Supreme Court has questioned the centre on making Aadhaar compulsory for PAN cards.

Highlights Fake PAN cards being used to "divert funds" to shell firms: Government

Aadhaar mandatory to apply for PAN card, filing income tax returns

The bench will hear arguments on the plea on April 25

The Supreme Court today pulled up the centre for making Aadhaar mandatory for PAN cards, despite its order that it should be optional. In its defence, the government said that fake PAN cards were being used to "divert funds" to shell firms. The top court was hearing a plea filed by CPI leader Binoy Viswam challenging constitutional validity of section 139AA of the Income Tax Act, introduced by the Finance Act 2017, that asks for mandatory quoting of Aadhaar or enrolment ID of Aadhaar application form for filing income tax returns.The court had on March 27 made it clear that Aadhaar cards can't be made mandatory by the government for extending benefits of social welfare schemes. It had, however, said that the centre cannot be barred from seeking Aadhaar cards, which are issued by UIDAI, for filing of I-T returns and opening of bank accounts.Responding to a bench comprising Justices AK Sikri and Ashok Bhushan, Attorney General Mukul Rohatgi said the government has found that tonnes of fake PAN cards were procured on the basis of fake ration cards and other documents and these were used to divert funds to shell companies. He cited instances where a person was found to have several PAN cards and Aadhaar was made mandatory for PAN to curb the problem.Senior counsel Arvind Datar, representing the petitioner, told the bench, "As per this section, if one does not have Aadhaar card, he cannot have a PAN. This would create huge difficulties."

The bench will hear arguments on the plea on April 25.