The section 139A from the Income Tax Act, 1961 lays out the answers to all legal questions that can be asked about the functioning of PAN card, right from the application for the same, to the penalty of using multiple PANs. The section defines as to who can apply for a PAN card, what all is required for someone to be able to apply for PAN, how the allotment of PAN is to be done, the transactions and business dealings where the parties involved should declare their PAN, how PAN is to be used in TDS certificates and returns, conditions that one individual can possess one PAN, and how an application for PAN allotment is to be made.
Rule number 114 in the Income Tax Rules, 1962 lays down the manner in which PAN application is to be made. In 2003, this rule got amended and also defined the guidelines about the documents whose copies are to be submitted as proofs of identity and address, along with the application for a PAN.
Rule number 114B presents a list of all those transactions in which a PAN number should be quoted. For all those who do not have a PAN, there is a provision that they can furnish a declaration in form number 60. Also, rule number 114C enlists all those persons for whom the section 139A does not hold. Such persons exempt from compulsory quoting of PAN are those who can furnish form 61 to show agricultural income, and Government bodies and Consular Offices, when they are making the payments.
Under section 272B, a penalty of Rs 10,000 can be levied on defaulters who fail to comply with the guidelines in Section 139A.