SC questions need for making Aadhaar mandatory for filing IT returns

The Supreme Court is miffed at the government's move to link Aadhaar number with Permanent Account Number (PAN) for filing income tax returns from the assessment year 2017-18 despite its orders that it should be optional.

The issue came up for judicial scrutiny on Friday with the Supreme questioning the decision even as the centre told the court that fake permanent account number (PAN) cards were being used to "divert funds" to shell firms.

''Why has it been made mandatory?'' a bench headed by Justice AK Sikri asked Attorney-General Mukul Rohatgi during hearing of a PIL questioning the legality of Section 139AA in the Income Tax Act that talks about linking Aadhaar number with PAN. There was an order to keep it optional, it pointed out.

Rohatgi defended the government's decision stating that people were furnishing PAN cards procured on the basis of fake documents. He said many of them held multiple PAN cards and used them to divert funds to shell companies.

''Is making Aadhaar by force the only way to tackle fraud?'' the bench asked.

To this Rohatgi said there were instances were a person was found to be having several PAN cards and to stop such 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 PANs were used to divert fund to shell companies," the Attorney General told the bench.

A constitution bench of the Supreme Court is already seized of petitions challenging the validity of Aadhaar on the ground of violation of Right to Privacy.

The court had in August 2015 said Aadhaar number would not be mandatory for availing benefits of government's welfare schemes.

However, in October 2015 it permitted voluntary use of Aadhaar number in welfare schemes, including MGNREGA, pension schemes, provident fund and 'Pradhan Mantri Jan Dhan Yojna'.

Senior counsel Arvind Datar, representing the petitioner, a former Kerala MLA, Binoy Viswam, told the bench that there is no constitutional validity for section 139AA of the Income Tax Act which has made Aadhaar mandatory for applying for PAN card as well as for filing income tax returns.

"As per 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.

According to Viswam, he did not have an Aadhaar number as it was not mandatory in view of the top Court's orders which said it was not mandatory as well as provisions of the Aadhaar Act.

But, due to introduction of Section 139AA of the Act, he was being forced to get an Aadhaar number in complete violation of his right to privacy guaranteed under Article 21 of the Constitution, he pointed out.