Penalty for failure to comply with various provisions of Permanent Account Number (PAN) – Section 272B
The penalty provisions of section 272B of the Income Tax Act gets attracted in case the person fails to comply with various provisions of the Permanent Account Number as prescribed under section 139A of the Income Tax Act.
Most of us are well aware that the ‘Permanent Account Number’ is a ten character alphanumeric identifier which is being issued by the Income Tax Department. Section 139A covers the provisions relating to the ‘Permanent Account Number’. In case the person fails to fulfil the provisions of section 139A, then such defaulter would be liable to pay the penalty under section 272B.
The present article explains the applicability of penalty provisions of section 272B; the relevant provisions of section 139A and amount of penalty payable under section 272B.
Applicability of penalty provisions of section 272B of the Income Tax Act
The provisions of section 272B get applicable under any of the below circumstances –
1. The person fails to comply with the provisions of section 139A of the Income Tax Act; or
2. The person quotes false Permanent Account Number (PAN) or Aadhaar number in any documents referred to in section 139A (5) (c); or
3. The person intimates false Permanent Account Number (PAN) or Aadhaar number as required under section 139A (5A) or section 139A (5C); or
4. The person fails to quote the Permanent Account Number (PAN) or Aadhaar number in any of the documents referred to in section 139A (6A); or
5. The person fails to ensure that the Permanent Account Number (PAN) or Aadhaar number has duly been quoted in documents relating to the transactions referred o in section 139A (5) (c); or
6. The person fails to ensure that the Permanent Account Number (PAN) or Aadhaar number has duly been authenticated in respect of section 139A (6A).
Thus, in case of any of the above default, the defaulter would be liable to pay the penalty under section 272B.
Understanding the relevant provisions of section 139A –
As per section 139A (1) the Income Tax Act, the following categories of persons are required to apply for Permanent Account Number –
- The person whose total income during any previous years exceeds the maximum amount which is not chargeable to tax.
- The person (carrying on business / profession) whose total sales / turnover / gross receipts is likely to exceed INR 5 Lakhs in any previous year.
- The person who is required to file a return of income under section 139 (4A).
- The employer who is required to file a return of fringe benefits under section 115WD.
- The resident (other than an Individual) who enters into a financial transaction of an amount aggregating to INR 2,50,000 or more in a financial year.
The managing director / director / trustee / partner / author / karta / chief executive officer / principal officer / office bearer of such person is also required to obtain Permanent Account Number.
Further, it is important to understand provisions of section 139A (5A) which states that the deductee (i.e. the person receiving sum / income on which TDS is deductible) needs to intimate the Permanent Account Number to the deductor (i.e. the person liable to deduct TDS).
It is also important to understand provisions of section 139A (5C) which states that the buyer / licensee / lessee referred under section 206C needs to intimate the Permanent Account Number to the Collector (i.e. the person liable to collect TCS).
Amount of penalty payable under section 272B of the Income Tax Act –
In case any default, as listed above, the Assessing Officer can direct the defaulter to pay the penalty of INR 10,000 for each of the default.
The provisions of section 272B (3) mandate that before passing an order for imposing a penalty under section 272B, the defaulter should be given an appropriate opportunity of being heard.
However, it is important to discuss here that, in case the defaulter proves the reasonable cause of the failure, then no penalty can be imposed under section 272B (as per provisions of section 273B).
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