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CMA Intermediate · Direct and Indirect Taxation · PAN

Mr. Arun quotes a PAN in a prescribed document, knowing it to be false, on three separate occasions. Separately, Mr. Dev, who receives and must ensure correct quoting and authentication, fails to do so in two documents. Applying section 467, the maximum penalty the Assessing Officer may impose is:

Arun may be penalised Rs. 30,000 and Dev Rs. 20,000. Section 467(2) and 467(4) each impose Rs. 10,000 for each default, so three false quotings and two failures to ensure correct quoting are penalised separately.

  1. ARs. 30,000 on Arun and Rs. 20,000 on DevCorrect
  2. BRs. 10,000 on Arun and Rs. 10,000 on Dev
  3. CRs. 30,000 on Arun and Rs. 10,000 on Dev
  4. DRs. 50,000 on Arun and Dev together, as a single combined penalty

Explanation

Section 467(2) allows Rs. 10,000 for each default of quoting a false number knowingly, so 3 x 10,000 = Rs. 30,000 for Arun. Section 467(4) allows Rs. 10,000 for each default of the person responsible for ensuring correct quoting, so 2 x 10,000 = Rs. 20,000 for Dev. A single flat penalty would ignore the 'each such default' wording.

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