The Constitutional Position Of Aadhaar
The “Constitutional Position” regarding Aadhaar is aptly described by Praveen Dalal as follows:
“Government made Aadhaar Optionally Compulsory Whereas Supreme Court made Aadhaar Compulsorily Optional”.
So Aadhaar is absolutely optional for Government and Private services and purposes. Refuse enrollment and seeding of Aadhaar with everything. Block the biometric and deseed Aadhaar from all services with whom you have seeded your Aadhaar.
We have also clarified that even if the e-filing of returns is not operational due to any technical glitch or other reasons, you can file your tax return offline through a registered post.
Update 2: Perry4Law Organisation’s (P4LO) stand has been confirmed by Indian Government once again. Tax returns can now be filed without Aadhaar in both e-filing and offline modes. Income Tax Department would remove the technical glitch that is preventing people not having Aadhaar from filing their returns through e-filing method.
True And Correct Interpretation Of Supreme Court Judgment On Section 139AA
In an expected move, a division bench of Supreme Court stayed mandatory linking of Aadhaar with permanent account number (PAN) till the Constitution Bench of Supreme Court decides about constitutionality of Aadhaar. As on date Aadhaar is subject to constitutional attack for being violative of various Fundamental Rights, including right to Privacy. Aadhaar has become a constitutional anomaly and as such the Supreme Court cannot leave the issue unresolved by citing any fictitious ground of Fait Accompli. So sooner or later, the Constitution Bench of Supreme Court has to take the call on the constitutional validity of Aadhaar.
On October 15, 2015, a Constitution Bench of Supreme Court held (pdf) as follows (page 12, para 4 and 5):
“4. We impress upon the Union of India that it shall strictly follow all the earlier orders passed by this Court commencing from 23.09.2013.
5. We will also make it clear that the Aadhaar card Scheme is purely voluntary and it cannot be made mandatory till the matter is finally decided by this Court one way or the other”.
We at Perry4Law Organisation (P4LO) wish to inform public at large that this position has remained unchanged and the constitutional position regarding Aadhaar is that Aadhaar is optional till the month of June 2017 and till the writing of this article i.e. 11-06-2017. Neither the Aadhaar Act, 2016 nor the Finance Act has made any difference to this settled constitutional position. This is also clear from the judgment of Supreme Court regarding Section 139AA that is also subject to the final decision of the Constitution Bench of Supreme Court.
Section 139AA(1) proposed to make citing of Aadhaar number mandatory for filing tax returns and for issuance of new PAN card after 01-07-2017. Proviso to Section 139AA (2) provides the penal consequences of not giving Aadhaar number within the stipulated time by an existing PAN holder if asked by a notified agency. Proviso to Section 139AA (2) is also the only penal provision for failure to comply with the requirements of Section 139AA (1) and Section 139AA (2).
This penal provision has been stayed by Supreme Court till the matter is decided by the Constitution Bench of Supreme Court as this penal provision has to be tested on the touchstone of Article 21 and other Fundamental Rights as well. PAN of an individual, whether Aadhaar number holder or not, cannot be cancelled by Indian government till the matter is finally adjudicated by the Constitution Bench of Supreme Court after analysing the constitutional validity of both Aadhaar and Aadhaar Act, 2016. This would also involve testing Aadhaar and Aadhaar Act, 2016 on the touchstone of Fundamental Rights, including Article 21, which has not been discussed by the Supreme Court in Section 139AA case. Similarly, the Constitution Bench would also analyse infringement of other Fundamental Rights and Constitutional Rights by Aadhaar and Aadhaar Act, 2016, including constitutional provisions pertaining to Money Bills. Till that is done, the existing interim order of Constitution Bench of Supreme Court (pdf) would govern the position i.e. Aadhaar is optional for all purposes and all services whether government, private, welfare, non-welfare, etc. No government department or private company or individual can ask for Aadhaar for any service or purpose. If asked, people are free to reject that demand. They can meet any procedural or legal requirement with alternative government documents like driving license, passport, PAN card, voter ID, etc as Aadhaar is absolutely optional as on date.
As per our “Constitutional Scheme”, a division bench of Supreme Court can never overrule what has already been ordered by a Constitution Bench. The Constitution Bench has clearly mentioned that the Aadhaar card Scheme is purely voluntary and it cannot be made mandatory till the matter is finally decided by this Court one way or the other. So whether on the Judicial side or the Legislative side, Section 139AA cannot make Aadhaar mandatory for filing returns, PAN applications, mentioning to the notified agency or any other taxation or non taxation related issue as specified by government or its departments. Any contrary decision by a division bench, including the one that heard Section 139AA petition, is simply Per Incuriam. This is the reason why Supreme Court in Section 139AA petition stayed the proviso and read down Section 139AA. This practically made Aadhaar optional for all purposes including for filing returns and obtaining a PAN card.
Once the constitutional position that Aadhaar is optional till decided by the Constitution Bench becomes clear, there is nothing to discuss further. But for the sake of further clarity, let us discuss few more things. If we read Section 139AA carefully, it is clear that Section 139AA at large is not making Aadhaar mandatory for filing of return or obtaining a PAN card. For instance, if a person files a return on or before 30-06-2017, there is no need for citing an Aadhaar number. Similarly, if a person makes an application for PAN card on or before 30-06-2017, again there is no need for citing an Aadhaar number. The requirement for Aadhaar, if at all required, arises only on and after 01-07-2017. So those looking for filing a return or getting a PAN card can do so on or before 30-06-2017.
