The Delhi High Court has set aside seven orders passed by the Income Tax Appellate Tribunal (ITAT) in matters concerning Patanjali Ayurved Limited, finding serious procedural irregularities and a lack of proper reasoning in the Tribunal’s orders.
A Bench comprising Justice Dinesh Mehta and Justice Rajneesh Kumar Gupta pronounced the judgment on September 10, 2026. The Court directed that the appeals be heard afresh by a different ITAT Bench.
Background of the Case
The proceedings arose from a search conducted between October 31 and November 3, 2018, in the Hawala Traders Group, following which proceedings under Section 153C of the Income Tax Act, 1961 were initiated against Patanjali Ayurved Limited.
The dispute covered assessment years 2013-14, 2014-15, 2015-16 and 2017-18. The ITAT had disposed of seven connected appeals through a common order.
The High Court, however, noticed that four appeals had been heard and stated to have been pronounced on August 6, 2025, while three other appeals were shown as heard and pronounced on August 13, 2025. Despite this, a common order was issued dealing with all seven matters.
Court's Observation
The High Court expressed strong displeasure over the manner in which the Tribunal had dealt with the appeals. It noted that the order did not properly address the assessee’s contentions or discuss the issues involved.
The Court observed:
"What shocks us is, the non-application of mind and undue haste"
It further found the impugned order to be lacking in logic, reasoning and rationale. According to the Court, such procedural lapses were particularly serious because the ITAT is the highest fact-finding authority in the appellate hierarchy.
The Court also took note of the fact that even the Tribunal’s staff had failed to bring the apparent discrepancy to the attention of its Members before the order was signed.Decision
The Delhi High Court held that it had no option but to quash and set aside all seven ITAT orders. This included the four orders challenged before the High Court as well as three connected orders that were not under challenge, reportedly due to monetary limits.
The Court restored ITA Nos. 534 to 537/Del/2025 and ITA Nos. 605 to 607/Del/2025 to their original numbers for fresh consideration by the Tribunal.
It directed that the appeals be heard by a Bench other than the one that had passed the impugned order.
The Court also clarified that it had made no observation on the merits of the tax dispute and that the Tribunal would remain free to decide the matter independently in accordance with law.
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