Fire In The Frying PAN

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: According to reports, Parliament’s Public Accounts Committee has been scathing in its comments on permanent account number (PAN) allotments. Four hundred and one cities are ostensibly linked on the PAN network, but processing through networks takes place only in 60. In cities that aren’t networked, finance ministry has no figures on how long it takes to get PAN. In April 2001, backlog of PAN applications was 23,56,002. Apparently, 14,08,924 of these were “core deficiency cases”, meaning, applications were defective.

Finance ministry judges success by expressing PAN allotments as percentage of valid applications, not total applications. So what happens to defective applications? Are applicants informed about defects or their applications simply ignored? One doesn’t know.

I have become personally interested in PAN. First, let me give you a longish quote from the Kelkar Task Force’s report on Direct Taxes. “A person leaving India by land, sea or air is required to obtain from the Competent Authority a certificate that he has no liabilities under the direct tax laws or that he has made satisfactory arrangement for payment of his existing liabilities as also for payment of the tax that may become payable by him. The persons requiring income tax clearance are those: (i) not domiciled in India provided they have stayed in India over a period of 120 days. Generally, a person holding a foreign passport is considered as not domiciled in India; (ii) domiciled in India at the time of departure but — (a) intends to leave India as an Emigrant; (b) intends to leave India on a work permit for employment or occupation abroad; or (c) in respect of whom income tax authority considers that a clearance is necessary... However, over time the machinery for issuing such clearances has degenerated often leading to complaints of harassment and unethical behaviour...It is also learnt from a cross section of officers and staff in the Department that they have yet to come across any case where such a clearance has facilitated recovery of taxes.”