The Aadhaar card was made mandatory for income tax returns, provident funds, bank accounts and filing PAN cards under the Section 139AA of the Income Tax Act, which was introduced by the Finance Act 2017. The Supreme Court of India said that it would scrutinize the validity of the Central Government’s decision to make Aadhaar card mandatory for PAN cards and for filing income tax returns and sought a clarification from the government.
A bench of Justices Arjan Kumar Sikri and Ashok Bhushan asked the government why the Aadhaar was made compulsory when the apex court in its order made it clear that it could only be made optional. The bench said that it will scrutinize the issue whether the decision was valid or not in light of its interim order that said Aadhaar could be stipulated only for welfare benefits.
“Is this the remedy? Forcing people to get Aadhaar cards?” Justice A.K. Sikri orally addressed Attorney-General of India Mukul Rohatgi.
Mr. Rohatgi said that people were obtaining multiple PAN cards, which were used to “divert funds” to shell firms and linking to Aadhaar will curb such practices.
"There is a legislative mandate now. Section 139AA of the Income Tax Act says so. It is the only option as we have found that people were getting PAN cards on fake ration cards and such PANs were used to divert funds to shell companies," he said.
The court is hearing petitions filed by the former Kerala minister, Binoy Viswam and S.G. Vombatkere a former Army officer challenging the amendment in the I-T Act making it mandatory to quote the Aadhaar card in filing income tax returns.
Arivnd Datar, who is a senior advocate appearing for the petitioner, alleged that the amendment is extremely harsh and should not be allowed. He said that the amendment made it compulsory for people to provide their unique Aadhaar number and if one fails to do so then the PAN card would become void.
However, Rohatgi justified the government’s decision and said that there is nothing wrong in linking Aadhaar card with PAN card. He added that Supreme Court itself agreed to make Aadhaar card compulsory in certain fields to protect identity and national security.
“You (Supreme Court) yourself had recently ordered that Aadhaar should be made mandatory to procure SIM cards,” Mr. Rohatgi contended.
The bench adjourned the case, after a brief hearing and posted it to April 26th for final hearing.
It was a crucial attempt to link Pan Card with Aadhaar card as people file for multiple PAN cards, which are used to divert funds and the linkage will also curb the flow of black money to an extent.