Mandatory Aadhaar For Tax Returns, PAN Is ‘Civil Death’, Argues Arvind Datar

The government cited the problem of fake permanent account numbers (PAN) to counter petitions in the Supreme Court challenging the decision to make Aadhaar mandatory for filing income tax returns and obtaining PAN cards.

The apex court heard a batch of petitions against the government’s decision on Wednesday. Senior Advocate Arvind Datar, representing one of the petitioners, argued that as a result of this amendment, anyone who does not get an Aadhaar card will lose their PAN card as well. The amendment, he said, violates Articles 14 and 19(1)(g) of the Constitution.

Calling the decision arbitrary, he appealed to the apex court to strike it down.

Attorney General of India Mukul Rohatgi, arguing on behalf of the Centre, said fake PAN cards are a “big problem”, and by linking them with Aadhaar, the government is seeking to prevent their duplication. Around 10 lakh fake PAN cards are detected each year, Rohatgi said.

The petitions being heard by the Supreme Court were filed against Section 139AA of the Finance Bill, 2017. According to this Section, every person eligible for Aadhaar shall on or after July 1, 2017 quote the number while applying for PAN and filing income tax returns. The failure to link the Aadhaar number will make the PAN card invalid and the person will be presumed to have never applied for one.

Datar argued that this provision may impact previous tax deposits as the assessment structure for PAN card holders and non-PAN holders is different. The Attorney General clarified that the provision in the amendment is not retrospective – it will apply from 2017. Older assessments won’t be questioned, Rohatgi said.

The apex court will continue hearing the matter on Thursday.