VittSphere ONE Calculators Blog CA Prabhakar Kumar · FCA · ICAI 560762
Case lawCBDT Circulars & Instructions › Statutory position — section 139A(5), rule 114B and Form 60: where PAN must be quoted, and the section 272B penalty of ten thousand rupees for each default
CBDT Circulars & InstructionsCuts both wayss.139As.139A(5)s.139A(6)s.139A(6A)s.139A(6B)s.272Bs.273Bs.2(30)s.50C

Statutory position — section 139A(5), rule 114B and Form 60: where PAN must be quoted, and the section 272B penalty of ten thousand rupees for each default

A penalty notice under s.272B says ten thousand rupees for each of dozens of defaults. Where is PAN actually required to be quoted, what does a person without one do, and is the penalty really per default?

A penalty notice under s.272B says ten thousand rupees for each of dozens of defaults. Where is PAN actually required to be quoted, what does a person without one do, and is the penalty really per default?

Rule 114B lists eighteen transactions in which every person must quote his permanent account number, from opening a bank account and buying a car to a sale or purchase of immovable property exceeding ten lakh rupees and any sale or purchase of goods or services exceeding two lakh rupees per transaction. A person other than a company or firm who has no permanent account number makes a declaration in Form No. 60 instead. Section 272B(1) charges ten thousand rupees for failure to comply with section 139A; sub-sections (2), (2A) and (2B) each charge ten thousand rupees 'for each such default', and no order under any of them may be passed without an opportunity of being heard.

Decided by the CBDT Circulars & Instructions (Not applicable — statutory text) on 2019-09-01, reported as Income-tax Act 1961, ss.139A(5) to (6B) and 272B; s.272B(2A) and (2B) inserted, and s.272B(2) amended, by Act No. 23 of 2019 with effect from 1 September 2019; Income-tax Rules 1962, rule 114B and Form No. 60. It bears on section 139A, section 139A(5), section 139A(6), section 139A(6A), section 139A(6B), section 272B, section 273B, section 2(30), section 50C of the Income Tax Act 1961, in Penalty, Cash Transaction Limits, TDS Defaults and How Tax Law Is Read matters.

Still good law. This is the statute and the rule, not a decision about them. Section 272B in its current five-sub-section form was read from two departmental pages stamped Year 2020 and Year 2023 which agree word for word, the earlier of the two carrying the three footnotes attributing sub-sections (2A) and (2B) and the amendments to sub-section (2) to Act No. 23 of 2019 with effect from 1 September 2019. Because no page carrying a stamp later than 2023 was located for section 272B, and none later than 2023 for section 139A, a subsequent amendment to either cannot be excluded. Rule 114B carries no year stamp, as no departmental rule page does. Eleven suffixed section 272B pages were probed, of which nine are archived pages of earlier vintages and two — the pages stamped Year 2020 and Year 2023 — print the current text; every archived page stamped 2018 or earlier prints superseded text. All eleven are listed in the editor note so that a later pass does not mistake an archived page for the current position.

Why it matters

Three practical points sit inside this scheme and each of them decides cases. First, the per-default language is not uniform. Section 272B(1), for failure to comply with section 139A, says simply 'a sum of ten thousand rupees'; sub-sections (2), (2A) and (2B) say 'a sum of ten thousand rupees for each such default'. Where the department multiplies ten thousand rupees by the number of deductees or documents, ask which sub-section it is acting under, because the words 'for each such default' appear in three of the four and not in the first. Second, the obligation under rule 114B is on the person entering into the transaction, not on the institution recording it, and the institution's separate duty is under section 139A(6) — to ensure the number has been duly quoted — and, for the transactions prescribed under section 139A(6A), to ensure it has been duly authenticated. Those are different duties with different penalties, and a bank or a registrar penalised under section 272B should establish which one it is said to have broken. Third, the escape hatch is Form No. 60, and it is narrower than it looks: the second proviso to rule 114B allows it only to a person 'not being a company or a firm' who has no permanent account number, and there is a separate limb for a foreign company with no Indian taxable income and no permanent account number entering a transaction at Sl. No. 2 or 12 in an IFSC banking unit. A minor without taxable income quotes a parent's or guardian's number. Note also the carve-outs: the rule does not apply to the Central Government, the State Governments and Consular Offices at all, and it applies to non-residents within section 2(30) only for the transactions at Sl. Nos. 1, 2, 4, 7, 8, 10, 12, 14, 15, 16 and 17. And note that section 273B is available: reasonable cause is a defence to section 272B, and the High Court has upheld its application where a deductor quoted invalid numbers supplied to him by his own deductees and corrected them as soon as the error was pointed out.

Binding on the department, not on the assessee or the courts. An assessee may rely on a circular that is beneficial to them.

Not yet CA-verified. This entry was found through the sources listed under the Sources tab, and the summary reflects what those sources say. Nobody has yet read the full judgment and signed it off. Check the source before relying on it.

Read aloud by your device. Press again to stop.

Related

Other authorities on the same sections.