Section 26 of the Benami Property Transactions Act, 1988 deals with adjudication of benami property. Sub-section (7) thereto reads the limitation for passing order. It states that no such order shall be passed after the expiry of one year from the end of the month in which the reference under sub-section (5) of section 24 was received.
The Madras High Court in  442 ITR 477 (Mad) delve with the subject of date of passing of order u/s26 and held that the provisions of section 26(7) are couched negatively to state that “no order may be passed” beyond the period of one year from the date in which the reference under sub-section (5) of section 24 was received. A burden is thus cast upon the adjudicating authority to ensure that the order was passed on or before period of limitation is set out in the statute, the same has to be adhered to strictly. The order, once passed, must leave the control of the authority who has passed such order, and it is only then can it be said to have been “passed” in satisfaction of limitation.
On the other hand the Court held that date of passing of the order should be construed as the date on which the order had come to the knowledge of the concerned person.
In this case orders were returned by the postal authorities and later they were collected by the assessee so that it was held that the date of passing of the order shall be the date of receipt of certified copies of the order.
Mere writing in the file that ‘order is passed accordingly’ is not good enough to suggest passing of order but it should be construed as the date on which the order has been dispatched by the registry. In this case on verification of records it was found that orders were dispatched after the date of limitation of one year.