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CMA Intermediate · Direct and Indirect Taxation · PAN

Ms. Kavya, eligible to obtain Aadhaar, holds a PAN but has not intimated her Aadhaar number to the prescribed authority. Which consequence follows under section 262(6)?

Her PAN is made inoperative in the prescribed manner. Section 262(6)(b) provides this consequence when an Aadhaar-eligible PAN holder fails to intimate the Aadhaar number; the PAN is not cancelled, and a fresh PAN cannot be obtained.

  1. APenalty of Rs. 10,000 applies automatically with no other effect
  2. BHer PAN is cancelled permanently and she must apply for a new one
  3. CHer PAN is made inoperative in the prescribed mannerCorrect
  4. DNothing happens unless she files a return of income

Explanation

Section 262(6)(a) requires a PAN holder eligible for Aadhaar to intimate the Aadhaar number. Under 262(6)(b), failure to do so results in the PAN being made inoperative in the prescribed manner. The Act says inoperative, not cancelled, and a new PAN cannot be obtained because of 262(8).

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