Advocate Akhilesh Kumar Sah

As we all are aware that, now-a-days Aadhaar is becoming a more conclusive evidence as comparison with PAN. Even now as per latest guidelines issued by CBDT the PAN will be allotted instantly through Aadhaar based KYC. Further, CBDT has notifies Income Tax Rule 114AAA prescribing  that permanent account number (PAN) will become inoperative if  a person, who has been allotted PAN as on the 1st day of July, 2017 and is required to intimate his Aadhaar number under section 139AA(2), has failed to intimate the same on or before the 31st day of March, 2020. In this article we are covering all these factors and will discussed that in detail for your better understanding.

Extract of Section 139AA:

Quoting of Aadhaar number.

139AA. (1) Every person who is eligible to obtain Aadhaar number shall, on or after the 1st day of July, 2017, quote Aadhaar number—

(i) In the application form for allotment of permanent account number;

(ii) In the return of income:

Provided that where the person does not possess the Aadhaar number, the Enrolment ID of Aadhaar application form issued to him at the time of enrolment shall be quoted in the application for permanent account number or, as the case may be, in the return of income furnished by him.

(2) Every person who has been allotted permanent account number as on the 1st day of July, 2017, and who is eligible to obtain Aadhaar number, shall intimate his Aadhaar number to such authority in such form and manner as may be prescribed, on or before a due date to be notified by the Central Government in the Official Gazette:

Provided that in case of failure to intimate the Aadhaar number, the permanent account number allotted to the person shall be made inoperative after the date so notified in such manner as may be prescribed.

 (3) The provisions of this section shall not apply to such person or class or classes of persons or any State or part of any State, as may be notified by the Central Government in this behalf, in the Official Gazette.

Explanation- For the purposes of this section, the expressions

(i)“Aadhaar number”, “Enrolment” and “resident” shall have the same meanings respectively assigned to them in clauses (a), (m) and (v) of section 2 of the Aadhaar (Targeted Delivery of Financial and other Subsidies, Benefits and Services) Act, 2016(28 of 2016)

(ii)“Enrolment ID” means a 28 digit Enrolment Identification Number issued to a resident at the time of enrolment.

The date has been specified by Notification Number 11/2020 dated 13th February, 2020. In this notification CBDT has specified that a person, who has been allotted PAN as on the 1st day of July, 2017 and is required to intimate his Aadhaar number under section 139AA(2), has failed to intimate the same on or before the 31st day of March, 2020, the PAN of such person shall become inoperative immediately after the said date for the purposes of furnishing, intimating or quoting under the Income Tax Act.

Analysis on importance of Aadhaar number and PAN under Income Tax:

On 21.04.2017, Hon’ble Supreme Court has asked Centre “How can you make Aadhaar card mandatory when we have passed an order to make it optional? Is making Aadhaar mandatory by force the only way to tackle the menace of fraud and fake PAN (permanent account number) cards?”. The Court asked this in reference to a PIL in respect of making compulsory Aadhaar(as per section 139AA) in respect of filing of income tax returns in respect of this, response of the Central Government was PAN cards were found to be misused, and the only option to combat this problem was to make Aadhaar mandatory. It was found that a number of PAN cards were being used to divert funds to shell companies. To prevent it (from happening), the only option was to make Aadhaar card mandatory. It is expected that the Apex Court will deliver final verdict in this respect on 25.04.2017.

The Supreme Court had on March 27,2017 made it clear that Aadhaar cards cannot be made mandatory by the government for extending benefits of social welfare schemes.

In Justice K.S.Puttaswamy (Retd) vs. Union Of India [Writ Petition (Civil) No.494 Of 2012, decided on 11 August, 2015] after considering the matter, the learned Judges were of the view that the balance of interest would be best served, till the matter is finally decided by a larger Bench if the Union of India or the UIDA proceed in the following manner:-

1. The Union of India shall give wide publicity in the electronic and print media including radio and television networks that it is not mandatory for a citizen to obtain an Aadhaar card;

2. The production of an Aadhaar card will not be condition for obtaining any benefits otherwise due to a citizen;

3. The Unique Identification Number or the Aadhaar card will not be used by the respondents for any purpose other than the PDS Scheme and in particular for the purpose of distribution of foodgrains, etc. and cooking fuel, such as kerosene. The Aadhaar card may also be used for the purpose of the LPG Distribution Scheme;

4. The information about an individual obtained by the Unique Identification Authority of India while issuing an Aadhaar card shall not be used for any other purpose, save as above, except as may be directed by a Court for the purpose of criminal investigation.

