The Finance Act, 2017 had inserted a new section 139AA in the Income-tax Act, 1961, requiring
every person who is eligible to obtain Aadhaar to quote his Aadhaar number while applying for
PAN or furnishing return of income with effect from July 1, 2017. If any person does not possess
the Aadhaar Number but he had applied for the Aadhaar card then he can quote Enrolment ID of
Aadhaar application Form in the ITR.
Section 139AA further provides that every person who has been allotted PAN as on the 1st day
of July, 2017, and who is eligible to obtain Aadhaar number shall intimate his Aadhaar number
on or before a date to be notified to the Income-tax Department. In case of failure to intimate the
Aadhaar number, PAN allotted to the person shall be made inoperative after the date so notified.
The Central Board of Direct Taxes has notified Rule 114AAA prescribing the manner and
consequences if PAN becomes inoperative. The Rule 114AAA(2) provides that where a person,
whose PAN has become inoperative, it shall be deemed that he has not furnished, intimated or
quoted the PAN, as the case may be, and he shall be liable for all the consequences under the Act
for not furnishing, intimating or quoting the PAN.
However, the person can reactivate his PAN by subsequently intimating his Aadhaar to the
Department.
The Finance Act, 2021 has inserted a new Section 234H to levy a fee for default in intimating the
Aadhaar Number. If a person is required to intimate his Aadhaar under Section 139AA and such
person fails to do so, he shall be liable to pay a fee, as may be prescribed, not exceeding Rs.
1,000 at the time of making such intimation.
Therefore, if the person fails to link PAN-Aadhaar by due date, he shall be liable to pay a fee,
maximum of Rs. 1,000. This fee shall be in addition to the other consequences the person has to
face if PAN becomes inoperative due to non-intimation of Aadhaar.