Mandatory Aadhaar-PAN Linkage for Demat Accounts Upheld as Constitutional Under Section 139AA of Income Tax Act

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....The HC upheld the mandatory linkage of Aadhaar with PAN for Demat account operations, rejecting a senior citizen's challenge who deliberately avoided Aadhaar enrollment. The court found that SS139AA of the Income Tax Act satisfies the Puttaswamy triple test of legality, necessity, and proportionality. While acknowledging data security concerns, the court determined that the state's compelling interest in preventing financial fraud and tax evasion justifies this limited privacy restriction. The provision serves legitimate regulatory purposes in the securities market by eliminating duplicate PANs and ensuring transaction traceability. The court concluded that adequate safeguards exist to mitigate risks, rendering the requirement constitutionally valid.....