Filing Income Tax Form with scanned signature held procedural and curable defect

Filing Income Tax Form with scanned signature held only procedural defect and curable in nature. ITAT allowed Form 35A filed with DRP.

ABACUS Case Law Citation
ABCAUS 3353 (2020) (08) ITAT

Important case law relied upon by the parties:
MSM Satellite (Singapore) Pvt.  Ltd.  vs.  JDIT

In the instant case, the assessee had challenged the order passed by the Disputes Resolution Panel (DRP) under Section 143(3)of the Income Tax Act, 1961 (the Act).

The assessee was resident of a Foreign Country and had invested in  the share capital of Indian companies for capital gain opportunities. Upon scrutiny of the income tax return filed, the Assessing Officer (AO) issued the draft assessment order under Section 143(3) r.w.s. 144C of the Act computing income of the assessee at Rs. Nil.   

However, in the said draft assessment order the AO had considered the short term and long term capital loss as non-genuine and the same was, therefore, held as not allowable to be carried forward.

Being aggrieved by the draft assessment order, the assessee preferred an objection along with Form No. 35A before the DRP in respect of the variations proposed by the AO.

The DRP observed that the Form No. 35A filed by the assessee was not verified as per the procedure laid down since the signature of the person on verification page in the said form was a scanned copy of the original signature. 

With respect to the scanned signature in Form No. 35A, the assessee submitted that at that relevant point of time the foreign country was hit by a cyclone causing devastating damage in the country and the Directors present in that country were not available for signing and forwarding the original objections. 

It was explained that to meet the deadline, the assessee got the original objections signed by one of its Director available in other country and filed the scanned copy. Whereas the original documents were received by the assessee couple of days later.

The case of the assessee was that there was no difference between the scanned copy and the original. The assessee urged on the curability of the lapse/irregularity, if any, and requested to consider the original one. 

However, the DRP opined that the scanned copy of the signature has no legal sanctity. Furthermore, if scanned signatures are allowed as a mode of validation of the document, anyone can act on behalf of some other person by scanning others signature.

Therefore, the DRP did not found the plea of the assessee as acceptable and the same was rejected in limine.

The Tribunal observed that when the concerned Director was not available at the foreign country hit by a cyclone, the assessee with bona fide intention got the said form signed by other Director of the company available in other Country and filed the scanned document thereon in due date.

The Tribunal opined that even if it was a defect in the eyes of law, it was procedural defects and curable in nature, since procedures are handmade of justice.

The Tribunal noted that in an identical case the Coordinate Bench had held that when the Revenue is accepting the e-filing of documents then the rejection of the Form 35A submitted by the assessee was unsustainable.

Consequently, the Tribunal allowed the submission of Form 35A filed the assessee with direction to the DRP to accept the original Form No. 35A submitted by the assessee.

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