Appeal before CIT(A) sign and dating of appeal memo. Un dated and signed by scanned signature appeal memo are curable defects.

[C.A. DEV KUMAR KOTHARI]

Links:

Section 140, 246A, 249 of the income Tax Act, 1961.

Rule 45 of the income Tax Rules 1962.

Form 35 of the Income Tax Rules 1962.

Appeal before CIT(A):

An appeal before CIT(A) is required to be filed in form no. 35 which is prescribed under Rule 45 of the Income Tax Rules.

Rule 45:

Form of appeal to Commissioner (Appeals).

Appeal is to be filed in Form no. 35, it contains, inter alia details about assessee, the A.O., order appealed against, other pending appeals before CIT(A) ,statement of facts, and grounds of appeal. The form has to be signed at several places, and at last there is form of verification which is required to be signed, dated and place of signing is to be mentioned. As per Rule it must be signed by the person who is authorized to sign return of income under section 140, as may be applicable in the case of assessee.

Verification and signature:

The signature is to be made in natural way by a pen which usually contain ink which is not erasable. A digital signature (electronic signature) is not yet recognized for this purpose. Signature in form of rubber stamp of signature is also not permissible. Scanned signature is also not recognized.

Technical defects:

In case any appeal, application, petitions etc. is filed which suffers from any technical defect, then the applicant can rectify such defect. A technical defect or irregularity is not fatal to the petition, appeal etc. When a technical defect is rectified, it is assumed that corrected petition or appeal was filed and the filing relates back to the original filing. Sometimes a new set of documents may be filed, in that case also the new one replaces the old/ defective one. It is not that the new documents are a new appeal or petition.

It is always advisable to clearly mention in the covering letter or by way of note below the revised appeal or petition that the new document is being filed to remove technical or other defect in the originally filed appeal or petition.

Opportunity to remove technical defect:

The technical lapse can occur due to several reasons. Furthermore, the Rules and procedures are changed so frequently that one may not be fully aware of latest position. Therefore, it is advisable to seek opportunity to remove technical defects, if any, in documents while filing appeal. The request can be mentioned in covering letter or by way of note on accompanying documents as may be found suitable in any given case.

The authority concerned is also require to point out technical defects, if any, and to allow a reasonable opportunity to remove such defects within a reasonable time. This may be specifically provided or even in absence of specific provision, the rule of natural justice requires that the concerned authority should provide a reasonable opportunity.

Recent case before ITAT:

In Cairn Energy India West BV v. ADIT (ITA Nos. 86,457 & 459/Ahd./2010) decided on March 26, 2010 and reported as [2010] 3 taxmann.com 94 (Ahd. - ITAT) the appellant filed appeal on which date was not mentioned and the signature was not in natural manner. The signature was scanned signature, but it belonged to an authorized person who could sign return and thus could sign appeal documents. The appeals were filed timely. Thus there were only two technical defects or irregularities namely:

Form 35 was not signed in normal manner but was signed through scanned signature.

Form 35 was not dated.

(Per author- It is not clear from report but this can be a case that appeal documents were sent by email to signatory, who printed it , signed and then sent back scanned documents by email/ fax and those were filed, accidentally the date was not mentioned while signing. Or that some pages bearing signature of person were scanned and stored in computer and used for appeal documents).

During course of hearing assessee had filed another set of form 35 duly signed by pen of the authorized person in normal manner. These were filed to remove technical defect in form 35 originally filed and not as fresh appeal.

CIT(A) dismissed originally filed appeals as not signed and dated.

The CIT(A) also treated fresh set of form 35 filed during hearing as separate appeals and dismissed them for the reason that original demand notice was not filed with them. Learned CIT(A) ignored the fact that original demand notice was filed with the originally filed appeal and fresh form 35 was presented just to remove technical defect or irregularities.

