Madras HC does U-turn on Aadhaar for filing IT returns [Read order]

A week after it allowed a petitioner to file Income Tax returns without quoting her Aadhaar number , the Madras High Court has now dismissed a similar petition.

. Justice TS Sivagnanam , who passed the order last week, appears to have had a change of heart as regards the Supreme Court’s stance on the requirement of Aadhaar for filing IT returns.

. In its judgment in Binoy Viswam v. Union of India , the Supreme Court had ordered a partial stay on the provisio to Section 139AA (2) of the Income Tax Act, which states,

. “Provided that in case of failure to intimate the Aadhaar number, the permanent account number allotted to the person shall be deemed to be invalid and the other provisions of this Act shall apply, as if the person had not applied for allotment of permanent account number.”

. In effect, the Court held that failure to link Permanent Account Numbers (PANs) with Aadhaar would not result in the former being declared invalid.

. It was on the basis of this apex court direction that Justice Sivagnanam last week passed an interim order allowing the petitioner to file her IT returns without Aadhaar. However, yesterday, the judge performed a volte face on the issue while dealing with a similar petition.

. The reason? One sentence in the Binoy Viswam judgment that presumably went unnoticed.

. Para 125 of that judgment reads,

. “…However, those assessees 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 ….”

. Rule 114B of the Income Tax Rules mandates the quoting of PAN number for a multitude of transactions. And according to Justice Sivagnanam, the partial stay envisioned by the Supreme Court was limited to transactions under Rule 114B.

. Yesterday’s order states,

. “On a reading of the above quoted paragraphs in the decision in the case of Binoy Viswam, it would clearly show that the Hon’ble Supreme Court has not stayed the Proviso to Sub-Section (2) of Section 139AA of the Act and the partial stay would be applicable only to facilitate the other transactions, which are mentioned in Rule 114B of the Rules, which pertains to transactions, in relation to which, PAN is to be quoted in all documents…

. …Therefore, to state that the partial stay granted by the Hon’ble Supreme Court would enure to the benefit of the petitioner even for filing income tax returns is a plea, which is not sustainable and is liable to be rejected.”

. The Court, therefore, dismissed the petition, in effect contradicting its earlier order passed on the topic.

. The issue of linking PAN with Aadhaar has assumed new significance in light of a fresh challenge to Section 139AA filed by Binoy Viswam in the Supreme Court. Perhaps more clarity on the issue will emanate once the Supreme Court decides this new challenge.

. Read the order:

Madras HC does U-turn on Aadhaar for filing IT returns [Read order]

Aditya AK

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