PAN or Permanent Account Number is the unique identification number allotted to the tax payers or assesses in India. PAN is a mandatory requirement for filing income tax returns by any tax payer. All the tax related information pertaining to the tax payer is recorded against the PAN allotted to the respective tax payer. It is a unique number allotted to the taxpaying individuals or entities; hence, two persons cannot have same PAN. The card which is issued containing the number and identity details of the individual is called the PAN Card.
Prior to 1972, an assessed of the Income Tax Department was identified by a number called General Index Register Number (GIR No.). This number was allotted by the Assessing Officer to an assessed. It included the information of assesse as well as assessing Officer. The allotment of GIR number was a manual system and no. was unique only within a ward or under a particular assessing officer. It was not unique at country level. This resulted in errors and increased the chances of miscalculations during tax assessment.
To address this issue, Permanent Account Number was introduced in 1972. Initially, it was voluntary; however, allotment of PAN was made mandatory u/s 139A of the Income-tax Act, 1961 w.e.f. April 1, 1976. Earlier, the allotment of PAN was done manually. To avoid duplication, blocks of Permanent Account Number were allotted to each Commissioner of Income-tax by the Board. Permanent Account Numbers from these blocks were allotted by the commissioner to the assesse under various Assessing Officers in his charge. The system of manual allotment of PAN was continued till 1985.
After studying the system of identification number initiated in U.K. (National Insurance Number), USA (Social Security Number), Spain (Fiscal Identification Number), Australia (Tax File Number) etc. in 1995, this series was abandoned and allotment of current series of PAN was started. PAN is issued by the Income tax Department of India under the supervision of the Central Board for Direct Taxes (CBDT).