On appeal Tribunal inter alia held as follows:

a. heard both the parties, gone through the orders of the authorities below and also perused the material placed before Tribunal.

b. It is pertinent to note that all the appeals were signed, filed in time and were in the prescribed form.

c. These forms were signed by the person who is duly authorized, though borne scanned - signature. (Per author- thus Tribunal considered documents duly signed).

d. The mere fact that the assessee has not stated the date in appeal (s) memo and appeals were filed by the scanned-signature, appeals can only said to be irregularity/defective and said irregular/defects was curable one.

e. It is well settled law that there may be a mistake or defect but once that defect is cured, it no longer persists and after curing of a defect the same can definitely be acted upon.

f. The Hon'ble Supreme Court in the case of Pannalal Brijlal vs. Union of India 1956 -TMI - 49665 - (SUPREME Court) observed that provisions of IT Act, 1961 should be applied in a humane and considered manner. Once the assessee has removed the defect, looking to the peculiar facts of all the three our opinion, the Learned CIT (Appeals) ought to have decided all the three appeals of the assessee(s) on merits instead of becoming hyper technical in procedural matter.

g. Once the assessee has filed fresh appeal (s) memo which borne the signature in ink, date and place, etc. the Learned CIT (Appeals) ought to have treated that defects removed.

h. Against one order, only one appeal can be filed alongwith the original notice of demand.

i. The Learned CIT (Appeals) in separate proceedings dismissed all the fresh three appeals on the ground that the assessee has not enclosed the original Notice of Demand. As a matter of fact, with the fresh memo, original notice of demand cannot be furnished because these were already furnished along with original appeal(s) memo.

j. The appeals originally filed by the assessee with the original notice of demand, in our opinion, are valid subject to removal of defect, if any, which the Learned CIT (Appeals) may point out.

k. Once the defect is removed, the Learned CIT (Appeals) clearly erred in dismissing the appeal(s) non est/invalid and dismissing in limine. Against one assessment order, assessee can file only one appeal. In these cases, both the assessees, can file only one appeal. In these cases, both the assessees, during the course of hearing of appeals, filed fresh memo of appeals. In our opinion, the sole purpose of filing fresh memos was to remove the defects. Therefore, the Learned CIT (Appeals) clearly erred in holding that fresh memo rectifying the defects filed by both the assessees shall form separate proceedings and shall be dealt with separately on merits.

l. Therefore, Tribunal set aside the impugned order (s) of the Learned CIT (Appeals) and directed him to treat that both the assessees have removed the defects by filing fresh memos, admit and decide all the appeals on merits in accordance with law after providing reasonable opportunity of being heard to both the sides.

Unnecessary litigation:

No doubt, there was some mistake and short comings in the appeal documents filed by assessee. However, it appears that learned CIT(A) , took very technical view on the matter. Learned CIT(A) should have allowed opportunity to the assessee to rectify alleged defects, and must have accepted the rectification and admitted appeal. Anyway when he considered the fresh appeal memo filed, as a separate appeal, then he should have returned the original demand notice to the assessee ( which were filed with original appeal) and allowed the assessee to submit the same in connection with the fresh Form 35 filed by the assessee. When the original demand notices were lying with CIT(A), how he could impose a condition to attach original demand notice with the fresh form 35? It is a clear case of high handedness on the part of the learned CIT(A). It is many times said by Courts that judiciary (first appellate authority is also in that category) is respected for the justice rendered and not for denying justice on technical or other petty grounds. The post of CIT(A) is very important in the course of rendering of justice to , if the CIT(A) deny the same on technical grounds, there will be delay in justice.

Practice support:

From this order and its back ground it is clear that a slight carelessness can be very costly as it will create uncertainties which can ultimately deny justice. In this case if the revenue involved is high, it is likely that the revenue may prefer appeal before the High Court. In the high Court also it is again a contingency, as to how judges will view the entire fact. One can take a view that a multinational company, which have engaged/ could have engaged capable counsels, how can file defective appeals and if the appellant is so careless, then why there should be any sympathy for them.

Therefore, to avoid contingencies, care should be taken to present appeal, petition etc. prepared as per prescribed form with necessary enclosures, signed , dated, stamped, fees duly paid, etc. as per latest applicable provisions of the relevant enactment and Rules. In the covering letter a prayer can be made to seek opportunity to rectify technical defects, if any. A paragraph can be added on the following lines:

Prayer for opportunity to rectify technical defects, if any:

We have taken utmost care in preparation of appeal memo and its enclosures, payment of appeal fees, signature, verification and incidental matters. We hope your good self will find the same in order. However, in view of fast changing legal position and complexity of law, and mistakes by human beings, if any mistake , omission, or other technical defect is noticed by your honor, we request you to kindly notify the same to us and allow as reasonable time and opportunity to remove such defects, if any.