The adjudication order is dated inside the one-year period in s.26(7), but the certified copy reached me weeks after it expired. Is the order time-barred?
No. The Madras High Court held that the one-year period in s.26(7) governs when the Adjudicating Authority must make its order, and that the order is made on the date it is passed and entered in the Authority's registers, not on the date a certified copy is prepared or despatched. Delay in preparing and communicating certified copies is a procedural lapse which does not postpone the date of making the order.
Decided by the High Court (R. Mahadevan J and Mohammed Shaffiq J, judgment delivered by R. Mahadevan J) on 2022-02-04, reported as W.A. Nos. 1682, 1846, 1847, 1848, 1850, 1851, 1853, 1873, 1878, 1890, 1894, 1941, 1990, 1991, 2022, 2130, 2134, 2150, 2165, 2179, 2184, 2185, 2189, 2191, 2205, 2224, 2231, 2232, 2244, 2305, 2350, 2353, 2403, 2405, 2410, 2411, 2416, 2418, 2422, 2428, 2434, 2502, 2504, 2506, 2507, 2508, 2509, 2510, 2675, 2686, 2697, 2701, 2706, 2707, 2715, 2716 and 2717 of 2021. It bears on section Benami s.26(7), section Benami s.26(3), section Benami s.24(1), section Benami s.11, section Benami s.2(9) of the Income Tax Act 1961, in How Tax Law Is Read and Appeals matters.
Adjudication orders signed at the very end of the s.26(7) window and served weeks later are common, and the limitation plea is the first one taken. This is the Division Bench answer to it, and it also draws the distinction a practitioner needs: the date of making governs the Authority's power, the date of communication governs your time to appeal.
Binding within that High Court's jurisdiction. Persuasive elsewhere.
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A search was carried out in 2017 at the premises of the Marg group and connected entities. On 26 April 2018 the Deputy Commissioner of Income Tax, as Initiating Officer, issued a show-cause notice under s.24(1) alleging that the respondents were benamidars for M/s Marg Limited in respect of 17.702 acres at Muttam Village, Nagore Vattam, purchased in 2009 and 2010. The Initiating Officer made references to the Adjudicating Authority on 27 July 2018 and the Authority took them on file on 1 August 2018, so that the one-year period under s.26(7) expired on 31 August 2019. The Authority issued its own notice on 14 August 2018, heard the matter and reserved orders on 17 July 2019, and pronounced orders on 26, 27 and 28 August 2019. Certified copies were made ready on 4 and 11 September 2019, booked for despatch on 12 and 13 September 2019, and collected by the respondents on 29 October 2019. By order dated 9 April 2021 a learned single Judge allowed the writ petitions, holding that the orders had not been passed within the s.26(7) period because the certified copies were prepared and certified only after 31 August 2019. The Authority and the Initiating Officer appealed.
The intra-court appeals were allowed and the order of the learned single Judge dated 9 April 2021 was set aside. The Court held that the adjudication orders were passed on 26, 27 and 28 August 2019, within the period prescribed by s.26(7), and that there had been compliance with the statutory provision (paras 13 to 15). The delay in preparing and notarising certified copies on 4 and 11 September 2019 was a procedural lapse which could not be understood as postponing the date of making orders validly passed (para 27). The concluding order records that the order of the learned Judge is set aside and all the appeals are allowed with the observations and directions given, without costs.
A plain reading of s.26(7) together with the dates on which the orders were passed showed compliance (para 14). The order sheet register and file movement register maintained in the Authority's office evidenced that the orders were passed on 26, 27 and 28 August 2019 under s.26(3) (para 15), entries in official registers being relevant under s.35 of the Evidence Act and official acts being presumed regular under s.114. The Court drew the distinction taken in Collector of Central Excise, Madras v M.M. Rubber and Co. and Chhattisgarh State Electricity Board v Central Electricity Regulatory Commission: for the authority exercising the power, what matters is the date the order is made and recorded; for the person aggrieved, limitation runs from communication, and Raja Harish Chandra Raj Singh, Assistant Transport Commissioner v Nand Singh and Ushaben v Kishorbhai Chunilal Talpada were applied to that second limb (paras 16 to 25). The doctrine of substantial compliance drawn from Commissioner of Central Excise v Hari Chand Shri Gopal was invoked (para 18). A period of about fifteen days between passing and despatch, taken up in preparing certified copies in triplicate, was held to be reasonable, and the assumption that such a period creates a possibility of the substance of the orders being modified was held to be rooted in suspicion and conjecture (para 28).
Resultantly, the order of the learned Judge is set aside and all the appeals are allowed with the aforesaid observations and directions.
