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Permanent Account Number (PAN) [Section 139A and Rule 114]

1.   Who has to apply for PAN? [Section 139A (1)]:

Every person who has not been allotted a permanent account number shall, within such time, as may be prescribed, apply to the Assessing Officer for the allotment of a permanent account number in the following cases if:

(i)         his total income or the total income of any other person in respect of which he is assessable under this Act during any previous year exceeded the maximum amount which is not chargeable to income-tax; or

(ii)        he is carrying on any business or profession whose total sales, turnover or gross receipts are or is likely to exceed Rs. 5,00,000 in any previous year; or

(iii)       he is required to furnish a return of income under section 139(4A), i.e., return of trust and charitable institutions; or

(iv)       Not relevant now.

(v)        the person being a resident, other than an individual, which enters into a financial transaction of an amount aggregating to Rs. 2,50,000 or more in a financial year; or

(vi)       the person is the managing director, director, partner, trustee, author, founder, karta, chief executive officer, principal officer or office bearer of the person referred to in clause(v) or any person competent to act on behalf of the person referred to in clause (v) or.

(vii)      the person intends to enter into such transaction as may be prescribed by the Board in the interest of revenue. [Inserted by the Finance (No. 2) Act, 2019, w.e.f. 1.9.2019]

2.   Power delegated to the central Government to notify class or classes of persons for whom it will be obligatory to apply for permanent account number (PAN) [Section 139A(1A)].

With a view to progressively making PAN a common business identification number for other departments such as the Central Board of Excise and Customs and the Director General of Foreign Trade, the Act has delegated the power to the Central Government to notify class or classes of persons for whom it will be obligatory to apply for PAN, provided tax is payable by them under the Income- tax Act or any tax or duty is payable by them under any other law in force including importers and exporters whether any tax is payable by them or not.

The Central Government by Notification No. 11468, dated 29.8.2000 has notified the following class or classes of persons who shall apply to the Assessing Officer for allotment of permanent account number:—

(i)         Exporters and Importers as defined in section 2(20) and section 2(26) of the Customs Act, 1962, who are required to obtain an importer-exporter code under section 7 of the Foreign Trade (Development and Regulations) Act. 1992.

(ii)        Assessees as defined in rule 2(3) of Central Excise Rules, 1944. (it is now merged under GST Law)

(iii)       Persons who issue invoices of Cen vat i.e. traders, etc. requiring registration under Central Excise Rules, 1944. (it is now merged under GST Law)

(iv)       Persons who are assessees under service tax. (it is now merged under GST Law)

The above persons shall apply for allotment of PAN within 15 days of the date of publication of the notification in the Official Gazette.

However, persons who may fall in the above category, after the date of the above notification, shall apply for allotment of PAN:—

(a)              in case of (i) above, before making an import or export;

(b)        in case of (ii) and (iii) above, before making an application for registration under central excise;

(c)        in case of (iv) above, before making an application for registration under service tax.

The Central Government, by Notification No. 355/2001. dated 11.12.2001 has further notified the following class or classes of persons:

1.         Persons registered under the Central Sales Tax Act, 1956 or the general sales tax law of the appropriate State or Union Territory, as the case may be.

2.         As on the date of this notification, a person falling within a class or classes of persons referred to in paragraph I. shall apply for the allotment of permanent account number within thirty days of the date of publication of this notification in the Official Gazette.

3.         A person who may fall within such class or classes of persons after the date of this notification, as is referred to in paragraph (I), shall apply for the allotment of permanent account number (PAN) before making any application for registration under the Central Sales Tax Act, 1956 or the general sales tax law of the appropriate State or Union territory, as the case may be.

3. Prescribing new class of persons for allotment of PAN and Suo-moto allotment of PAN [Section 139A(1B)]:

The Central Government may, for the purpose of collecting any information which may be useful for or relevant to the purposes of this Act, by way of notification specify any class or classes of persons, and such persons shall within the prescribed time apply to the Assessing Officer for allotment of a permanent account number.

4. PAN may be allotted by the Assessing Officer (AO) [Section 139A (2)]:

The Assessing Officer having regard to the nature of transactions as may be prescribed may also allot a permanent account number to any other person (whether any tax is payable by him or not) in the manner and in accordance with the procedure as may be prescribed.

5.   Person other than falling under section 139A (1) or (2) may apply for PAN [Section 139A (3)]:

Any person, not falling under section l39A(l) or section 139A(2) above, may apply to the
Assessing Officer for the allotment of a permanent account number and, thereupon, the
Assessing Officer shall allot a permanent account number to such person forthwith.

6.   PAN to be quoted in certain cases [Section 139A(5)]:

On allotment of permanent account number, every person shall:

(a)        quote such number in all his returns to, or correspondence with, any income-tax authority;

(b)        quote such number in all challans for the payment of any sum due under this Act;

(c)        quote such number in all documents pertaining to such transactions as may be prescribed by the Board in the interests of the revenue, and entered into by him.

(1) Obligation of a person receiving any sum / income / amount from which tax has been deducted at source [Section 139A(5A)]:

Every person receiving any sum or income or amount from which tax has been deducted under the provisions of Chapter XVIIB. shall intimate his permanent account number to the person responsible for deducting such tax under that Chapter.

(2)   Obligation of a person who has Deducted the Tax at Source [Section 139A(5B)]:

Where any sum or income or amount has been paid after deducting tax, every such person deducting tax shall quote the PAN of the person to whom sum/income/amount has been paid by him in:

(a)        the statement of perquisites furnished to the employee in accordance with the newly inserted section 192(2C);

(b)        all certificates of TDS furnished under section 203;

(c)        in all statements prepared and delivered or caused to be delivered in accordance with the provisions of section 200(3).

However, the Central Government may notify different dates from which the provisions of this sub-section shall apply in respect of any class or classes of persons.

(3)   Obligation of a Buyer, Licensee, Lessee referred to in section 206C [Section 139A(5C)]:

Every such buyer, licensee or lessee shall intimate his PAN to the seller of such goods.

(4)   Obligation of the person responsible for collecting Tax [Section 139A(5D)]:

Every person responsible for collecting tax under section 206C shall quote the PAN of every buyer, licensee or lessee: —

(i)         in all certificates furnished to the buyer/licensee/lessee under section 206C;

(ii)        in all statements prepared and delivered or caused to be delivered in accordance with the provisions of section 206C (3).

7.   Duty of the Person receiving any document relating to the transactions where quoting of PAN is compulsory [Section 139A (6)]

Every person receiving any document relating to a transaction prescribed under clause (c) of subsection (5) shall ensure that the permanent account number or the General Index Register Number or the Aadhaar number, as the case may be has been duly quoted in the document.

8.   Quoting and Authentication of PAN in the Documents pertaining to prescribed Transactions [Section 139A(6A)]:

Every person entering into such transaction, as may beshall quote his permanent account number or Aadhaar number, as the case may be, in the documents pertaining to such transactions and also authenticate such permanent account number or Aadhaar number, in such manner as may be prescribed.

9.   Person receiving the document pertaining to prescribed transactions to ensure PAN or Aadhaar number has been duly quoted and authenticated [Section 139A(6B)]:

Every person receiving any document relating to the transactions referred to in section 139A(6A), shall ensure that permanent account number or Aadhaar number, as the case may be, has been duly quoted in such document and also ensure that such permanent account number or Aadhaar number is so authenticated.

 

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