How PAN card of HUF be cancelled on partition
Querist :
Anonymous
(Querist) 13 November 2009
This query is : Resolved
PRD HUF is a firm possessing a valid PAN Card. Due to the age of the Karta, and since there being no male members except two daughters, the Karta desires that the firm be dissolve / partitioned before the death of the Karta and how to cancel the PAN Card issued by the Income Tax Authorities?
Vineet
(Expert) 13 November 2009
Dear Sir,
The facts are not very clear. HUF can never be a firm, it can be a partner in a firm represented by the Karta. Hence, in this case there will be two PAN, one for HUF and the other for Firm, both being two seperate legal juridical persons in the eyes of law.
The firm needs to be dissolved first and its registration cancelled (if registered firm) and necessary intimation to be given to the ITO to get the PAN cancelled. The ITO after verifying all the facts, pending matters and outstanding demands will take action in this regard. For further details please refer to section 189 of Income Tax Act.
I T Act does not recognise partial partition. Hence the partition of HUF should be total by metes and bounds in respect of property as well as persons. Once a partition has been effected, the assessing officer has to be notified about the same and he shall record a finding u/s 171 (3) of the income Tax Act and proceed acordingly.
Raj Kumar Makkad
(Expert) 13 November 2009
PAN can be got cancelled as soon as the HUF working as a partnership firm is dissolved. On intimating to concerned ITO, he shall cancel the PAN issued therein.
Sachin Bhatia
(Expert) 13 November 2009
Give an application along with an affidavit to ITO, he shall cancel the PAN number.
A V Vishal
(Expert) 14 November 2009
PAN can be cancelled if gross total income does not exceed the basic exemption limit. For this purpose, an application letter requesting cancellation of PAN and stating the reasons for it should be addressed to the income-tax officer (ITO) in whose jurisdiction your income is being assessed or may be assessed. You may also be required to furnish proof showing that the income is below exemption limit.
Apart from intimating the ITO, you will have to surrender your original PAN card for cancellation to any of the intermediaries who look after the task of issuing and maintaining the records relating to PAN such as UTI and NSDL. You will be required to fill a form, ‘Request for new PAN card or/ and changes or correction in PAN data’. Along with this form, the original PAN card and a letter requesting the concerned authority to cancel the PAN should be attached.
Vineet
(Expert) 16 November 2009
I respectfully disagree with replies of experts on this issue.
First of all HUF is not a firm which can be dissolved. I request the author of this query to please check the facts. HUF may be one of the partners of the Firm. A single legal entity cannot be assessed as two different 'persons' (in this case HUF and Firm)
There needs to be a total partition of the HUF to the satisfaction of ITO. Once ITO records the fact of partition of HUF, it ceases to exist as an assessee for Income Tax purposes and only thereafter, PAN can be cancelled.
Issuance and cancellation of PAN is no way related to taxable income. Any 'person' recognised under the Act can obtain PAN irrespective of income.
The process of cancellation of PAN is quite simple. You have to apply to ITO, who after verifying the genuineness of claim will take necessary action to get PAN cancelled in AIS database of Income Tax Department. And yes, NSDL has no role in cancellation of PAN which is a pure departmental function.
G V S Jagannadha Rao
(Expert) 16 November 2009
I agree with Mr. Vineet. I was however under the impression that partial partition is an incident recognised by law and therefore by ITO. Can you throw more light on this Mr. Vineet?
Querist :
Anonymous
(Querist) 17 November 2009
Many thanks Mr Vineet for your detailed reply
Vineet
(Expert) 17 November 2009
Dear Shri Rao
Partial partition is recognised by law and same was situation with Income Tax also. However, with effect from 1-1-1979, recognition to such partial partition was withdrawn and in all such incidences, the HUF would deem to continued to be assessed as joint family and each member of family immediately before such partition shall be jointly and severally liable for all the libilities arising on Direct Tax account.
Partial Partition has been defined in Act as partial as regards to persons constituting the HUF or the properties belonging to HUF or both.
For further details kindly refer to section 171(9) of Act.
