The finance ministry intends to use its power to grant Permanent Account Numbers suo moto only prospectively. Therefore, PAN would not be issued in assessment cases which were already under scrutiny.
The Union Budget had proposed introduction of a new sub-section (1B) of Section 139A under which an assessing officer would be empowered to allot a PAN to a person.
Officials said the power to allot PAN would come in handy in transactions reported under the Annual Information Returns (AIR). In the first year of the implementation of AIR, close to 30 per cent transactions reported were not accompanied by PANs.
Senior officials said the revenue department would also have to amend the existing income tax forms 60 and 61 pertaining to PAN as they did not have provision for a suo moto allotment of the number. The department is likely to issue a new form to incorporate this provision.
The revenue department is also trying to convince the states to use PAN under the Value Added Tax regime. This is part of a move to make PAN and the Tax Identification Number (TIN) the common identity for all taxpayers.
"While some states introduced PAN during the VAT registeration exercise, there are many which are yet to do so. We are working to ensure that all states use PAN under VAT," an official said.
Officials pointed out that PAN was also being used as a common denominator to prepare the country's first Business Register.
"The register, a kind of yellow pages for business, is being prepared by the ministry of statistics and programme implementation to provide a database to foreign investors who are keen to partner Indian firms," an official said.
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