The Supreme Court today upheld the central government’s rule that makes it mandatory for people to link their Aadhaar card with PAN in order to be able to file their income tax returns (ITR). However, the Supreme Court also said that people who do not have Aadhaar card cannot be forced to accept the new law and their PAN cards cannot not be blocked as penalty. This will be also applicable to people who have enrolled for their Aadhaar card, but have not received it yet. The Supreme Court said that its judgment on Aadhaar-PAN linkage should not be associated with the larger privacy issue, which is a different case that would be decided on a later date. It may be recalled that the privacy case related to Aadhaar is being heard separately by a constitution bench.
However, one thing is clear that as of now, people with Aadhaar card will have to link it to their PAN, in order to become eligible to file their income tax returns. Experts said that this is both a partial win and partial setback for the central government. The government had introduced the new rule in order to check tax evasion. Section 139AA of the Income Tax Act states that Aadhaar or enrollment ID needs to be linked to PAN for filing income tax returns. This will be applicable from July 1, 2017. The Supreme Court bench agreed that the government has the right to enact such laws and that there was no conflict between the provisions of Aadhaar Act and Income Tax Act.