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The Central Board of Direct Taxes (the CBDT) has accepted the Punjab and Haryana High Court verdict in Commissioner of Income Tax v. Superintendent of Police that the deductor of tax cannot be hauled over coals for quoting wrong Permanent Account Number (PAN) of payees in various periodic returns he is obliged to file, if such mistake is triggered by the negligence of the payees. As many as 196 wrong PAN was found in the returns but the deductor had not been remiss in depositing the tax deducted with the treasury.
On being told about the mistakes, the respondent had filed revised returns after getting in touch with the payees.
The High Court therefore took a charitable view of the respondent’s role in the saga as there were extenuating circumstances for condoning his mistake, set in motion as it was by the negligence of various payees.
The CBDT has now vide circular dated 20th December 2012 gracefully agreed to allow the same latitude generally in similar circumstances.
(The author is a New Delhi-based chartered accountant)
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