Aadhaar-PAN linkage a must – Supreme Court upholds the law

This Friday, there were two developments on the Aadhaar front, but only one has got all the attention. One is, the Supreme Court’s order on the compulsory linking of an individual’s PAN and Aadhaar numbers. The second development, is that the central government has stood firm on giving welfare benefits to only those with Aadhaar after June 30. The order on linking of PAN and Aadhaar is being described as a partial victory for those who opposed the move.

Upholding the validity of Section 139AA of the Income Tax Act introduced through the Finance Act, 2017, a bench of Justices A K Sikri and Ashok Bhushan, in a 155-page judgment, ruled: "We hold that Parliament was fully competent to enact Section 139AA of the I-T Act and its authority to make this law was not diluted by the orders of this court."

However, it clarified that "those assessees who are not Aadhaar card holders and do not comply with the provision of Section 139(2), their PAN cards be not treated as invalid for the time being". This means that those who have a PAN but have not yet got Aadhaar can still file their income tax returns this year. But if they fail to apply for an Aadhaar number by July 31, the last date for filing income tax returns, their PAN cards will be invalidated.What’s more, it goes on to say that it is only giving this relief because people who have their PAN invalidated will face problems in day-to-day dealings.

Many people are challenging the idea of PAN-Aadhaar linkage, but the problem of fake PANs is a real one. Income tax officials talk about business families which use multiple PAN cards for different transactions to escape the tax net. So, perhaps Aadhaar linkage is needed to weed out these fake PANs. There is also the question will the Court also uphold the government’s stand on linking Aadhaar with welfare delivery? According to The Times of India report, the government has stood firm on linking the two, pointing out that only those who have not been able to apply for Aadhaar because of lack of registration facilities in their areas would continue to get benefits after 30 June, on the basis of alternative documents.

The government is certainly right in pointing out that “the uniqueness of Aadhaar helps in elimination of duplicates and fakes from any beneficiary database”. Several cases have come to light of ghost enrolments in government schools to siphon off money meant for mid-day meals, of duplicate ration cards, etc. If the Supreme Court is accepting the argument of Aadhaar being the best instrument for weeding out fake PANs, it should also accept the argument of making Aadhaar mandatory for welfare delivery in order to weed out fake/ghost beneficiaries.

The activists have argued that biometric authentication fails because of lack of connectivity and problems with iris and fingerprint authentication in the case of senior citizens and manual workers respectively. The court cautioned the government to take all proper measures to ease off public apprehensions about data leakage and by taking proper measures so that confidence is instilled among the public at large.


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