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Centre faces Supreme Court poser on mandatory Aadhaar for PAN cards

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The Centre on Friday faced searching questions from the Supreme Court for making Aadhaar mandatory for PAN cards, despite its order that it should be optional.
Attorney General Mukul Rohatgi, appearing for the Centre, made the submission as a Bench comprising Justices AK Sikri and Ashok Bhushan asked him why Aadhaar has been made mandatory for applying for PAN cards when the apex court had earlier said it should be made optional.
Rohatgi said the government had found that lots of fake PAN cards had been procured on the basis of fake ration cards and other documents and these were used to divert funds to shell firms.To stop such a situation, it has been decided to make Aadhaar mandatory while applying for PAN.
“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 cards were used to divert funds to shell firms,” he said.
The Bench observed, “Is this the remedy that you need to have Aadhaar for having PAN? Why has it been made mandatory despite this court´s order?”
Section 139AA of the Income Tax Act, introduced by the Finance Act 2017, provides for mandatory quoting of Aadhaar or enrolment ID of Aadhaar application form for filing of IT returns and for making application for allotment of PAN with effect from July 1 this year.
Rohatgi said they had found that SIM cards for mobiles were procured on fake identity cards and the apex court had asked the Centre to put in place an effective mechanism to scrutinise it.
Senior counsel Arvind Datar, representing the petitioner, told the bench that they have challenged the constitutional validity of section 139AA of the income Tax Act, which has made Aadhaar mandatory for applying for PAN card as well as for filing IT returns.“According to this section, if one does not have Aadhaar card, he cannot have a PAN.
This would create huge difficulties,” he told the Bench, which said it would hear arguments on the plea on April 25.

Business Standard New Delhi, 22nd April 2017

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