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Handle my notice → Ask a CA on WhatsAppNo. The Madras High Court held that the one-year period in s.26(7) governs when the Adjudicating Authority must make its order, and that the order is made on the date it is passed and entered in the Authority's registers, not on the date a certified copy is prepared or despatched. Delay in preparing and communicating certified copies is a procedural lapse which does not postpone the date of making the order. This was decided by the High Court (R. Mahadevan J and Mohammed Shaffiq J, judgment delivered by R. Mahadevan J) and bears on section Benami s.26(7), section Benami s.26(3), section Benami s.24(1), section Benami s.11, section Benami s.2(9) of the Income Tax Act 1961. It is reported as W.A. Nos. 1682, 1846, 1847, 1848, 1850, 1851, 1853, 1873, 1878, 1890, 1894, 1941, 1990, 1991, 2022, 2130, 2134, 2150, 2165, 2179, 2184, 2185, 2189, 2191, 2205, 2224, 2231, 2232, 2244, 2305, 2350, 2353, 2403, 2405, 2410, 2411, 2416, 2418, 2422, 2428, 2434, 2502, 2504, 2506, 2507, 2508, 2509, 2510, 2675, 2686, 2697, 2701, 2706, 2707, 2715, 2716 and 2717 of 2021. Adjudication orders signed at the very end of the s.26(7) window and served weeks later are common, and the limitation plea is the first one taken. This is the Division Bench answer to it, and it also draws the distinction a practitioner needs: the date of making governs the Authority's power, the date of communication governs your time to appeal. If it applies to you, the first step is this: Ask for the Adjudicating Authority's order sheet register and file movement register; the date entered there is the date the Court treats as the date of making.
A search was carried out in 2017 at the premises of the Marg group and connected entities. On 26 April 2018 the Deputy Commissioner of Income Tax, as Initiating Officer, issued a show-cause notice under s.24(1) alleging that the respondents were benamidars for M/s Marg Limited in respect of 17.702 acres at Muttam Village, Nagore Vattam, purchased in 2009 and 2010. The Initiating Officer made references to the Adjudicating Authority on 27 July 2018 and the Authority took them on file on 1 August 2018, so that the one-year period under s.26(7) expired on 31 August 2019. The Authority issued its own notice on 14 August 2018, heard the matter and reserved orders on 17 July 2019, and pronounced orders on 26, 27 and 28 August 2019. Certified copies were made ready on 4 and 11 September 2019, booked for despatch on 12 and 13 September 2019, and collected by the respondents on 29 October 2019. By order dated 9 April 2021 a learned single Judge allowed the writ petitions, holding that the orders had not been passed within the s.26(7) period because the certified copies were prepared and certified only after 31 August 2019. The Authority and the Initiating Officer appealed. The matter was decided on 2022-02-04 by the High Court (R. Mahadevan J and Mohammed Shaffiq J, judgment delivered by R. Mahadevan J). On those facts the High Court held as follows. The intra-court appeals were allowed and the order of the learned single Judge dated 9 April 2021 was set aside. The Court held that the adjudication orders were passed on 26, 27 and 28 August 2019, within the period prescribed by s.26(7), and that there had been compliance with the statutory provision (paras 13 to 15). The delay in preparing and notarising certified copies on 4 and 11 September 2019 was a procedural lapse which could not be understood as postponing the date of making orders validly passed (para 27). The concluding order records that the order of the learned Judge is set aside and all the appeals are allowed with the observations and directions given, without costs.
A plain reading of s.26(7) together with the dates on which the orders were passed showed compliance (para 14). The order sheet register and file movement register maintained in the Authority's office evidenced that the orders were passed on 26, 27 and 28 August 2019 under s.26(3) (para 15), entries in official registers being relevant under s.35 of the Evidence Act and official acts being presumed regular under s.114. The Court drew the distinction taken in Collector of Central Excise, Madras v M.M. Rubber and Co. and Chhattisgarh State Electricity Board v Central Electricity Regulatory Commission: for the authority exercising the power, what matters is the date the order is made and recorded; for the person aggrieved, limitation runs from communication, and Raja Harish Chandra Raj Singh, Assistant Transport Commissioner v Nand Singh and Ushaben v Kishorbhai Chunilal Talpada were applied to that second limb (paras 16 to 25). The doctrine of substantial compliance drawn from Commissioner of Central Excise v Hari Chand Shri Gopal was invoked (para 18). A period of about fifteen days between passing and despatch, taken up in preparing certified copies in triplicate, was held to be reasonable, and the assumption that such a period creates a possibility of the substance of the orders being modified was held to be rooted in suspicion and conjecture (para 28). In the words reproduced by the source cited on this page: "Resultantly, the order of the learned Judge is set aside and all the appeals are allowed with the aforesaid observations and directions." The decision followed or applied Collector of Central Excise, Madras v M.M. Rubber and Co., (1992) Supp 1 SCC 471 — applied; Chhattisgarh State Electricity Board v Central Electricity Regulatory Commission, (2010) 2 SCC 79 — applied; Raja Harish Chandra Raj Singh v Deputy Land Acquisition Officer, AIR 1961 SC 1500 — applied to the date of communication; Ushaben v Kishorbhai Chunilal Talpada, (2012) 6 SCC 384 — applied; Commissioner of Central Excise, New Delhi v Hari Chand Shri Gopal, (2011) 1 SCC 236 — applied on substantial compliance.