Allotment of Instant PAN Through Aadhaar Based e-KYC

CBDT has published some guidelines for Instant PAN allotment in near to real time available at free of cost. Individuals (other than minors) with a valid Aadhaar number (with updated Mobile number) can avail the PAN allotment facility.

The salient points of this facility are:

1. The applicant should have a valid Aadhaar which is not linked to any other PAN.

2. The applicant should have his mobile number registered with Aadhaar.

3. This is a paper-less process and applicants are not required to submit or upload any documents.

4. The applicant should not have another PAN. Possession of more than one PAN will result in penalty under section 272B(1) of Income-tax Act.

PAN and validity of PAN

1. Electronically issued and Digitally signed ePAN is now a valid mode of issue of Permanent Account Number (PAN) post amendments in clause (c) in the Explanation occurring after sub- section (8) of Section 139A of Income Tax Act, 1961 and sub-rule (6) of Rule 114 of the Income Tax Rules, 1962.

2. Government has recently amended sub-rule (6) of Rule 114 of the Income Tax Rules, 1962, vide G.S.R 1128(E), dated 19/11/2018 for empowering the Pr. DGIT(S) to notify formats and standards alongwith procedure of issue of PAN.

3. Consequent to notification dated 19/11/2018, Pr. DGIT(S) has notified procedure, formats and standards of issue of Permanent Account Number (PAN) vide Directorate of Income-tax

4. (Systems) notification 7/2018 dated 27.12.2018. Consequent to this notification, electronically issued digitally signed e-PAN now is a valid mode of issue of PAN.

5. e-PAN also contains enhanced QR code having demographic (Name, DOB, Father’s Name) as well as biometric (scanned photo and signatures) information of the PAN holders which can be accessed and used for PAN verification purposes in off-line mode. Information of enhanced QR code is accessible to user agencies through freely available Android version of ‘PAN QR Code


At the end we can observe that Aadhaar is becoming a more conclusive evidence as comparison with PAN and we need to comply with all adhaar and PAN related guidelines issued by CBDT otherwise PAN will become inoperative

Republished with amendments

More Under Income Tax



    For those who wish to link Aadhaar to PAN in Income Tax that option should be available.

    Bio metrics with PAN will entail further expenses to the poor citizens particularly in Rural area as PAN charges are exorbitant. Instead Aadhhar can be corrected with less expense.

    Interesting Fact – My Name in all documents including Aadhaar and PAN ends with BHARATI;
    When I went for renewla of Passport which had the spelling BHARATHI, I was asked to provide proof for BHARATHI.

    Passport also takes Finger Prints and Iris. Where is the co-relation?

    Computers have limitations which can be over ridden only by man.

    If everything is to go online and by Computer why have highly paid Officers? – Super programmers can run the Government.

    Human Intervention when needed has to be catered for

  2. CA. S.C.Podder says:

    I enrolled with UIAD for getting AADHAAR card , several mistakes detected / corrected by the authority ( Name ( SUBHASH , spelled as SABHAS, Date of Birth 07-02-1943 spelled as 02-07-1934.
    Father Name KISHORI . spelled as KASHR . Mobile No – 94xxxxxxx 8778 ) spelled 9040008778, Addresse U.K.DUTTA ROAD , Spelled UKDATTA Rd.
    Assured will get soon in the year 2014 not yet received ,
    Another applied on 07/04/2017 may get after 3 month . If I received both the Card , What to DO?

  3. Mohandas Punjabi says:

    Chicken and egg story. On passport form, aadhar number and PAN card numbers are stated. Those cases can be taken as authentic right away. If money is diverted to shell companies, what is purpose of aadhar? Aadhar is not issued to companies. For shell companies, they should use DIN numbers. The DIN numbers would obviously be linked to PAN numbers. What do you think? Jan dhan accounts may be necessary to have aadhar.

  4. Prasanna says:

    Yes, in most of the cases spelling, address, DOB mistakes exists. Adding mobile number and mail I’d not available in maximum cases. Practical difficulty exists. It’s better to provide bio metrics option for applying the PAN through online process. At the same time mobile number and mail I’d should be automatically update in Aadhar database.

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May 2021