Linking PAN-Aadhaar A Must For I-T Returns Says Supreme Court

Linking PAN-Aadhaar A Must For I-T Returns Says Supreme Court

Supreme Court rules that it would be mandatory for all Aadhaar holders to link the unique identity number with the PAN for filing income tax returns.

On Friday, the Supreme Court bench made it clear that there was no conflict between the impugned provisions of the Income Tax Act and the Aadhaar Act.

The Supreme Court on Friday upheld the government’s decision to link Aadhaar to one’s PAN card but refused to make it compulsory for those who don’t have an Aadhaar card or who have not yet applied for one, till a Constitutional Bench decides on the privacy question pending before it. In effect, those who possess an Aadhaar card have to link it to their PAN card.

Those who have enrolled and not yet got their Aadhaar card are also exempted from mandatory linkage and the penalising invalidation of their PANs if they don’t link it. The Supreme Court also said the government must formulate a scheme to prevent the leakage of personal details, a concern many citizens and civil society groups have expressed.

It said the Income Tax Act provision was valid subject to the outcome of the batch of petitions before the constitution bench, which was examining if the Aadhaar scheme infringed the right to privacy and if there was any threat of data leakage. The bench asked the government to take appropriate steps to ensure there was no leakage of data from the Aadhaar scheme.
It also said PAN cards without Aadhaar numbers would not be invalid until the constitution bench decided the larger issue of the right to privacy. It said previous transactions would not be affected or nullified with a partial stay on the new law till the privacy issue linked to Aadhaar was decided. The court had on May 4 reserved its verdict on a batch of petitions challenging Section 139AA of the IT Act, which was introduced in the February budget.

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How To Link Aadhaar card and PAN

On privacy, the two-judge bench said the government must put in place measures to ensure there is no leakage of data. “The government (has) to take proper and appropriate steps and the scheme in this regard has to be devised at the earliest to instill confidence among the citizens that the data would not be leaked,” the bench said.

In its earlier arguments, the government had informed the apex court that the PAN will be rendered invalid from July 1 and not from when a person had applied for it if a user does not link his or her Aadhaar card details to it by June 30.

Defending its decision to make Aadhaar card mandatory for filing one’s Income Tax returns, the government had earlier said the move would help to weed out fake and fraudulent financial accounts.


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