List of 40k non-PAN deals drawn up in Vidarbha

Nagpur: As the income tax department gears up to issue seven lakh notices across the country, seeking explanation for transactions done without quoting permanent account number (PAN), a list of close to 40,000 persons has been drawn up by the Nagpur office. The office of Principal Chief Commissioner of
Income Tax here covers the entire Vidarbha region.

The income tax department has identified 14 lakh transactions in the country where PAN was not quoted, though it is mandatory for every deal over Rs50,000. Out of this, seven lakh have been found to be sensitive transactions on account of the value, for which the notices are being sent.

Nagpur's tally out of the seven lakh comes to 40,000. This is further divided into P1, P2 and P3 categories depending upon the amount involved in the deals. In the P1 cases, which have the highest value, notices will directly be sent through the Central Board of Direct Taxes (CBDT), followed by P2, which will be dealt at the local level. The P3 cases will not be touched at present, said a source in the department. However, the break-up of the P1, P2 and P3 cases was not readily available, an official said.

The process of issuing notices has already begun, said the source. The notices mention that the department can go ahead with the process of taxing the person on the basis of information with it. However, it also mentions that the persons can take advantage of the income disclosure scheme 2016 also. The scheme launched in June this year ends on September 30.

The information on non-PAN deals has been extracted from the annual information returns (AIR), which is a compilation of high value transactions. Certain categories of transactions, such as property purchases above Rs30 lakh, cash deposits in a savings bank over Rs10 lakh, or mutual fund purchases above Rs2 lakh, among others, are reported in AIRs. All the cases where PAN has not been reported in such transactions are being covered in the notices, said the source.

Even as the notices are linked with IDS 2016, it is learnt that there has been a poor response to the scheme. Tax practitioners have expressed concern over the move, saying that it is not proper to link the notices with disclosure scheme.

Chartered accountant and president of Nagpur Chamber of Commerce Limited (NCCL) Kailash Jogani said it amounts to indirect marketing of the scheme, which so far has found very few takers. "Let IDS be voluntary and department should not use arm twisting methods. The notice mentions that the person can take advantage of IDS. It also carries details of the scheme," he said.

"Both the actions should be separate. The department can go ahead with reopening returns in cases wherever it has a doubt. However, the notices seem to have been served in cases where the return cannot be reopened," said Jogani.