It was decided by the High Court on 2022-02-04 and is reported as W.A. Nos. 1682, 1846, 1847, 1848, 1850, 1851, 1853, 1873, 1878, 1890, 1894, 1941, 1990, 1991, 2022, 2130, 2134, 2150, 2165, 2179, 2184, 2185, 2189, 2191, 2205, 2224, 2231, 2232, 2244, 2305, 2350, 2353, 2403, 2405, 2410, 2411, 2416, 2418, 2422, 2428, 2434, 2502, 2504, 2506, 2507, 2508, 2509, 2510, 2675, 2686, 2697, 2701, 2706, 2707, 2715, 2716 and 2717 of 2021. Binding within that High Court's jurisdiction. Persuasive elsewhere. A High Court decision binds the assessing officer, the Commissioner (Appeals) and the Income Tax Appellate Tribunal within that state, and is persuasive elsewhere. If your assessment is in a different jurisdiction, check whether your own High Court has taken the same view before relying on it. On section Benami s.26(7), section Benami s.26(3), section Benami s.24(1), section Benami s.11, section Benami s.2(9), the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the department, and it appears in this library for that reason — you need to know what the Assessing Officer will cite against you. The intra-court appeals were allowed and the order of the learned single Judge dated 9 April 2021 was set aside. The Court held that the adjudication orders were passed on 26, 27 and 28 August 2019, within the period prescribed by s.26(7), and that there had been compliance with the statutory provision (paras 13 to 15). The delay in preparing and notarising certified copies on 4 and 11 September 2019 was a procedural lapse which could not be understood as postponing the date of making orders validly passed (para 27). The concluding order records that the order of the learned Judge is set aside and all the appeals are allowed with the observations and directions given, without costs. It arises in How Tax Law Is Read and Appeals matters, on section Benami s.26(7), section Benami s.26(3), section Benami s.24(1), section Benami s.11, section Benami s.2(9) of the Income Tax Act 1961, and was decided by R. Mahadevan J and Mohammed Shaffiq J, judgment delivered by R. Mahadevan J. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Count the one-year period from the end of the month in which the reference was taken on file by the Authority, not from the date the Initiating Officer made it. Keep the communication date for its own purpose — your time to appeal to the Appellate Tribunal runs from it, and s.12(2) of the Limitation Act excludes the time taken to obtain the order. If the gap between passing and despatch is long enough to suggest the order was altered, plead the alteration specifically; suspicion about the gap alone was rejected here.
Searched for later treatment; none was found. That is not the same as a source affirming it. No decision applying, affirming, doubting or overruling this judgment was located, and no record of a special leave petition against it was found. It does not depend on Union of India v Ganpati Dealcom — it pre-dates the 23 August 2022 judgment — so the recall of that judgment on 18 October 2024 leaves it untouched. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
The continuous text at indiankanoon truncates at about para 28 or 29 of a judgment that runs to para 36, so the concluding directions were not read in sequence. The words of the final order set out above were located by searching within the same judgment and come back as the Court's own; what the 'aforesaid observations and directions' were could not be established, and a reader relying on this judgment should check whether any direction was given about the respondents' remedy before the Appellate Tribunal. The cause title above is taken from the case listing: indiankanoon's page title for this judgment reads 'The Adjudicating Authority vs /56', which is unusable, and the judgment's own cause title page was not within the text reached. Paragraph 18 also contains a passage on substantial compliance which a fetch returned to us only in paraphrase; it is described here, not quoted. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The intra-court appeals were allowed and the order of the learned single Judge dated 9 April 2021 was set aside. The Court held that the adjudication orders were passed on 26, 27 and 28 August 2019, within the period prescribed by s.26(7), and that there had been compliance with the statutory provision (paras 13 to 15). The delay in preparing and notarising certified copies on 4 and 11 September 2019 was a procedural lapse which could not be understood as postponing the date of making orders validly passed (para 27). The concluding order records that the order of the learned Judge is set aside and all the appeals are allowed with the observations and directions given, without costs.
TaxSphere, “Adjudicating Authority v Anuttam Academic Institutions”, https://taxnotice.vittsphere.com/caselaw/case/adjudicating-authority-v-anuttam-academic-benami-26-7-clock/ (validity last checked 2026-09-16)
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The High Court stopped the Adjudicating Authority from passing its order. Does the one-year limit in s.26(7) run out while the stay is on?
The benami show-cause notice came from an Initiating Officer in a city where neither the property nor my client sits. Does that matter?
A benami show-cause and attachment have come on the strength of one contractor's statement. Can I go to the High Court now?
The Adjudicating Authority has dropped my client as beneficial owner and recast him as an abettor, but kept the attachment on his own property. Can it?
