01 All organisations which are required
to furnish return of income under section 139(4A) and (4C)
should apply for a Permanent Account Number(PAN). As the
name suggests, it is a taxpayer’s permanent identification
number allotted by the income-tax department. PAN once allotted
remains valid forever unless it is cancelled or changed by
the department. Explanation to section 139A(8) defines PAN
as “Permanent Account Number under the new series means
a permanent account number having 10 alphanumeric characters
and issued in the form of a laminated card”.
02 The application for allotment of PAN
is required to be made in a revised format of Form No. 49A,
the acknowledgement of the application is returned to the
applicant after affixing the official stamp by the department.
The application for PAN should be accompanied by the proof
of identity and address of the applicant. The PAN application
is to be made to the assessing officer who has been specifically
assigned by the income-tax department to carry out such function.
NECESSITY AND USES OF PAN
03 Under the existing law, it is absolutely
necessary for all income- tax assessees to quote PAN in the
following documents :
(i) in the income-tax return and in all other correspondences
with the income-tax department.
(ii) in all challans for payment of any tax, interest and
penalty due under the Income-tax Act.
(iii) in all documents related with the following transactions
(a) sale or purchase of any immovable property in excess
of Rs. 5,00,000/-.
(b) sale or purchase of a motor vehicle other than a two
(c) a time deposit exceeding Rs. 50,000/- with a bank.
(d) a deposit exceeding Rs. 50,000/- in any account with
a Post Office.
(e) sale or purchase of shares, stocks and other securities
in excess of Rs. 10,00,000/-.
(f) opening of a bank account.
(g) applying for a telephone connection including cellular
(h) payment to hotels and restrauants in excess of Rs. 25,000
at a time.
Further, if any part of the income of the assessee is liable
to deduction of tax at source, the assessee is required to
intimate his PAN to the person responsible for deducting
tax at source.
04 The Voluntary Organisations which fail
to comply with the provisions of section 139A are subjected
to penalty under section 272B, inserted by the Finance Act,
2002. A sum of Rs.10000 by way of penalty can be levied on
such organisations after giving a reasonable opportunity
of being heard. It may be noted that penalty is leviable
not only for not applying for PAN, but also for (i) failure
to quote PAN in the prescribed documents, or (ii) failure
to intimate such PAN when required, or (iii) quoting or intimating
a number which is false. Penalty is however not leviable
if the assessee proves that there was reasonable cause for