PERMANENT ACCOUNT NUMBER (PAN)
 

INTRODUCTION

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”.

APPLICATION PROCEDURES

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 wheeler.

(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 phone connection.

(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.

PENALTIES

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 the failure.