As per the Indian IT Act 2000, digital signature certificates are accepted at par with handwritten signatures. Any electronic document that has been digitally signed, is legally valid, and is treated at par with the physically signed paper document. Therefore, Digitally Signed Form 16 has the same legal validity as a physically signed Form 16.
The Income Tax Circular No. 2/2007 dated 21/5/2007 provides details on signing form 16 with Digital Signatures, which can be viewed here: law.incometaxindia.gov.in/dittaxmann/circular/cir2_2007.htm
ACE Technology provides a userfriendly software - FileSigner Pi, which provides facility to Sign Form 16 with Digital Signature Certificates, in bulk, in a very easy to configure and easy to use way. For more infomration or free demo, you may contact ACE Technology on acetechnology.co.in or 022 - 2876 3744 who issue legally valid Digital Signatures and software.