Finding a huge mismatch between number of Permanent Account Number (PAN) holders and number of tax return filings, government auditor CAG has asked the Income Tax Department to ensure that a single taxpayer is not issued multiple cards.
The Comptroller and Auditor General of India (CAG) report for 2010-11 on Direct Taxes, tabled in Parliament today, revealed that 958 lakh PANs were issued up to March 2010 but IT returns filed in the last fiscal were only 340.9 lakh.
The gap between PAN holders and the number of returns filed was 617.1 lakh, CAG said.
Suggesting the Central Board of Direct Taxes to identify the reasons for the gap and use the information to enhance the assessee base, CAG said it may be due to issuance of multiple PAN cards and death of some PAN card holders.
"The (I-T) Department needs to put in place appropriate controls to weed out the duplicate PANs and also update the position in respect of deceased assessees," the report said.
It further said that it is significant to note that the number of PAN card holders has increased by 117.7% between 2005-06 to 2009-10 whereas the number of returns filed in the same period has increased by 14.4% only.
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The total direct tax collection has increased by 128.8% during the period.
There has been a robust growth in collection of direct taxes in the last five years, as it increased from Rs 1,65,216 crore in 2005-06 to Rs 3,78,063 crore in 2009-10.
"It is should be the constant endeavour of the Department to ensure that the entire assessee base, once correctly identified is duly meeting the entire tax liability," CAG said.
PAN allotted to a taxpayer, is the unique identification number that helps track individual tax compliance.