Indian Railway Reforms facilitates PAN card misuse
25/07/2012 13:53:42  ABGP Press Release; Courtesy:VSK Chennai

Memorandum submitted by Akhila Bharata Grahak Panchayat


AKHIL BHARATHEEYA GRAHAK PANCHAYAT(ABGP); An All India Consumer Movement ( Regn.No:S/9194,Delhi, having its branches in 30 states, submitted a memorandum to Hon.Minister For Railways,chairman-Railway Board and G.M.,S.Rlys'.

Copy of the Memorandums Hon.Minister For Railways,CC to Chairman,Railway Board and  to G.M.S.Rly., with ack. is attached, for ready reference.        

     * As per Commercial Circular No.5 of 2011 issued wide Letter No.2010/TG.1/20/P/Tatkal dt.28.01.2011, Tatkal tickets shall be issued only on production of one of the 8 prescribed proofs of Identity.One among them is PAN CARD.The details of the Identity proof shall be captured by the system and indicated on reserved tickets as well as on the reservation charts.
     * IR as per the above direction display PAN CARD DETAILS along with other details of reserved passenger's, in the reservation chart pasted outside the Coach.
        This practice has become a boon for benami transactions .In an attempt to combat black money, Government Of India by Finance Act 2012 has made it mandatory for certain traders like Jewellery dealers to collect tax (TCS) from customers on purchase of jewellery exceeding Rs.5 lakhs.

         While complying with TCS rules for collection, payment and uploading of TCS information (E-filing of TDS returns), Jewellery dealers have to furnish PAN of customers. For Certain customers,it is not convenient to provide PAN as they may have constraints in explaining the source.In such cases to accommodate high net worth customers,unscrupulous traders have an  easy source of benami PAN particulars from reserved railway passengers chart.

         After such illegal use of PAN CARD details of unconnected taxpayer, there is almost 6-12 months time for the PAN holder to know that a transaction of above nature has taken place in his name and only if he goes through Form 26.

         The Income Tax Department will first initiate action from the tax payer side asking him to prove that he /she has not carried on the above transaction.The onus lies on the genuine tax payer for fault committed by the traders.


     With the severity and urgency of the matter, ABGP requests that suitable orders may be passed at the earliest.

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30/07/2012 02:05:09
PAN holder v IR (contd)
Add-on to the earlier Post of today >
KEY NOTE: The following points require to be taken a special note of:
PAN is a creature of the IT Act.
It is a personal Id intended for and meant to be used only for the specified purposes of the Act (may be, as specially provided for the purposes of W T Act).In other words, for the specified tax authorities and for the purposes of the taxation alone the requirement of PAN is imposed; and only the said tax authorities can lawfully insist upon a taxpayer complying with the requirement, and within the parameters as mandated.
Accordingly, therefore, no other authority, statutory or any other, is empowered to compel any person to comply much less furnish the PAN by way of proof of personal identity or otherwise, for any of its own purposes, howsoever considered necessary or even justified.
The Act, before insertion of section 206AA, further makes it quite clear that the PAN calls for compliance only if a person is a taxpayer; that is, if he has income exceeding the threshold limit and liable to pay tax. As referred elsewhere herein, even after insertion of section 206 AA, the view the court has taken, in one’s opinion logically and rightly so, is that a person being a non-taxpayer even according to the Revenue is not obligated to seek and possess a PAN.
In short, no authority, other than income-tax or wealth-tax , has no power to require producing a PAN for any of its proposes. And the request or demand to the contrary is highly objectionable, and refused.
In cases where a taxpayer-PAN holder is, because of the requirement of the taxation law, obliged to furnish the allotted PAN to banks, invested -companies, etc., for genuine purposes such as TDS, registration of deed, so on, the responsibility is that of the Revenue to ensure that adequate security/foolproof safeguard is in place, so that the resulting exposure is nil or nothing but minimal.
29/07/2012 20:01:17
PAN Requirement for proving a citizen's identity :Has it not misfired , more so, -double barreled
To revert: According to information since gathered, the specific request made in the memorandum vide the penultimate paragraph therein has since been acted upon by the IR; as the input from a reliable source says:
This subject was discussed in the IRFCA [Indian Railway FANs' club forum] Forum many times. see thread:

However, the defect has long back, in May 2012, been rectified and orders issued by the Railway Board. Now only last five digits are shown of the id proof and it is also NOT indicated what type of ID is that.

Full discussion on the IRFCA forum:

In one’s perspective, however, the step taken by the Railways, though deserves to be commended, cannot at all be considered to provide a wholesome a solution, or an everlasting relief; that too in every other sphere or sector e.g banking . Unless and until the inherent unsavoury potentials of all such action or inaction on the part of any government or its authorities, or public bodies, requirement to furnish PAN being just one of them, are investigated into thoroughly and appropriate remedial measures taken / correctives measures plugged in.
28/07/2012 18:12:22
Misuse of PAN
No doubt, we live in times of supervening identity crisis; needs no special illustration or painful demonstration.

The 'bad practice',- more appropriate to dub it an evil and crooked practice, has been rightly criticized and brought up to the fore.
The problems found a specific mention are, truly speaking, not, in fact, two but one; at best, twins. The imponderable is more or less akin to that underlying the historical poser but eluding any answer; that is, - chicken or the egg, which one came first?

This is not a problem just confined to or to be identified as the offshoots of the so called Railways Reforms. But that has been often experienced before; for instance, in the most vulnerable banking sector as well.

Albeit, identical problems have come to surface on several occasions even before, ans also come to be taken a note of by the directly concerned Finance Ministry, which has never followed up by any matching plan of action / measures to curb the evil.

In one’s considered view, what is called for is not just what has been prayed for in the Memorandum. The problem requires to be taken on and suitably tackled that too on a war footing. Any sincere attempt to ward off perpetuation and proliferation of the grave predicament faced with should mainly come from the Finance Ministry, but in co-ordination and co-operation of every other Ministry.

There is no gainsaying that it is only those empowered and in governance, and they alone, who owe it to the People to do so.

27/07/2012 02:44:32
Bad laws, bad practises. How do we stop all this !
There are two problems with the system.

1. It is a hare-brained and blunderbuss scheme that makes PAN number declaration mandatory but without sound verification. Bonafide parties will give the correct number but the cleverer cheats will not. That means, IT department can catch only stupid cheats with this trap, besides causing widespread collateral damage. Stupid cheats are a rare breed indeed.

2. The Income Tax Department's approach of "shoot first" is wrong. As it is written:

The Income Tax Department will first initiate action from the tax payer side asking him to prove that he /she has not carried on the above transaction.The onus lies on the genuine tax payer for fault committed by the traders.

The above is wrong and ridiculously wrong. The Income Tax department should not harass people this way. How can anyone prove that they did not buy some jewelry ? Stupid indeed. Media should print the names of the babus and lawmakers who thought up this scheme.

Somebody please challenge such laws in court and get them struck out !
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