No Timeframe For Cancelling Duplicate PAN Can Cause Hardship To Taxpayers: Delhi High Court

The Delhi High Court has observed that the absence of a prescribed timeframe for deciding applications seeking cancellation of duplicate Permanent Account Numbers (PANs) may cause hardship to taxpayers, particularly in relation to filing Income-Tax Returns and availing services linked to PAN.

The Division Bench of Chief Justice Devendra Kumar Upadhyaya and Justice Tejas Karia was dealing with a PIL seeking directions to the authorities to prescribe a timeframe for deciding applications for cancellation of duplicate PANs.

Petitioner's case was that Section 139A(7) of the Income Tax Act, 1961 provides that a person can be allotted only one PAN and cannot apply for, obtain or possess another PAN. Where a person is allotted more than one PAN, the additional PAN is required to be surrendered.

Petitioner relied upon CBDT Circular No. 7 of 2022, concerning linking of PAN with Aadhaar, and submitted that where a person possesses more than one PAN, the additional PAN has to be surrendered before the PAN retained by the person can be linked with Aadhaar.

It was further submitted that neither the Income Tax Act nor any CBDT circular prescribes a specific timeframe within which an application for cancellation or surrender of a duplicate PAN has to be decided by the Assessing Officer.

Petitioner had also obtained information from the CBDT under the Right to Information Act, 2005, but the response did not specify any timeframe for deciding such applications.

The Revenue submitted that the relief sought in the PIL, insofar as it sought prescription of a definite timeframe, was essentially in the nature of a request for amendment or modification of the applicable rules and administrative framework.

It also stated that it was equally concerned that applications for cancellation or surrender of duplicate PANs should not remain pending for an unduly prolonged period and ought to be examined and decided by the competent authority expeditiously.

The Court observed,

"The absence of such a timeframe may cause hardship to taxpayers during the pendency of their applications, particularly in relation to the filing of Income-tax Returns and the availing of services linked to the PAN."

However, it noted that Petitioner had not submitted any representation to the CBDT before approaching the Court.

As such, the Court permitted Petitioner to submit a detailed representation to the CBDT within two weeks, setting out the difficulties arising from the absence of a prescribed timeframe.

CBDT has been asked to consider the representation and take an appropriate decision in eight weeks.

For Petitioner: Advocates Rajat Gupta, Kanika Gupta, Garima and Divya, 

For Respondents: Advocates Rakesh Kumar, SPC with Sunil, Gopesh Jindal and Shivani Sethi, Advocates for R-1 & R-2 / UoI; Advocates Indruj Singh Rai, SSC with Sanjeev Menon, Rahul Singh, Priya Sarkar, JSCs; Gaurav Kumar and Prateek Bhati