Old System of identifying Tax Payer
Earlier the tax payers were identified by their General Index Register (GIR) Number. This was essentially a manual system. The GIR number was unique only within an Assessing Officers Ward / Circle and not throughout the country which resulted in errors or the chances of miscalculations during tax assessment.
To overcome these shortcomings, Permanent Account Number (old series) was first introduced in 1972 and made statutory under section 139A of the Act with effect from 1st April, 1976.
Blocks of Permanent Account Numbers were allotted to each Commissioner by the Board. The Commissioners made the allotment of Permanent Account Numbers to tax payers under various Assessing Officers. Initially the allotment was made manually, and to avoid duplication, each ward/circle received a certain set of numbers. But this was abandoned due to a host of problems associated with it.
The PAN under old series failed to meet the desired objectives for following reasons:-
- There was no database maintained and hence multiple PANs were allotted to a taxpayer.
- The data captured under the computerized system was not structured and was limited to very few parameters – Name, Address, Status and designation of A.O.
- The allotment of PAN was not centralized – a tax payer could apply for allotment of PAN in different centers and get a distinct PAN from each center, due to which all India uniqueness could not be achieved.
- PAN was not permanent as jurisdiction of the tax payer was part of the PAN and, therefore, was prone to change with the change in jurisdiction.
Therefore, a new series of Permanent Account Number was devised which took care of the above limitations. Section 139A of the Act was amended w.e.f. 1.7.95 to enable allotment of PAN under new series to persons residing in areas notified by the Board. Applications for allotment of PAN under new series were made mandatory in Delhi, Mumbai and Chennai w.e.f. 1.6.96, and in rest of the country w.e.f. 11.2.98.