CBDT clarifies on interchangeability of PAN and Aadhaar

It is just a question of providing an additional facility to the taxpayer that if he is not quoting PAN and only has Aadhaar, his filing and processes do not get affected, said CBDT chief.

Illustration: Uttam Ghosh/Rediff.com

The taxman will "suo motu" allot a fresh PAN to a person who files I-T returns with only Aadhaar as part of a new arrangement to link the two databases, the CBDT chief said after the Budget proposed that only the biometric ID is enough for tax purposes.

The PAN (permanent account number) is "certainly not dead" and the recent Budget announcement of interchangeability of the two databases is an "additional facility" to ensure their linkage, which is now mandatory under the law, Central Board of Direct Taxes (CBDT), chairman, Pramod Chandra Mody, said.

"In cases where Aadhaar is being quoted and PAN is not there, we could possibly think on the terms of allotting a PAN to the person (who is filing income tax return)," he told PTI in an interview.

Mody was asked if the Income Tax (I-T) Department issued permanent account number will be dead after Finance Minister Nirmala Sitharaman in her Budget speech announced that PAN and Aadhaar are being made interchangeable as the government will allow those who do not have PAN to file I-T returns by simply quoting their Aadhaar number and also, use it wherever they are required to quote PAN.

“This is a wrong way of looking at the issue. PAN is certainly not dead. PAN is very much alive.

“It is just a question of providing an additional facility to the taxpayer that if he is not quoting PAN and only has Aadhaar, his filing and processes do not get affected," Mody said.

The assessing officer of the department will use his powers to allot PAN to an entity, he said.

"The law provides that the assessing officer can suo motu also allot PAN. So, if Aadhaar is being quoted without PAN, I give him the PAN. It becomes linked," the CBDT chairman said.

'Suo motu' is a Latin word that means 'on its own motion'.

Linking of the two databases is now compulsory and backed by law, the CBDT boss said.

While Aadhaar is issued by the Unique Identification Authority of India (UIDAI) to a resident, PAN is a 10-digit alphanumeric number allotted by the tax department to a person, firm or entity.

Tax experts said the assessing officer of the department is empowered under Section 139 of the I-T Act to suo motu issue a PAN to anyone whom they deem appropriate should have the ID, from the point of view of their financial transactions profile.

Both the I-T department and the UIDAI have linked their PAN and Aadhaar databases, so having the latter's data will enable the taxman to get vital identity information of the individual to simply allot a new PAN without any hassle and quickly, the experts said.

Aadhaar holds all vital information of an individual like name, date of birth, gender, photo and address, and also biometrics.

The same set of information is required to get a new PAN.

Currently, while over 120 Aadhaar numbers have been issued in the country, about 41 crore PAN numbers have been generated.

Out of these, 22 crore PANs are linked with Aadhaar.

Section 139 AA (2) of the I-T Act stipulates that every person having PAN as on July 1, 2017, and eligible to obtain Aadhaar, must intimate their Aadhaar number to tax authorities.

After the Supreme Court upheld the section 139AA, the government in March this year declared that the deadline for linking PAN-Aadhaar was available till September 30.

The apex court, in September last year, had declared the Centre's flagship Aadhaar scheme as constitutionally valid and held that the biometric ID would remain mandatory for filing of I-T returns and allotment of PAN.