TMI Blog2012 (6) TMI 451X X X X Extracts X X X X X X X X Extracts X X X X ..... le to persons and read down from the Statute for whose income is less than the taxable limit. Banking and financial institutions shall not invariably insist upon PAN from such small investors as well as from persons who intend to open an account in the bank or financial institution. - WRIT PETITION Nos. 12780-12782 of 2010 (T) - - - Dated:- 5-6-2012 - HULUVADI G. RAMESH, J. ORDER 1. These petitions have been filed seeking for a declaration that S.206 AA of the Income Tax Act, 1961 is unconstitutional and for costs. 2. It is stated, petitioners are small investors. For depositing their savings out of their meagre income, they approached respondents 3 and 4, for earning better interest/returns. They do not have any source of i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... who do not have assessable income are now compelled to obtain PAN or otherwise, the tax could be deducted as specified. 5. The grievance of the petitioners is, such a provision would cause great hardship and inconvenience. The introduction of S.206AA is arbitrary and violative of Art. 14 of the Constitution and accordingly, they pray to strike down the very S.206AA of the Act as unconstitutional. 6. Heard the Sr.Counsel representing the petitioners and the counsel representing the respondents. 7. It may be relevant at this juncture to extract the provisions of S. 139A(1) and S.206AA of the Act which read: S.139A(1):: Every person- ( i ) if his total income or the total income of any other person in respect of which he is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny declaration becomes invalid under sub-section (2), the deductor shall deduct the tax at source in accordance with the provisions of sub-section (1). (4) No certificate under S.197 shall be granted unless the application made under that section contains the PAN of the applicant. (5) The deductee shall furnish his PAN to the deductor and both shall indicate the same in all the correspondence, bills, vouchers and other documents which are sent to each other. (6) Whether the PAN provided to the deductor is invalid or does not belong to the deductee, it shall be deemed that the deductee has not furnished his PAN to the deductor and the provisions of sub-section (1) shall apply accordingly. 8. The very intent of S.206AA is to make it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urity for their future. 9. The difficulty expressed by the petitioners and similarly placed persons is, imposing condition to invariably go for PAN as per S.206AA would run contrary to S. 139A of the Act. It is also their grievance that filing Form 15G to seek exemption from deduction of income tax at source, also is not accepted by the 3rd and 4th respondents and acted upon unless the PAN is produced. 10. S.139A which is introduced way back in April 1991 is in vogue and this provision stands the scrutiny of Art. 14 of the Constitution for reasonableness. But, S.206AA which is contrary to S.139A appears to be discriminatory as if it is over riding S.139A introduced earlier. Though the intention of the Legislature is to bring the max ..... X X X X Extracts X X X X X X X X Extracts X X X X
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