Thanks for ur reply. My query is not confined to cancellation of PAN being inadvertently alloted.
Suppose, a foreign nation who was working in India and having PAN is returning to his country with no plans to return. What procees he should follow to surrender his PAN?
15 May 2009
A suggested draft of letter for different possible circumstances for surrender of PAN is appended below. This can be modified suitably and only applicable sentences, clauses words, etc., can be given in the reply according to peculiar circumstances applicable in particular case.
Name and Address, etc.
To,
The A.O. ……
Kindly refer to your notice under section ........./letter dt. ......... bearing no. ........., seeking an explanation about non-filing of return of income and asking me to file return of income for assessment year…… In response thereto I would like to submit as follows :
Earlier I used to file a return of income because :
(i) I was working and had taxable income,
(ii) I used to carry some activity ......... as contractor, requiring filing of return and having PAN or income tax clearance certificate,
(iii) there was tax deducted at source and return was filed to claim refund,
(iv) I had suffered loss under some head of income (business/capital gains/house property) and therefore I filed return to claim benefit of carry forward, of loss,
(v) I was covered by provisions of the Act requiring to file a return of income - for example, under 1/6 criteria, etc.
However, since. I retired from service/discontinued business/or I am no longer required to file return of income due to change in facts and circumstances (surrender of telephone/surrender of lease hold residential place/office place ........., etc.) and/or change in law (amendments or discontinuation of 1/6 criteria, etc.).
I was not required to file my return of income for the year(s) for which you had asked explanation because:
(i) my total income was far below exempted income,
(ii) I have no claim for refund,
(iii) I have no claim for carry forward of loss,
(iv) I was not covered by 1/6 criterion.
To the best of my information there is no provision requiring me to file return of income even otherwise.
Therefore, I did not file a return of income. In fact, I was advised that in such circumstances the department does not accept return, even if a return is filed say by post or courier, and it is considered as non-est.
I am aged about ........... years and have only petty sources of income by which I am able to meet my personal expenses/in a joint family/with support of other family members.
Considering my activities and sources of income. I did not have any taxable income in subsequent years and I do not hope for my gross total income exceeding exempted amount in near future. Therefore, I request that my file may be closed.
I assure you that in future, if at any time my gross total income exceeds amount of exempted income (before deductions under chapter VIA), or for any other reason I
become liable to file a return of income/return of loss or return to claim refund, etc., I shall file my return of income as duty bound.
Kindly advise me if I have to surrender my PAN card.
Thanking you,
Assessee's name and signature
CC:
Concerned senior officers having jurisdiction :
The Commissioner of Income Tax …. . With request for necessary directions and/ or order.
The Joint Commissioner of Income Tax … -DO-
Voluntary letter to close file - Assessee can voluntarily write a letter, on the above line with suitable modifications, explaining circumstances and reasons for discontinued filing of the return and can request the A.O. to close the file and ask for surrender of the PAN card/or can send the PAN card for cancellation.
Suggested course of action by the Income Tax Department - In such cases the Income Tax Department should take a practical and result oriented approach. If after considering explanation and past records the A.O. is satisfied that the file should be closed, he may do so with consent of senior officers. In case he feels that an interview of the assessee is required before closing the file, the A.O. can request the concerned person to meet him and explain facts and circumstances with some documents like current balance sheet or statement of income and expenditure, bank statement, etc., to prima facie satisfy that the file deserves to be closed or to be continued. After such interview with concerned person (old assessee) a report can be prepared and file can be closed or the concerned person can be asked to file return and continue the file as may be considered proper.
If after considering explanation and past records the A.O. is satisfied that the file should be closed, he may do so with consent of senior officers.
In cases, where a decision is taken to close the file, the assessee can be asked to surrender his PAN card or it can be cancelled by an order in writing. Separate records for closed files and such surrendered/cancelled PAN cards can be kept.
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