Validity of Aadhar Link with PAN Card: Binoy Visman v. Union of India

AUTHOR- Sakshi Kashyap, Faculty of Law, Delhi University.

1. FACTS

i) Every person who is eligible to obtain Aadhaar number shall, quote Aadhaar number in the application form for allotment of permanent account number and in the return of income.

ii) In case of failure to intimate the Aadhaar number, the permanent account number allotted to the person shall be deemed to be invalid

iii) Communist Party of India (CPI) leader Binoy Visman has challenged the validity of Section 139AA of Income Tax Act.

2. ISSUE

i) Whether there is any Right to Privacy guaranteed under the Constitution.

ii) Whether Collection of biometric data is violative of the Right to Privacy.

3. RULES

i) Finance Act, 2017

ii) Income Tax Act, 1961: 139AA.

iii) Aadhar Act: Section 3, Section 7, Section 28, Section 29 and Section 30.

iv) Constitution of India, 1949: Article 14, Article 19(1)(g), Article20(1), Article 21.

v) Income Tax Rules, 1962: Rule 114B.

4. ANALYSIS

i) “Section 139AA of the Act reads (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.

(3) The provisions of this section shall not apply to such person or class or classes of persons or any State or part of any State, as may be notified by the Central Government in this behalf, in the Official Gazette.

Section 139AA(2) of the Act stipulates the consequences of failure to intimate the Aadhaar number. In those cases, PAN allotted to such persons would become invalid.”

INTRIM ORDER:

“no person should suffer for not getting the Aadhaar card inspite of the fact that some authority had issued a circular making it mandatory and when any person applies to get the Aadhaar card voluntarily, it may be checked whether that person is entitled for it under the law and it should not be given to any illegal immigrant. It was submitted by Shri Shyam Divan, learned counsel for the petitioners that the petitioners having pointed out a serious breach of privacy in their submissions, preceding the reference, this Court may grant an injunction restraining the authorities from proceeding further in the matter of obtaining biometrics etc. for an Aadhaar card. Shri Shyam Divan submitted that the biometric information of an individual can be circulated to other authorities or corporate bodies which, in turn can be used by them for commercial exploitation and, therefore, must be stopped.”

As per Respondent the introduction of Section 139AA of the Act was introduced to tackle the following problems: -

1. Multiple PAN cards to same individuals and PAN cards in the name of fictitious individuals.

2. Lakh bogus bank and DEMAT accounts were opened through use of PANs.

3. Unscrupulous operators managed multiple PANs for providing entries and operating undisclosed accounts for making financial transactions.

4. Entry operators manage a large number of shell companies using duplicate PANs.

5. Multiple PANs acquired by a single entity by dubious means.

6. To tackle the problem of black money.

7. Curb the menace of shell companies.

8. Widening of tax base.

Whereas, Aadhaar has led to weeding out duplicate & fakes in many welfare programmes such as PDS, MNREGS, LPG Pahal, Old Age pension, scholarships etc. during the last two years and it has led to savings of approximately Rs.49,000 crores to the exchequer.

Whereas, various orders and judgments of this Court whereunder use of Aadhaar was endorsed, encouraged or even directed. Following instances are cited:

i. The importance and utility of Aadhaar for delivery of public services like PDS, curbing bogus admissions in schools and verification of mobile number subscribers has not only been upheld but endorsed and recommended by this Court.

ii. PUCL v. Union of India recommended linking of Aadhaar with PDS and encouraged State Governments to adopt the same.

iii. State of Kerala & others vs. President, parents Teachers Association, SNVUP and Others 29 has directed use of Aadhaar for checking bogus admissions in schools.

iv. Union for Civil Liberties v. Union of India & Ors, endorsed bio-metric identification of homeless persons so that the benefits like supply of food and kerosene oil available to persons who are below poverty line can be extended to the correct beneficiaries.

v. Lokniti Foundation v. Union of India, the Aadhaar based verification of existing and new mobile number subscribers and upon being satisfied that an effective process has been evolved to ensure identity verification.

Whereas as mentioned in Section 7 of the Aadhaar Act which states that proof of Aadhaar number is necessary for receipt of such subsidies, benefits and services. At the same time, it cannot be disputed that once a person enrols himself and obtains Aadhaar number as mentioned in Section 3 of the Aadhaar Act, such Aadhaar number can be used for many other purposes.

Whereas, there is no provision in Aadhaar Act which makes enrolment compulsory. Thus, enrolment under Aadhaar is voluntary. But, by the way of an interim measure till Aadhaar number is assigned, which is otherwise compulsory for obtaining certain benefits as stated in Section 7 of the Aadhaar Act.

However, for the purposes of Income Tax Act, Section 139AA makes it compulsory for the assesses to give Aadhaar number which means insofar as income tax assessees are concerned, they have to necessarily enrol themselves under the Aadhaar Act and obtain Aadhaar number which will be their identification number as that has become the requirement under the Income Tax Act. The contention that since enrolment under Aadhaar Act is voluntary, it cannot be compulsory under the Income Tax Act, cannot be countenanced.

