Consequences of non-furnishing of PAN applicable from 01-04-2023: CBDT

Circular no. 7/2022, dated 30-03-2022

Sub-rule (2) of Rule 114AAA says that where a person is required to furnish, intimate or quote his PAN, and his PAN has become inoperative, it shall be deemed that he has not furnished, intimated or quoted the PAN. Consequently, he shall be liable for all the consequences for not furnishing, intimating or quoting the PAN.

Some of these consequences for not furnishing, intimating or quoting the PAN have been enumerated below:

(a) The tax shall be deducted at a higher rate in accordance with Section 206AA;
(b) The tax shall be collected at a higher rate in accordance with Section 206CC;
(c) Taxpayers will not be able to file the return of income. Consequently, he shall be liable for the consequences of non-filing of a return, inter-alia, payment of late fee under section 234F, interest under section 234A, forfeiture of current year’s losses, best judgment assessment, the penalty for concealment of income, prosecution for failure to furnish return of income, so on and so forth;
(d) A penalty under Section 272B shall be levied as such person shall not be able to comply with the provisions of Section 139A requiring him to quote his PAN in certain financial transactions, etc.

The Central Board of Direct Taxes (CBDT) vide Notification No.17/2022, dated 29-03-2022 has inserted a proviso to Rule 114AAA(2) to provide that the board shall notify the date from which such consequences shall apply to a person.

The CBDT has notified that all the consequences provided under the Income-tax Act for not furnishing, intimating or quoting PAN shall come into effect from 01-04-2023 if PAN becomes inoperative due to non-linking of it with Aadhaar.

However, the taxpayer is liable to pay fee of Rs. 500 or Rs. 1000, as the case may be, if PAN is linked with Aadhar from 01-04-2022 to 31-03-2023.

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