CBDT prescribes penalty on failing to link PAN with Aadhaar by 31-03-22

Notification No. 17/2022, dated 29-03-2022

Every person who has been allotted PAN as of July 1, 2017, and is eligible to obtain an Aadhaar number shall link his PAN with Aadhaar. If such a person fails to do so, the PAN allotted to the person shall be made inoperative after the notified due date. The due date for such linking has been extended multiple times, and the latest date is 31-03-2022. If a person fails to intimate his Aadhaar after this date, he shall be liable for payment of fee under Section 234H.

The Central Board of Direct Taxes (CBDT) has notified the Income-tax (Third Amendment) Rules, 2022. The CBDT has inserted sub-rule (5A) in Rule 114 to provide that if a person intimates his Aadhaar number after the due date, then he shall be liable to pay a fee of:

(a) Rs. 500, if such intimation is made between 01-04-2022 and 30-06-2022; and
(b) Rs. 1,000, in all other cases.

Such fees shall be payable by the person at the time when the Aadhaar number is intimated.

Further, the Government has extended the due date for linking PAN with Aadhaar till 31-03-2022. However, no corresponding amendment has been made yet to Rule 114AAA, which provides that if an assessee fails to link his PAN with Aadhaar by 31-03-2020, the PAN shall become inoperative.

Now, the CBDT has substituted the date of 31-03-2020 with 31-03-2022 to remove ambiguity in the Rule.

Furthermore, sub-rule (2) of Rule 114AAA says that where a person is required to furnish, intimate or quote his PAN, and his PAN has become inoperative, it shall be deemed that he has not furnished, intimated or quoted the PAN. Consequently, he shall be liable for all the consequences for not furnishing, intimating or quoting the PAN.

The CBDT has inserted a proviso to Rule 114AAA(2) to provide that the board shall notify the date from which such consequences shall apply to a person.

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