The problem posed by the reader is one of the many issues which have so far not been addressed by the Income-tax Department while introducing the new system of tax credit from assessment year 2008-09 with reference to the statement received by it from the deductors. Primarily, no machinery has been devised, where the taxpayer finds that he is not getting credit, though tax has been deducted at source. It may be due to the deductor either failing to deposit the tax deducted at source or not reporting the same in the statement furnished to the Income-tax Department. It will be the deductee, who has to fend for himself in such cases, while the power to enforce compliance in the event of failure of the deductor is on the Department. The deductee’s return will be processed by the computer requiring him to pay tax that has been deducted, but not covered by the statement, along with interest for short payment.
As regards the problems posed by the reader because of the requirement of the Permanent Account Number (PAN) of the payee, Sec. 139A does not require a person to apply for PAN, unless he is in business or profession with total sales turnover or gross receipts exceeding Rs. 5 lakh in any previous year. The assessing officer may allot the number under Sec. 139A(2) of his own accord. Sec. 139A(3) gives freedom to any person, who is not required to file an application, also to apply and get PAN. It follows that if a person is in receipt of any income from which tax is deducted, he can apply for PAN.
There appears to be no other way, unless the Department comes out with a system for giving credit for such persons on application by following the existing system of issue of tax deduction certificate in the case of persons, who do not have a number. This will be an easier course than loading the system with too many numbers which will make it unwieldy.