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All assesses ‘constitute one class’ in Income-Tax Act, no discrimination says SC

New delhi: The Supreme Court has termed as “fallacious” an argument that the new provision of the Income Tax Act making Aadhaar mandatory for filing income tax returns, is discriminatory and creates two classes.

The apex court did not find anything wrong with section 139AA of the Act and said all income tax assesses “constitute one class” and are “treated alike” by this provision which was challenged.

The newly incorporated section 139AA provides for mandatory quoting of Aadhaar or enrolment ID of Aadhaar application form for filing of income tax returns and making application for allotment of PAN with effect from July 1 this year.

The apex court said the validity of a legislative act cannot be challenged by creating artificial classes by those who are objecting to a particular provision and predicating the argument of discrimination on that basis.

“When a law is made, all those who are covered by that law are supposed to follow the same. No doubt, it is the right of a citizen to approach the court and question the constitutional validity of a particular law enacted by the legislature. However, merely because a section of persons opposes the law, would not mean that it has become a separate class by itself.

Two classes, cannot be created on this basis, namely, one of those who want to be covered by the scheme, and others who do not want to be covered thereby,” a bench of justices A K Sikri and Ashok Bhushan said.

The court termed as fallacious argument advanced by the counsel for petitioners that the provision of the I-T Act was discriminatory in nature as it created two classes — one class of those who volunteered to enroll themselves under Aadhaar scheme and other class of those who did not want it to be so.

“It was further submitted that in this manner this provision had the effect of creating an artificial class of those who object to Aadhaar scheme as self-conscious persons. This is a fallacious argument,” the bench said. It, however, said if such a proposition is accepted,

It, however, said if such a proposition is accepted, every legislation would be prone to challenge on the ground of
discrimination. “As far as plea of discrimination is concerned, it has to be raised by showing that the impugned law creates two classes without any reasonable classification and treats them differently,” it said.

It further said Article 14 (right to equality) of the Constitution prohibits class legislation and not reasonable classification for the purpose of the legislation.

“All income tax assesses constitute one class and they are treated alike by the impugned provision,” it held. The court’s observations came while it upheld the validity of the law making Aadhaar mandatory for allotment of PAN and filing of income tax returns but exempted those without it for now until the larger privacy issue is decided.
PTI