of S. 139AA on S. 139A and S. 139. The combined reading of the three sections makes it abundantly clear that not only tax payers but also many others including those who voluntarily wish to obtain PAN no. for whatever reasons can obtain PAN no. under the scheme of the act. But now by linking of PAN with Aadhaar, the government has discriminated against the rights of such individuals who though not paying tax would nevertheless wish to obtain PAN without obtaining Aadhaar. There is no rational nexus between black money generation and PAN no. of those who don’t earn taxable income because they just don’t earn enough money to generate any black money, but they are nevertheless sincere enough to obtain a PAN no. to represent themselves in the economic mainstream. By making linkage of Aadhaar and PAN mandatory, S 139 AA has actually nullified the beneficial effect of S. 139 and 139A, which was to bring the non-tax payers into the economic mainstream. This is a kind of reverse discrimination, which in fact neutralizes the objective of non-generation of black money. 

On another front, this is also a colorable exercise of power to target non-confirming individuals. To be very frank, I am willing to concede the argument that S. 139AA doesn’t make Aadhaar mandatory as only 1% of the population filed IT returns in 2013. But, at the same time, around 25 crores people hold PAN nos. The above statistics clearly show that PAN no. has graduated from just being a unique tax identification no. to a universal personal identification no., which fact is not lost to the government either. At the same time, Aadhaar has also more or less become a personal identification no., but there is a catch: Aadhaar has been promoted and executed through ignorant masses with a fradulent promise to the educated elite that they shall not be forced to obtain Aadhaar. I hate to call myself an elite, but the fact remains my educational qualification does make me an elite in the sense I understand the repercussion of Aadhaar on my individual liberty. Therefore, I and many like me have still not obtained Aadhaar. In fact, people like me now form a class unto themselves idenitifed as non-Aadhaar holders. And the non-Aadhaar holders are in a clear minority. The government by forcing the linkage of Aadhaar with PAN is actually discriminating against the class of non-Aadhaar holders, who are btw educated enough to decipher the colorable exercise of power by the government in the introduction of Aadhaar, which is mass surveilance and targeting of individuals esp. educated elites. 

Now coming to my specific problem. I wish to earn income not only from India but also from abroad, for which my educational qualification does provide me an opportunity to do so. I am satisfied earning only as much as is sufficient for my needs, which certainly doesn’t bring me into the tax paying bracket. But to earn foreign income through websites like PayPal, I have to necessarily disclose my PAN no. because the Indian Government has issued directives to PayPal to ensure the quoting of Pan no. for earning any foreign income through PayPal. I am sure the government doesn’t think all foreign income is black money. There might be umpteen such other examples where PAN no. may be necessarily required even if you don’t have any taxable income. S. 139AA is certainly an attack on the right to livelihood and the practice of profession in all such examples.

Legal arguments may continue but the fact remains that the government has an agenda of making Aadhaar mandatory, for which they are willing to go to any extent including challenging the validity of fundamental right of privacy itself. Unfortunately, this right has seemingly been suspended thanks to the judicial delays. Lawyers are finding roundabouts through grounds like colorable exercise of power and attack on equality to challenge the provision of law which is essentially a violation of right to privacy. Let us see which rabbit they bring out of their hat tommorow. And I hope they do so convincingly enough because S. 139AA needs to be struck off from the IT Act for sure.

About the Author

Ankur Mutreja
Ankur Mutreja is an advocate-cum-writer, and his blogs are amongst his modes of expression. He has also authored six books: "Kerala Hugged"; "Light: Philosophy"; "Flare: Opinions"; "Sparks: Satire and Reviews"; "Writings @ Ankur Mutreja"; and "Nine Poems"; which can be downloaded free from the links on the top menu.

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