2020 (7) TMI 716 - AT - Income Tax

Draft assessment order u/s 143(3) r.w.s. 144C - maintainability of the objection filed by the assessee under Form No. 35A - Form No. 35A filed by the assessee on 19.01.2018 was not verified as per the procedure laid down since the signature of the person on verification page in the said form was a copy of the original signature - dismissing the application in limine treating the Form No. 35A filed by the assessee as nonest held to be not sustainable - submitted by the appellant that at that relevant point of time since Mauritius was hit by a cyclone leading to heavy rainfall and causing devastating damage in the country, the Directors present in Mauritius were not available for signing and forwarding the original objections. To meet the deadline, therefore, the assessee got the original objections signed by one of its Director available at United States of America and filed the scanned copy HELD THAT - No observation as regards the reason explained by the assessee for filing the Form No. 35A with the scanned signature. Rather, we find that when the concerned Director was not available at Mauritius, the assessee with bona fide intention got the said form signed by the other Director of the company available in United States of America and filed the scanned document thereon in due date. Even it is a defect in the eyes of law, according to us, it is procedural defects and curable in nature, since procedures are handmade of justice. On this issue we have considered the judgment passed by the Hon ble Tribunal in the matter of MSM Satellite (Singapore) Pte. Ltd. vs. JCIT 2016 (10) TMI 1310 - ITAT MUMBAI Tribunal pleased to observe that when the Revenue is accepting the e-filing of documents then the rejection of the Form 35A submitted by the assessee is unsustainable in the identical issue. No merit in rejecting the Form 35A filed by the assessee and thus we quash the order impugned - we allow the submission of Form 35A filed by the assessee. The instant appeal is, thus, allowed with the direction upon the DRP to accept the original Form No. 35A submitted by the assessee - Assessee s appeal is allowed for statistical purposes

Summary

Issues Involved:
1. Validity of the Form No. 35A filed by the assessee with a scanned signature.
2. Procedural defects and their curability.
3. Acceptance of e-filing by the Revenue.
4. Timeliness of the order pronouncement in light of COVID-19 lockdown.

Issue-wise Detailed Analysis:

1. Validity of the Form No. 35A filed by the assessee with a scanned signature:
The assessee, a resident of Mauritius, filed its return of income declaring total income at Rs. Nil for the A.Y. 2015-16. The A.O. issued a draft assessment order computing income at Rs. Nil but disallowed short-term and long-term capital losses as non-genuine. The assessee filed an objection via Form No. 35A, but the DRP noted that the form was not verified as per the procedure since it contained a scanned signature. The DRP rejected the objection in limine, prompting the assessee to appeal.

2. Procedural defects and their curability:
The assessee argued that the scanned signature was due to a cyclone in Mauritius, which prevented the original signatories from signing. The assessee submitted that the procedural defect was curable and cited a similar case (MSM Satellite (Singapore) Pvt. Ltd. vs. JDIT(IT) Mumbai) where the Tribunal ruled that procedural defects are curable. The Tribunal agreed, stating that procedures are handmade of justice, and procedural defects, if any, are curable in nature.

3. Acceptance of e-filing by the Revenue:
The Tribunal noted that the Revenue has started accepting e-filing of documents and applications. It found that rejecting Form 35A due to a scanned signature was unsustainable, especially when the Revenue accepts e-filing. The Tribunal quashed the DRP's order and directed the DRP to accept the original Form No. 35A and proceed with the matter, giving the assessee an opportunity of hearing.

4. Timeliness of the order pronouncement in light of COVID-19 lockdown:
The hearing concluded on 08.01.2020, but the order was pronounced on 28.07.2020. The Tribunal addressed the delay, citing the nationwide lockdown due to COVID-19 as an extraordinary circumstance. Referring to the case of DCIT vs. JSW Ltd., the Tribunal excluded the lockdown period from the 90-day limit for pronouncement of orders. It emphasized that the lockdown was an unprecedented situation, disrupting judicial work, and thus, the delay was justified.

Conclusion:
The Tribunal allowed the appeal for statistical purposes, directing the DRP to accept the original Form No. 35A and proceed with the matter. It also addressed the procedural issue of delayed order pronouncement, considering the COVID-19 lockdown as an extraordinary circumstance.