The apex court asked the Centre as to whether the move would address the problem of generation of fake PAN and ration cards.
The AG was responding to a query from the Supreme Court which had asked why Aadhaar was made mandatory.
The Supreme Court on Friday questioned the Union government over its decision to link PAN with Aadhaar card by asking if it is remedy for all ills.
Attorney General Mukul Rohatgi, who was defending the government's decision in the apex court, told the court that the government had taken the decision under the Uniform Identification Number act. The government was told that the Aadhaar can only be an optional requirement, as per the court's earlier ruling on the issue.
The Supreme Court had on March 27 made it clear that Aadhaar cards can not be made mandatory by the government for extending benefits of social welfare schemes. He said that the government can not be stopped from using Aadhaar in other schemes like the opening of bank accounts. "We found a number of PAN cards being used to divert funds to shell companies".More news: Netflix on the verge of hitting 100 million subscribers
Through an amendment to the tax proposals in the Finance Bill of the Budget for 2017-18, the government has made Aadhaar mandatory for filing income tax returns and provided for linking of PAN with Aadhaar to curb tax evasion through use of multiple PAN cards.
PAN cards do not have the backing of any biometrics.
In March, the court had asserted that Aadhaar can not be made mandatory for welfare schemes - as established in previous interim orders.
However, in an order dated August 11, 2015, had said that Aadhaar can not be made compulsory for government schemes.