Issues regarding PAN allotment
For filing of return, it is mandatory to have PAN.A person applying for PAN has to give his details in a prescribed form & the same will be allotted to him by the Income Tax Department. Earlier, when the assessee identification system was based on “GIR Number” i.e.”General Index Register Number” that used to be allotted, “Free of Cost”, by the concerned Income Tax Officer who had a jurisdictional authority to assess the assessee.
Later on this was switched over to the era of “Permanent Account Number”, under the authority of new Section 139A, substituting the old one, by Finance Act, 1995,with effect from 1-7-1995 and by insertion of New Rule 114, by replacing the old Rule 114, with effect from 1-4-1976.
Due to the some reasons, this function of receiving applications and allotment of Permanent Account Number and issue of PAN Card transferred to NSDL. With this switch over, now the applicants were required to pay requisite amount, as prescribed by the authorities, along with the PAN application.
Making an application for allotment of the Permanent Account Number and incurring “COST” for that is “unfair and unjust” to the applicant. It is the proprietary/statutory function of the Income Tax Department to allot the same “Free of Cost”, as the same has been the normal part of its function, empowered by the Income-tax Act, 1961.
Moreover, there are some hardships being faced by the persons applying for PAN. One of the hardships is that the allotment of PAN is not done in a timely manner. Though there is no time limit prescribed under any of the provisions of Income-tax Act regarding issuing PAN & PAN card but it is essential for the Income Tax Authority to issue PAN & PAN card within a prescribed time period- In the case of The Honorable Calcutta High Court in the case of Chandrakant Kandalal Sheth vs. Union of India & Ors. [255 ITR 407] it has been held that three months period can be construed as the maximum time period for issuance of PAN & delivery of PAN card & if the concerned authority finds that PAN cannot be given quickly, it must give the reason therefore at the earliest.
It is suggested that :
a) The person entrusted with the work of verification should possess sufficient knowledge & understanding of the provisions of the Income-tax Act so as to complete the assigned work in a timely manner.
b) If the application of the applicant is withheld by NSDL, NSDL should inform the applicant the reasons thereof.
c) If there are any queries/doubts regarding details provided in form no. 49A, NSDL should clarify the same with the applicant.
d) CBDT should fix a time limit for issuance of PAN & delivery of PAN card & also should take appropriate actions against undue delays in allotment of PAN.
Source- Pre-budget Memorandum 2014 on direct taxes by ICAI