An interesting issue has also missed the attention of almost all people. Supreme Court has given a strong protection to “Existing PAN Cards” under Section 139AA (2). All PAN cards are existing PAN cards if they have been issued before 01-07-2017. So all those who are interested in obtaining a PAN card must apply or obtain the same on or before 30-06-2017. This way their PANs would become existing PANs under Section 139AA and would be saved from the penal provisions of proviso to Section 139AA (2) that has been stayed by Supreme Court.
There is another curious angle of Section 139AA and its legality. Section 139AA is a standalone provision that is in active violation of Aadhaar Act, 2016. Supreme Court tried to harmoniously construe this inconsistency by saying that Aadhaar Act, 2016 and Section 139AA operate in different fields. However, this makes Section 139AA very “ambiguous and unreliable”. A provision with no clarity and background is asking for submission of Aadhaar number for filing of returns and making an application for PAN card after 01-07-2017. If we analyse Section 139AA on its own, clearly it has no legs to stand on. So we have to interpret Section 139AA by just referring to Section 139AA alone and not the Aadhaar Act, 2016. Let us interpret Section 139AA in this background.
Let us reproduce Section 139AA (1) and (2) here. Section 139AA of the Act reads as under:
“Quoting of Aadhaar number. – (1) Every person who is eligible to obtain Aadhaar number shall, on or after the 1st day of July, 2017, quote Aadhaar number–
(i) In the application form for allotment of permanent account number;
(ii) In the return of income:
Provided that where the person does not possess the Aadhaar Number, the Enrolment ID of Aadhaar application form issued to him at the time of enrolment shall be quoted in the application for permanent account number or, as the case may be, in the return of income furnished by him.
(2) Every person who has been allotted permanent account number as on the 1st day of July, 2017, and who is eligible to obtain Aadhaar number, shall intimate his Aadhaar number to such authority in such form and manner as may be prescribed, on or before a date to be notified by the Central Government in the Official Gazette:
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.
A cursory look at Section 139AA would reveal that it is simply asking a person “eligible” to get Aadhaar to get the same before a “stipulated date” i.e. 01-07-2017. So till both elements of “eligibility and stipulated date” are not merged, Section 139AA (1) cannot apply.
Now eligibility of something is a positive concept whereas forced Aadhaar is a negative one. So the choice and option is inherent for all who are eligible to get Aadhaar and they may enroll for Aadhaar or they may not. Government cannot force any individual to get Aadhaar compulsorily especially when the Constitution Bench of Supreme Court has made it absolutely optional.
Let us give two examples in this regard. A person of 18 years of age is eligible to vote. Similarly, a person of 21 years of age is eligible to marry. Does it mean he/she has to compulsorily vote and marry? So eligibility is a right and enabling provision and interpreting it as an obligation that violates Fundamental Rights is incorrect and unacceptable.
So going by the very language of Section 139AA (1), but without approving its constitutional validity, it is clear that only person eligible to get Aadhaar are required to comply with Section 139AA and those who are ineligible, whether due to choice or operation of law, are not required to furnish the Aadhaar. This is natural as well as a person who is neither interested nor entitled to get Aadhaar cannot quote the same. So the word eligible in Section 139AA (1) cannot be construed as compulsory and it is for the people to decide whether they wish to apply for Aadhaar or not.
So section 139AA (1) is not applicable to those who have decided not to enroll for Aadhaar as they have no Aadhaar number to be quoted while furnishing a tax return or while applying for a PAN card.
But what about those who have already enrolled for Aadhaar? The good news is that even they are not required to comply with the requirements of Section 139AA (1) due to the constitutional position mandating that Aadhaar is optional till decided by the Constitution Bench as discussed above.
Now let us analyse Section 139AA (2).
Again Section 139AA (2) is not applicable to those who have decided not to enroll for Aadhaar as they have no Aadhaar number to be intimated to concerned authority. As the proviso has been stayed by Supreme Court, even their PAN cannot be cancelled.
So what is the legal position of Section 139AA (2) for those who have already enrolled for Aadhaar? Again even they are not required to comply with the requirements of Section 139AA (2) due to the constitutional position mandating that Aadhaar is optional till decided by the Constitution Bench as discussed above. In addition, even their “existing PAN” cannot be cancelled by government due to embargo put by Supreme Court.
Let us now sum up the position after the judgment of Supreme Court on Section 139AA. This is as follows:
(1) Aadhaar and its uses are absolutely optional (pdf) for all purposes till the matter is finally decided by the Constitution Bench of Supreme Court.
(2) Neither Section 139AA nor the judgment of Supreme Court empowers government to make Aadhaar mandatory for filing of return, making an application for PAN or any other tax issue.
(3) Those not having Aadhaar can safely ignore Section 139AA and its implications in totality.
(4) Those having Aadhaar have absolute option to comply with requirements of Section 139AA as the interim order of Constitution Bench of Supreme Court making Aadhaar optional protects them.
(5) Section 139AA judgment of Supreme Court is given by a division bench that is subject to the final decision of the Constitution Bench. The decision of Constitution Bench would be final for all purposes, including for Section 139AA.
(6) Section 139AA judgment has not considered violation of Article 21 and other Fundamental Rights/Constitutional Rights by Aadhaar and Aadhaar Act, 2016. They can be agitated again for Section 139AA purposes even now.
(7) No penal action can be taken against any person, whether he has Aadhaar or not, for not giving his/her Aadhaar number while filing a tax return, making an application for new PAN or for any other taxation or non taxation matter.
(8) A tax return filed without an Aadhaar number cannot be rejected or otherwise mishandled by government and tax department. If any such rejection or mishandling is done, people can sue the government and tax department for that.