Delhi HC directs CBDT to allow IT assessees to ‘opt out’ from Aadhaar-PAN linkage

In a significant ruling, the Delhi High Court yesterday directed the Central Board of Direct Taxes (CBDT) to allow those filing Income Tax (IT) returns to ‘opt out’ from “mandatory” Aadhaar registration and linkage with PAN..The Bench of Justices Ravindra Bhat and AK Chawla passed the order in a petition filed by Advocates Shreya Sen and Jayshree Satpute. The petitioners were represented by Advocate Tripti Poddar..The lawyers, who are part of legal empowerment organization Nazdeek, had submitted that they were not able to file their IT returns online, as they did not have Aadhaar numbers..The Delhi High Court was moved and asked to take up the matter with urgency, given the fact that the last date for filing of IT returns without penalty is July 31..The petition points out that the challenge to the Constitutional validity of the Aadhaar scheme was pending before the Supreme Court, which had reserved its judgment in Justice KS Puttaswamy (Retd.) vs. Union of India..The vires of Section 139AA of the Income Tax Act, which mandates Aadhaar for filing IT returns, was challenged in the Apex Court in the Binoy Viswam case. In that case, it was held that Section 139AA may be upheld subject to the decision of the larger Bench of the Supreme Court in Puttaswamy..“Therefore, the Hon’ble Court stayed the consequences of non-compliance with Sec. 139AA, for individuals who do not already have an Aadhaar Card, or who have not already enrolled for obtaining one, pending adjudication by the larger bench…”.Pursuant to the orders of the Supreme Court, the CBDT had issued a notification extending the linkage of Aadhaar with PAN number to March 31, 2019..“The Respondents, by not providing an opt-out option, while awaiting the final judgement of the Hon’ble Supreme Court of India in the Puttuswamy case, are therefore in violation of rights protected under Articles 14 and 21 of the Constitution, of the Petitioners herein.”.It is also pointed out that the Supreme Court and various High Courts had allowed individual petitioners to file their returns without Aadhaar. The most recent example of these rulings is the Madras High Court, which allowed nine petitioners to do so..Reference was also made to the case of Mukul Talwar v. Union of India, in which the Delhi High Court had allowed the petitioners to file their returns without quoting Aadhaar..Therefore, it was prayed that the High Court direct the Income Tax department to allow online filing of IT returns without asking for Aadhaar numbers of the petitioners..The High Court in the present case saw it fit to grant similar relief as granted in the Mukul Talwar case, ordering that the petitioners be allowed to file their returns online without linkage of Aadhaar with PAN or proof of Aadhaar enrolment..It was also pointed out by the petitioners that Income Tax authorities had sent emails stating that despite the CBDT notification extending the date for Aadhaar-PAN linkage, individuals like the petitioners would have to approach the courts to get relief..In view of this, the Court directed the CBDT to alter the online portal for filing returns in tune with its notification. To this end, the CBDT has been directed to issue another notification and to amend the digital form for filing returns – at least till March 31, 2019 – to enable individuals to ‘opt out’ from the “mandatory” Aadhaar-PAN linkage..“This court is of the opinion that at least for the period till 31.03.2019, the CBDT shall issue an appropriate direction, and also create a platform by amending the digital form of substituting them properly to enable “opt out” from the mandatory requirement of having to furnish Aadhar registration or Aadhar linkage, for the duration, the exemption subsists, i.e till 31.03.2019.”.With this direction, the Court disposed of the petition..Read the order:.Read the petition: