Linking of Aadhaar Card to PAN Mandatory for the Assesment Year 2019-2020. – Supreme Court of India

Aadhaar as everyone know is a 12-digit unique identity number that can be obtained by residents of India, based on their biometric and demographic data. Indian government has formed Unique Identification Authority of India (UIDAI), a statutory authority for collection of Data.

Aadhaar is the world’s largest biometric ID systemWorld Bank Chief Economist Paul Romer described Aadhaar as “the most sophisticated ID programme in the world”. However, The Aadhaar project has been one of the most controversial projects of the Government of India, initiated in 2009. With this Aadhaar Scheme the Government’s is trying to link Aadhaar numbers with SIM cards, Bank accounts and PANs; and the move to make Aadhaar mandatory for availing benefits and subsidies to poorer section of the society. In one sentence Aadhaar was brought in to become a single solution to all identity cards.

PAN and Aadhaar

Section 139AA of the Income Tax Act 1961 states ‘Mandatory Quoting of Aadhaar for PAN Applications & Filing Return of Income’. Section 139AA of the Income Tax was inserted as an amendment in the Income Tax Act in 2017 after the enactment of the Aadhaar act.

The Delhi High Court in Shreya Sen v. Union of India[1], in its order had permitted Shreya Sen and other petitioners to file the Income tax returns for the Assessment Year 2018-19 without linking their Aadhaar and PAN numbers and also directed that the Income Tax Department would not insist on production of their number of Aadhaar. The Hon’ble Delhi High Court held

This court is of the opinion that at least for the period till 31.03.2019, the CBDT shall issue an appropriate direction, and also create a platform by amending the digital form of substituting them properly to enable “opt out” from the mandatory requirement of having to furnish Aadhaar Registration or Aadhaar linkage, for the duration, the exemption subsists i.e. till 31.03.2019.”

In appeal to this Delhi High Court order by the Union of India in the Apex Court, the bench consisting of Justice A.K. Sikri and Justice S. Abdul Nazeer observed

“The aforesaid order was passed by the High Court having regard to the fact that the matter was pending consideration in this Court. Thereafter, this Court has decided the matter and upheld the vires of section 139AA of the Income Tax Act as linkage of PAN with Aadhaar is mandatory”.

The Supreme Court also clarified all the stakeholders that for the assessment year 2019-20, the Income Tax return shall be filed in conformity to the Supreme Court order.

In Justice K.S. Puttaswamy v. Union of India[2] the Supreme Court already had upheld the validity of section 139AA while removing some other sections of the Aadhaar Act. In this Judgment on September, 2018 the court observed that section 139AA is not in violation of right to privacy as it satisfies these 3 test

  1. Existence of a law;
  2. A ‘legitimate State interest’; and
  3. Such law should pass the ‘test of proportionality’.

The five-judge constitution bench in Justice K.S. Puttaswamy v. Union of India had held that while Aadhaar would remain mandatory for filing of I-T returns and allotment of Permanent Account Number (PAN), However, it will not be obligatory to link Aadhaar to Bank accounts and Telecom Service Providers and also cannot seek its linking for mobile connections.

This means if PAN is not linked with Aadhaar, the tax return will not be accepted. The Central Board of Direct Taxes (CBDT) has extended the date to link PAN with Aadhaar till March 31, 2019.

With regards to assessment year 2018-19, the Bench keeping in view the point raised by the counsel appearing for the respondents that the respondents have already filed the income tax returns in terms of the orders of the  Hon’ble High Court and the assessment has also been complete. Keeping the practical difficulty in mind, the Hon’ble Bench gave its order for returns to be filed for the assessment year 2019-20.

Author: Mr. Shubham Borkar, Senior Associate – Litigation and Business Development and Lakshay Kewalramani – Intern, at Khurana & Khurana, Advocates and IP Attorneys. In case of any queries please contact/write back to us at or at


[1] W.P.(C) 7444/2018


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