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2018 (7) TMI 480 - HC - Income TaxPAN and Aadhar linking - Seeking to set aside Rule 12(3) of the Income Tax Rules 1961 - No Discretion to the Authorities under the Income Tax Act 1961(Act) to accept Income Tax returns other than electronically - Held that - In case the system does not accept the petitioner s return of income then in that event the petitioners are permitted to file their return of income in physical form with the Assessing officer on or before 30 June 2018. The respondents State is directed to accept the return of income for the Assessment Year 2018 19 by the petitioners herein if uploaded on or before 30th June, 2018 without Aadhar number, Aadhar Enrollment or any linkage with the PAN details. This is without prejudice to the rights and contentions of the state that such Returns of Income are contrary to the provisions of the Act. In case the system does not accept the Returns of Income filed by the petitioners in the absence of it quoting the Aadhar number or Aadhar Enrollment number or Linking with PAN details, then in that event the petitioners herein are at liberty to file their return of income in physical form with the jurisdictional Assessing Officer on or before 2nd July, 2018, who would accept the same. This has become necessary as we are informed that the Income Tax Office is closed on 30th June, 2018 and 1st July, 2018. The directions made in this order are restricted only to the petitioners before us. This is an interim order, without prejudice to the rights and contentions of the parties. Petition to be on board on 17th July, 2018 at 3.00 p.m. Parties to act on copy of this order duly authenticated by the Associate of this Court.
Issues Involved:
1. Validity of Rule 12(3) of the Income Tax Rules, 1961. 2. Requirement of Aadhar number for filing Income Tax returns. 3. Interim reliefs pending the final decision on the petition. Issue-wise Detailed Analysis: 1. Validity of Rule 12(3) of the Income Tax Rules, 1961: The petitioners challenged Rule 12(3) of the Income Tax Rules, 1961, under Article 226 of the Constitution of India. They argued that the rule does not allow discretion to the authorities under the Income Tax Act, 1961, to accept Income Tax returns other than electronically. The petitioners claimed that they were unable to file their returns for the assessment year 2018-19 due to the lack of Aadhar cards or Aadhar enrollment numbers, which the electronic system mandated. 2. Requirement of Aadhar number for filing Income Tax returns: The petitioners referred to a press release by the Central Board of Direct Taxes (CBDT) dated 27 March 2018, which extended the deadline for linking PAN with Aadhar from 31 March 2018 to 30 June 2018. They also cited interim orders from the Punjab and Haryana High Court and the Delhi High Court, which allowed the filing of returns without Aadhar linkage, provided they were filed before 30 June 2018. Despite these precedents, the petitioners faced issues with the electronic system not accepting returns without Aadhar numbers. An affidavit by petitioner No. 16 revealed that the system had accepted her return by generating an incorrect Aadhar number. The respondents, represented by the Additional Solicitor General, argued that the linking of Aadhar with PAN is mandatory under Section 139AA of the Act. They cited the Supreme Court decisions in Binoy Viswam vs. Union of India and Justice K.S. Puttaswamy (Retd.) vs. Union of India, which upheld the validity of Section 139AA. They contended that incorrect concessions made by the state counsel in earlier cases could not bind the state, referencing the Supreme Court's decision in Central Council for Research in Ayurveda & Siddha vs. Dr. K. Santhakumari. 3. Interim reliefs pending the final decision on the petition: The court noted that the orders from the Punjab and Haryana High Court and the Delhi High Court were based on the CBDT's press release and had not been challenged or varied by the state. The court emphasized that the state must apply the law equally and cannot adopt a selective approach. It directed the state to ensure that the petitioners' Income Tax returns for the assessment year 2018-19 be accepted without Aadhar linkage if filed before 30 June 2018. If the electronic system failed to accept the returns, the petitioners were permitted to file them in physical form with the jurisdictional Assessing Officer by 2 July 2018. Conclusion: The court granted interim relief to the petitioners, allowing them to file their returns without Aadhar linkage, pending the final hearing on 17 July 2018. The court's order was limited to the petitioners and did not prejudice the state's rights and contentions regarding the mandatory nature of Aadhar linkage under the Act.
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