Partial stay on PAN-Aadhaar linking

The government cannot force the public to get an Aadhaar for filing income tax returns for the time being, the Supreme Court said on Friday, even as it found merit in the decision to link the unique identification number with PAN. The top court said that PAN cards without Aadhaar will not be treated invalid till a Constitution bench decided the concerns of right to privacy. But the SC made it clear that those who possess the identity document must link it to their Permanent Account Number(PAN). Over 95 per cent of the population – 115 crore – already have Aadhaar, according to an affidavit by the Centre.

A bench comprising Justices A K Sikri and Ashok Bhushan said the Income Tax Act provision, making Aadhaar must for PAN and I-T returns, was valid subject to the outcome of the batch of petitions before its Constitution bench. It said previous transactions would not be affected or nullified with partial stay on the new law till privacy issue linked to Aadhaar was decided. The court had on May 4 reserved the verdict on a batch of petitions challenging section 139AA of the I-T Act, which was introduced through the latest budget and the Finance Act, 2017.

Section 139AA of the Income Tax Act 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 1this year. The Centre had earlier said that the programme of PAN had become suspect as it could be faked, while Aadhaar was a “secure and robust” system by which the identity of an individual could not be faked. The petitioners, including CPI leader Binoy Viswam, have contended that the Centre cannot “belittle” the apex court’s 2015 order holding the unique identification number as voluntary.

They had argued that government should not have enacted section 139AA in the Act to make Aadhaar mandatory for PAN as the apex court’s five-judge bench order was clear that Aadhaar was voluntary and not mandatory. Attorney General Mukul Rohatgi had contended that Aadhaar was made mandatory for allotment of PAN to weed out fake cards which were used for terror financing and circulation of black money. Rohatgi had said that with the implementation of Aadhaar, the government had saved over Rs 50,000 crore on various schemes to benefit the poor as well as pension schemes.

The Centre had also told the court that fake PAN cards were being used to “divert funds” to shell companies. The SC had observed that it was yet to be “tested” whether Aadhaar violated protection of life and personal liberty granted under Article 21 of the Constitution, which was pending hearing for an authoritative pronouncement by a five-judge Constitution Bench.


• Linking will weed out fake PAN
• Will check use of shell companies for illegal transfer of money to fund terrorist activities

• What if Aadhaar data is stolen
• Five-judge bench of apex court had ruled in 2015 that Aadhaar was voluntary

SC: It is yet to be tested whether Aadhaar violated protection of life and personal liberty

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