PAN are allotted without actual defacto verification - Delhi High Court
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Hon'ble Delhi High Court has delivered two judgements dated 22th November, 2013 and 28th November, 2013. In both the judgement the Hon'ble High Court had in clause 18 and clause 24 respectively made some remarks over the allotment of PAN and termed it as without de-facto verfification.
The relevant details of the judgement are as under:
Judgement pronounced on: 28th November, 2013
Income Tax Appeal (ITA) No. 2080/2010
Commissioner of Income Tax Versus N TARIKA Properties Investment (P) Ltd
Clause 24 or the Judgement:
Recently in the case of COMMISSIONER OF INCOME TAX VS NR PORTFOLIO PVT. LTD (INCOME TAX APPEAL NO. 1018 OF 2011 AND 1019 OF 2011) vide Judgment dated 22nd November, 2013 we have held that mere production of PAN Number or assessment particulars does not establish the identity of a person. The identification of a person includes the place of work, the staff and the fact that it was actually carrying on business and further recognition of the said company/individual in the eyes of public. We have further noticed that PAN Numbers are allotted on the basis of applications without actual de facto verification of the identity or ascertainment of the active nature of business activity. PAN Number is allotted as a facility to revenue to keep track of transactions. The PAN Number cannot be blindly and without consideration of surrounding circumstances treated as sufficiently disclosing the identity of the individual. Download the Judgement >>
Judgement pronounced on: 22nd November, 2013
Income Tax Appeal (ITA) No. 1019/2011
Income Tax Appeal (ITA) No. 1018/2011
Commissioner of Income Tax Versus N R Portfolio(P) Limited
Clause 18 of the Judgement:
In the remand report, the Assessing Officer referred to the provisions of Section 68 of the Act and their applicability. The word "identity" as defined, it was observed meant the condition or fact of a person or thing being that specified unique person or thing. The identification of the person would include the place of work, the staff, the fact that it was actually carrying on business and recognition of the said company in the eyes of public. Merely producing PAN number or assessment particulars did not establish the identity of the person. The actual and true identity of the person or a company was the business undertaken by them. This according to us is the correct and true legal position, as identity, creditworthiness and genuineness have to be established. PAN numbers are allotted on the basis of applications without actual de facto verification of the identity or ascertaining active nature of business activity. PAN is a number which is allotted and helps the Revenue keep track of the transactions. PAN number is relevant but cannot be blindly and without considering surrounding circumstances treated as sufficient to discharge the onus, even when payment is through bank account. Download the Judgement >>
