Tax Amendments | CA Intermediate | November 2023

Sr. No.

Level of Amendment

A.

Minor

Where a person, who has been allotted PAN as on 1.7.2017 and is required to intimate his Aadhaar number under section 139AA(2), has failed to intimate the same on or before 31.3.2022, the PAN of such person shall become inoperative, and he shall be liable for payment of fee specified under section 234H read with Rule 114(5A).

Where the person has intimated his Aadhaar number after 31.3.2022, after payment of fee specified under section 234H read with Rule 114(5A), his PAN would become operative within 30 days from the date of intimation of Aadhaar number.

A person, whose PAN has become inoperative, shall be liable for further consequences for the period commencing from the date specified by the Board till the date it becomes operative, namely –

(i) refund of any amount of tax or part thereof, due under the provisions of the Act shall not be made;

(ii) interest shall not be payable on such refund for the period, beginning with the date specified and ending with the date on which it becomes operative;

(iii) where tax is deductible under Chapter XVIIB in case of such person, such tax shall be deducted at higher rate, in accordance with provisions of section 206AA;

(iv) where tax is collectible at source under Chapter XVII-BB in case of such person, such tax shall be collected at higher rate, in accordance with provisions of section 206CC.

Rule 114AAA(4) provides that the provisions of sub-rule (3) shall have effect from the date specified by the Board.

Accordingly, the CBDT has, vide this Circular specified that the consequences specified above will be effective from 1.7.2023 and would continue till the PAN becomes operative by intimating Aadhaar number.

A fee of Rs. 1,000 will continue to apply to make the PAN operative by intimating the Aadhaar number.

However, these consequences of PAN becoming inoperative shall not be applicable to those persons who have been provided exemption from intimating Aadhaar number.