Author Name:   RUTH DIYA C

The first judgement to be laid down under the Aadhaar card project.

Right to Privacy Violated- Aadhaar Card

A few days ago the Supreme Court delivered its first verdict in a series of legal challenges against the Aadhaar project. In the present matter, the court was examining whether a provision of the Finance Act, 2017 that makes Aadhaar mandatory for filing of income tax returns and applying for Permanent Account Number (PAN) cards was constitutionally valid. The court has upheld the validity of this provision, subject to a few qualifications.

The Supreme Court delivered its judgment in the constitutional challenge to Section 139AA of the Income Tax Act, which was brought in by way of an amendment in April this year, this provision made it mandatory for all taxpayers to quote their Aadhaar number when applying for a Permanent Account Number (PAN) and for filing returns of income. Failure to link one’s PAN with Aadhaar would automatically invalidate the former.

The Central Board of Direct Taxes (CBDT) issued a clarification regarding the quoting of Aadhaar for filing IT Returns, on the basis of Supreme Court Judgment in the Binoy Viswam Case.

In a press release, the CBDT explained the effect of Supreme Court Judgment as follows:

(i)From July 1, 2017 onwards, every person eligible to obtain Aadhaar must quote their Aadhaar number or their Aadhaar Enrolment ID number for filing of Income Tax Returns as well as for applications for PAN;

(ii) Everyone who has been allotted permanent account number as on the 1st day of July, 2017, and who has Aadhaar number or is eligible to obtain Aadhaar number, shall intimate his Aadhaar number to income tax authorities for the purpose of linking PAN with Aadhaar;

(iii) However, for non-compliance of the above point No.(ii), only a partial relief by the Court has been given to those who do not have Aadhaar and who do not wish to obtain Aadhaar for the time being, that their PAN will not be cancelled so that other consequences under the Income Tax Act for failing to quote PAN may not arise

In Binoy Viswam Case, the division bench held that Section 139AA of the Act is not discriminatory nor does it offend equality clause enshrined in Article 14 of the Constitution. (Section 139AA is also not violative of Article 19(1)(g) of the Constitution in so far as it mandates giving of Aadhaar enrolment number for applying PAN cards in the income tax returns or notified Aadhaar enrolment number to the designated authorities.

Even as Aadhaar is being rolled out, with about 111 crore of the 125 crore population already on the database, there are several important constitutional and legal questions around the unique identity project. While this judgement addresses one of these issues, other questions remain unresolved. A description of the key legal questions is provided below.

It has been argued that the collection of identity data without adequate safeguards interferes with the fundamental right to privacy protected under Article 21 of the Constitution. Article 21 guarantees right to life and personal liberty. In August 2015, a three judge bench of the Supreme Court passed an order stating that a larger bench must be formed to decide the questions of: (i) whether right to privacy is a fundamental right, and (ii) whether Aadhaar violates this right. However, the court has not set up a larger bench to hear these petitions till June 2017.

Another question before the court is whether Aadhaar can be made mandatory for those government benefits and services that citizens are entitled to under law. In 2015, the Supreme Court passed some interim orders stating that:
(i) Aadhaar cannot be made mandatory for providing citizens with benefits and entitlements, and
(ii) it can only be used for seven schemes including PDS distribution of food-grains and kerosene, LPG distribution scheme, MGNREGA wage payments, and Prime Minister’s Jan Dhan Yojana.

Subsequently, Parliament enacted the Aadhaar Act, 2016, and the government has been issuing notifications under it to make Aadhaar mandatory for various schemes. In light of this, more petitions have been filed challenging these notifications. Judgements on these petitions are awaited as well.

The Supreme Court has held that the new provision of the Income Tax Act that makes Aadhaar mandatory for income tax assesses is not in violation of the fundamental right to equality, or the fundamental right to practice one’s profession or trade. The petitioner had contended that Aadhaar could not address the problem of tax fraud through duplicate PANs because there was evidence to show that people had multiple Aadhaar numbers as well but it has been rejected with a statement that Aadhaar is perceived as the best method of eliminating duplicate PANs, and therefore there is reasonable rationale behind linking the PAN database with Aadhaar.

As a result, the court decided not to examine questions related to human dignity and privacy, on the ground that issues affecting Article 21 will be examined by a larger bench to be set up by the court. However, it granted relief to people, who have not enrolled for Aadhaar, by stating that their PAN cards cannot be invalidated till the time when the matter is finally decided by such a bench.

In the context of the Aadhaar-PAN petitions, the pending reference on the issue of privacy is important as it severely curtails the ground for challenge available to the petitioners. Forced to give up arguments on privacy, the submissions in this case were largely limited to the issue of bodily integrity and the right to equality. Arguments were also made on the grounds that the introduction of Section 139AA of the Income Tax Act violates Articles 14 and 19 of the Constitution of India.

However, in the present judgement, the Court has construed privacy broadly. The Court excluded all arguments made on bodily integrity, dignity and the right to informational self-determination, on the basis that these concepts linked to privacy.

 

ISBN No: 978-81-928510-1-3
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