In this article, Shitij Oberoi of VIPS discusses the legal consequences of having two PAN cards.

Purpose and Utility of PAN

Permanent Account Number popularly known as PAN card is used for the various purposes like opening any account with the bank, making transactions, credit facilities, loans or even as an ID proof but the most vital purpose of the PAN card is for the tax purposes. Income tax is filed by an individual with the help of the unique Permanent Account Number which is 10 digits alpha-numeric according to new series. An individual can also be a minor, company or body corporate in the name of whom a PAN can be issued.

After demonisation row linking of AADHAR card and PAN, card linking is made mandatory. The track is to be kept of users having different bank accounts on same PAN number and bank account is also to be registered with the PAN. Cash transaction above 2 lacs are also now prohibited. So PAN card is required for cheques and even for cash deposits. So in the above said situations PAN comes handy for the individual.

What are Multiple PAN or Duplicate PAN cards?

Multiple or duplicate cards are simply to say more than one PAN card or PAN numbers issued to the same individual.

Section 139A (7) Income Tax Act, clearly states that no individual shall apply, possess or obtain more than 1 permanent account number under the new series.

There can be a possibility that an Individual might be having more than 1 Permanent Account Number without being in his knowledge. But it is not illegal to have 2 Physical PAN cards of the same number, latter would be called as just a PAN’s copy.

So it is very important to know the circumstances and instances under which the person cannot possess multiple PAN, which are as follows

• Multiple application by one individual-  Let us assume and say if you have applied for a PAN via the online method and you have submitted the application and but it is taking too long for the PAN to reach you. The person who applied may think that there could be a technical jargon or application might have been rejected by online database due to various reason. Hence, the person applies for an offline mode to apply for PAN through physical form and submitting the same to the Assessing Officer. Now in this case later when he will receive both cards it would be having 2 different Personal Identification Number issued to the same individual. This is the case of multiple application by a person hence it is always advised to be patient and wait a bit longer before taking any further step.

• Change in the PAN details-  Change in the PAN can be like Address or Name. Generally, it is observed that after marriage women change their surname to husband’s family. So sometimes the applicant instead of giving application for change in the PAN they submit a new application for PAN which results in more than one PAN.
  Similarly, in the case of change in address it is many times observed that applicant files a new application. In the case of change in address it is not mandatory for a PAN holder to get it rectified but it is advisable that only the CORRESPONDING ADDRESS should be changed. The address change does not require a fresh PAN application hence it can be done on the existing PAN via the website or offline form method.
  

• Intent of the PAN holder- An individual who has deliberately obtained more than 1 PAN for the purpose of tax evasion, defrauding the tax agencies and government or to manipulate income etc falls in this category. These type of Individuals attract penalty and various other serious consequences.

Is it Legal?

The answer is straight and blunt ‘NO, it’s not‘. It is not only unethical but it is an offence as per the law with a liability of fine also.

Section 139A (7) Income Tax Act reads as: No person who has already been allotted a permanent account number under the new series shall apply, obtain or possess another permanent account number.

Section 272B of Income Tax Act talks about the imposition of the fine of Rs. 10,000, upon failure to comply with section 139A and moreover any person when asked to quote his Permanent Account Number and quotes false Permanent Account Number shall also be fined by the Assessing Officer.

Consequences and Legal Implications for having multiple PAN cards

As mentioned above Section 272B of IT Act imposes the penalty of Rs 10,000 upon the offender with intent to defraud. The Assessing officer after hearing the person who is to be penalized can fine him if he thinks that the person has done it for purpose of hiding income or tax evasion. [Section 272B(3)]. The opportunity of being heard is given to differentiate between a genuine case of omission where the PAN holder himself is not aware that he is possessing more than one PAN from those who intentionally do it.

Bank Credit/Loan– Since loan and credit facility require PAN is one of the required documents and any discrepancy in PAN can result is the rejection of the loan or credit facility. The bank classifies multiplicity of the pan as Intentional fraud which directly questions the person’s ability to repay the debt. Hence, they reject the application. This is not only construed as a financial fraud but has the potential to get all the credit access blocked despite having a good CIBIL score. CIBIL is basically the score of a debtor in repayment of loans and credit based on his past track records like timely payment of installments etc. A person with a bad CIBIL score also has a possibility to get a loan but once a person gets into the blacklist of a bank he will not get loan or credit under any circumstances. As of now the blacklist database is not shared among the banks but it is kept within the bank but once the Anti-fraud database is shared then he might not get the loan from any other bank also.

Other implications are that a person can be asked to surrender the duplicate or multiple cards to the assessment officer in whose jurisdiction the individual or assessee falls.

How to surrender the duplicate/multiple PAN?

Surrendering the card by the Individual in order to help the authorities would not amount to penalties unless there is some intentional fraud committed by that person. Surrender basically means to cancel and submission of that PAN which is not required. So Basically there are 2 methods to do it, namely manual/offline and online.

• Manual/Offline Method – Individuals seeking to surrender or change the details of the PAN can do so by filling PAN change request Application Form and submitting it to the assessment officer under whose jurisdiction the individual falls. In that form under column 11, an individual can mention the PAN which he wishes to retain and the one which he wishes to surrender. A copy of such PAN should also be submitted along with the application and after submitting the form the acknowledgement slip has to be retained for any future references and in case any dispute arises which will work as a proof of surrender of PAN. 

The form for cancellation can be downloaded from the following link.

• Online Method – The Individual can do so by logging on to the official site of the Income Tax Department which is  http://www.incometaxindia.gov.in/Pages/default.aspx  and filling in details of the Individual.like their name, address, DOB etc. Further, the individual has to mention details about the PAN he is willing to retain and the PAN he is willing to surrender. After submitting the application acknowledgement is received and an individual shall retain it for the future references. So through this online process surrender can be done.

Conclusion

So it is highly not recommended to have more than one PAN as it can lead to some serious consequences and can attract penal liability along with the fine imposed under the IT Act. So to aid the government and the tax authorities it is always advisable to surrender the PAN if there are more than one with the individual and in case if the holder is unaware of the fact that he is holding more than 1, then it should be surrendered immediately after the individual comes to know without any delay.

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