In view of the above, two enactments would clearly suggests that whereas enrolment of Aadhaar is voluntary when it comes to taking benefits of various welfare schemes even if it is presumed that requirement of Section 7 of Aadhaar Act that it is necessary to provide Aadhaar number to avail the benefits of schemes and services, it is up to a person to avail those benefits.

Whereas, the PAN number has to be mentioned/quoted in number of eventualities specified under sub-section (5), (5A), (5B), (5C), 5(D) and sub-section (6) of Section 139A. Chapter XVIIB, (2C) of section 192, section 203, section 206, section 206C, Rule 114B of the Rules lists.

According to the petitioners, it amounts to violating their fundamental right to carry on business/profession etc. Article 19(1)(g) of the Constitution which stands infringed and, therefore, it was for the State to show that the restriction is reasonable and in the interest of pubic under Article 19(6) of the Constitution. It is in this context; principle of proportionality has been invoked by the petitioners with their submission that restriction is unreasonable as it is utterly disproportionate for committing breach of Section 139AA of the Act.

However, held that it was within the competence of the Parliament to make a provision of this nature and further that it is not offensive of Article 14 and Article 19(1)(g) of the Constitution.

Therefore, the PAN is issued under the provisions of the Act (Section 139A), its function is not limited to giving this number in the income-tax returns or for other acts to be performed under the Act, as mentioned in sub-sections (5), (5A), (5B), 5(C), 5(D) and 6 of Section 139A. Rule 114B of the Rules mandates quoting of this PAN in various other documents pertaining to different kinds of transactions listed therein.

ii) The Right to Privacy as part of Article 21 of the Constitution.

In M.P. Sharma and Kharak Singh, the fundamental rights guaranteed under the Constitution of India and more particularly right to liberty under Article 21 would be denuded of vigour and vitality. At the same time, we are also of the opinion that the institutional integrity and judicial discipline require that pronouncement made by larger Benches of this Court cannot be ignored by the smaller Benches without appropriately explaining the reasons for not following the pronouncements made by such larger Benches.

Justice K.S. Puttuswamy, a former Judge of the Karnataka High Court before this Court, challenging the UID scheme stating therein that the same does not have any statutory basis and it violated the Right to Privacy, which is a facet of Article 21 of the Constitution.

1. This order was challenged by Writ Petition by filing Special Leave Petition, in which orders were passed by this Court restraining the UIDAI from transferring any biometric information to any agency without the written consent of the concerned individual.

One of the main grounds of attack on Aadhaar Card scheme was that the very collection of biometric data is violative of the Right to Privacy, which, in turn, violated not only Article 21 of the Constitution of India but other Articles embodying the fundamental rights guaranteed.

The right to privacy is implicit in the right to life and liberty guaranteed to the citizens of this country by Article 21. It is a right to be let alone. A citizen has a right to safeguard the privacy of his own, his family, marriage, procreation, motherhood, child-bearing and education among other matters. None can publish anything concerning the above matters without his consent whether truthful or otherwise and whether laudatory or critical. If he does so, he would be violating the right to privacy of the person concerned and would be liable in an action for damages. Position may, however, be different, if a person voluntarily thrusts himself into controversy or voluntarily invites or raises a controversy.

iii) ARTICLE 14

Principle of equality as a fundamental right mandate that the State shall not deny to any person equality before the law or the equal protection of the laws within the territory of India. It, thus, gives the right to equal.

Thus, Article 14 in its ambit and sweep involves two facets, viz., it permits reasonable classification which is founded on intelligible differentia and accommodates the practical needs of the society and the differential must have a rational relation to the objects sought to be achieved. Further, it does not allow any kind of arbitrariness and ensures fairness and equality of treatment.

Differential treatment does not per se amount to violation of Article 14 of the Constitution and it violates Article 14 only when there is no reasonable basis and there are several tests to decide whether a classification is reasonable or not and one of the tests will be as to whether it is conducive to the functioning of modern society treatment in similar circumstances, both in privileges conferred and in the liabilities imposed.

In Sri Srinavasa Theatre v. Government of Tamil Nadu:

The Court explained that the two expressions equality before law and equal protection of law do not mean the same thing even if there may be much in common between them. Equality before law is a dynamic concept having many facets. One facet is that there shall be no privileged person or class and that one shall be above law. Another facet is the obligation upon the State to bring about, through the machinery of law, a more equal society... For, equality before law can be predicated meaningfully only in an equal society.... The Court further observed that Article 14 prescribes equality before law. But the fact remains that all persons are not equal by nature, attainment or circumstances, and, therefore, a mechanical equality before the law may result in injustice. Thus, the guarantee against the denial of equal protection of the law does not mean that identically the same rules of law should be made applicable to all persons in spite of difference in circumstances or conditions.

5. CONCUSION

i) Firstly, Section 139AA of the Income Tax Act is not violative of Articles 14 and 19(1)(g) of the Constitution. Whereas, it is not discriminatory nor it offends equality.

ii) Secondly, Proviso to Section 139AA(2) cannot be read retrospectively.