Rule 114 b of income tax act

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Rohit Prajapati (Querist)
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14 February 2016 Dear Sir/Ma'am,

What is the penalty for non fulfillment of Requirements of quoting PAN under rule 114B of Income Tax Act?? and who is liable to pay the same i.e. the buyer or seller ??
For example if i purchase goods worth more than Rs. 2 Lacs and seller does not mention my PAN in the document pertaining to the transaction then what will be the penalty and who will be liable in it??

Thanks in Advance!!!!

Suresh Ramaswamy

Suresh Ramaswamy (Expert)
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14 February 2016 Rule 114, A, B, C, of Income Tax Rule 1962 all arise on account of Section 139 A of the Income Tax Act which deals with Permanent Account Number (PAN) , its requirement and usage. The Penalty for violation of Section 139 A is provided in Section 272 B of the Income Tax Act 1961.

The provisions read that where a person fails to quote the PAN where required or quotes a wrong PAN he will punished with a penalty of Rs.10,000/- for each violation.

Coming to Rule 114B it say both for purchase and sale above the threshold the PAN should be quoted, therefore both the buyer AND seller are liable to quote their Pans and failure to do so will attract the penalty to the defaulter.

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Rohit Prajapati

Rohit Prajapati (Querist)
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14 February 2016 Thanks for the answer. But, if in any case, if it is not clear that who is the defaulter than who will be liable to pay penalty ?

Rohit Prajapati

Rohit Prajapati (Querist)
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14 February 2016 Thanks for the answer. But, if in any case, it is not clear that who is the defaulter, than who will be liable to pay the penalty ?

Suresh Ramaswamy

Suresh Ramaswamy (Expert)
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15 February 2016 If as the purchaser or seler you have disclosed your PAN and you have evidence to prove it, then no liability will arise on you. However, if there is no evidence you have to prove that you have not defaulted.

Rohit Prajapati

Rohit Prajapati (Querist)
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15 February 2016 Ok.Thanks for the answer.

Rohit Prajapati

Rohit Prajapati (Querist)
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16 February 2016 If E.C.C number is mentioned in the invoice which includes the PAN of the client, than in such circumstances will Rule 114B be attracted ? Is PAN to be seperately disclosed in the invoice ?

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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22 July 2025 Great question! Here’s a clear summary regarding Rule 114B of the Income Tax Rules and PAN quoting:

What is Rule 114B about?
Rule 114B mandates that any person entering into a transaction involving sale or purchase of goods or services exceeding Rs. 2 lakhs must quote their PAN (Permanent Account Number) in the documents related to that transaction.

Penalty for non-fulfillment (Section 272B of Income Tax Act):
If a person fails to quote PAN where required or quotes an incorrect PAN, a penalty of Rs. 10,000 can be imposed for each such failure.

Who is liable to pay penalty?
Both buyer and seller are required to quote their PAN on applicable transactions.

The person who defaults in quoting PAN is liable to pay the penalty.

If it is unclear who the defaulter is, then each party must prove they had quoted PAN to avoid penalty.

If no proof is available, both can potentially be liable.

Regarding your question about quoting PAN via ECC number:
If ECC (Excise Control Code) number is mentioned and it includes the PAN of the client, then that may be treated as quoting the PAN.

However, it’s better practice to separately mention the PAN in the invoice or transaction documents to clearly comply with Rule 114B.

Relying solely on ECC might cause ambiguity during scrutiny.

Summary:
Penalty is Rs. 10,000 per violation.

Both buyer and seller must quote PAN for transactions above Rs. 2 lakh.

Defaulter pays the penalty, or if unclear, both must prove quoting PAN.

Separate clear mention of PAN is recommended over relying on ECC number alone.

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