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”.
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 :
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.
The application for allotment of PAN is required to be made in a revised format of Form No. 49A, application for fresh allotment/changes/correction in PAN can be made online. For online application please follow below mentioned procedure:
Step I: visit Portal of NSDL ( https://tin.tin.nsdl.com/pan/index.html ) or portal of UTITSL (https://www.pan.utiitsl.com/PAN/index.jsp) and select “Apply online”.
Step II: Carefully read the guidelines related to documents required and format of documents required.
Step III: Select Application type (Indian citizen- 49A/ foreign citizen- 49AA) and select category. Fill out the requisite details on the form (Fill all mandatory fields (marked with *))
Step IV: If the data submitted by applicant fails in any format level validation, a response indicating the error(s) will be displayed on the screen;
Step – V: Forms need to be re-submitted after rectifying the error(s);
Step – V: In case form level error(s) do not exists a confirmation screen with data filled by the applicant will be displayed.
Step – VI: In case applicant required any amendment to the data displayed in the confirmation screen, it may choose the edit option.
Step – VII: In case the displayed information is correct, applicant shall choose the confirm option.
Step – VIII: On successful payment of Fees (in case the mode of payment is other than DD or Cheque) an acknowledgment slip will be generated. The charges for applying for PAN is Rs. 93 (excluding GST) for Indian communication address and Rs. 864 (excluding GST) for foreign communication address.
Step – IX: Once the application and payment is accepted, the applicant is required to send the supporting documents through courier/post to NSDL/UTITSL. Only after the receipt of the documents, PAN application would be processed by NSDL/UTITSL.
Three main documents are required for PAN application
1. Proof of Identity: documents accepted as proof of identity
2. Proof of date of birth: documents accepted as proof of date of birth
3. Address proof: documents accepted as address proof are
Every person who is eligible to obtain Aadhaar number shall, on or after the 1st day of July 2017, quote Aadhaar number—
If at the time of application of PAN, person does not possess the Aadhaar Number, the Enrolment ID of Aadhaar application form issued at the time of enrolment shall be quoted in the application for PAN.
Every person already holding PAN as on the 1st day of July 2017, shall link Aadhaar with PAN within time allowed by the Central Government, otherwise PAN will become invalid.
Key issues under Application
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.