SC upholds linking of Pan and Aadhar


  • By Admin /Aadhar and Pan /1 month ago /12

Court :
Supreme Court

Brief :
SC upholds linking of Pan and Aadhar


Citation :
Justice K.S. Puttaswamy (RETD.) v. Union of India [2018] 97 taxmann.com 585 (SC)

SC upholds linking of Aadhaar number with PAN:

[Justice K.S. Puttaswamy (RETD.) v. Union of India [2018] 97 taxmann.com 585 (SC)]

The Finance Act, 2017 inserted a new section 139AA in the Income-tax Act, 1961. With effect from July 1, 2017 this provision requires every eligible person to link the Aadhaar no. with PAN and quote the Aadhaar number in the Income-tax return. If any person does not possess the Aadhaar Number but he has applied for the Aadhaar card then he has to quote Enrolment ID of such Aadhaar application in the ITR.

The Supreme Court had already upheld the validity of Section 139AA by repelling the contention raised on Articles 14 and 19 of the Constitution of India in the case of Binoy Viswam v. Union of India [2017] 82 taxmann.com 211 (SC).  However, Section 139AA was not examined in the context of privacy rights enshrined in Article 21 of the Constitution.  The Supreme Court in the case of K S Puttaswamy v. Union of India writ petition (civil) no 494 of 2012 held that, though privacy is a fundamental right, yet it is not an absolute right and is subject to certain limitations. The following are the triple tests which need to be satisfied for judging the permissible limits for invasion of privacy while testing the validity of any legislation:

a) Existence of a law

b) Legitimate State interest

c) Test of Proportionality

The first requirement stands satisfied as section 139AA is a statutory provision and, therefore, there is a backing of law. Insofar as requirement of ‘legitimate State interest’ is concerned, Section 139AA seeks to safeguard the following interest: 

“To prevent income tax evasion by requiring, through an amendment to the Income Tax Act, that the Aadhaar number be linked with the PAN.”

Regarding the aspect of proportionality, there was specific discussion on that aspect in Binoy Viswam’s case (supra) as well. Therefore, the provision of Section 139AA has successfully met the triple test of right to privacy.