The Delhi High Court has set aside seven orders passed by the Income Tax Appellate Tribunal (ITAT) in a batch of appeals concerning Patanjali Ayurved Limited, flagging serious procedural deficiencies and a lack of reasoning in the Tribunal's handling of the matters. According to reports from Bar and Bench, a Division Bench of Justice Dinesh Mehta and Justice Rajneesh Kumar Gupta directed that the appeals be heard afresh by a different ITAT bench. The court also directed that its order be forwarded to the Secretary, Ministry of Law and Justice, for information. The High Court described the Tribunal's conduct as 'undue haste' and 'recklessness', stating that such negligence by a high-level fact-finding appellate authority 'cannot be countenanced'. The court noted that the Tribunal orders reflected that it had been passing orders in 'over-anxiety' of disposing of the matters. The judgment was pronounced on September 10, 2026, as reported by Bar and Bench.
The appeals were filed by the Principal Commissioner of Income Tax, Central-1, Delhi, and arose from seven matters before the ITAT concerning assessment years 2013-14 to 2015-16 and 2017-18. As reported by Bar and Bench, the High Court found that the Tribunal had dealt with the cases with 'undue haste'. The court said the impugned order, which disposed of all seven appeals, did not address the assessee's contentions or analyse the issues raised in the proceedings. The appeals stemmed from proceedings initiated under Section 153C of the Income Tax Act following a search conducted between October 31 and November 3, 2018, in connection with the Hawala Traders Group. The ITAT had disposed of seven connected appeals through a common order, as noted by Bar and Bench.
The High Court found inconsistencies in the dates recorded for the hearing and pronouncement of the orders. According to the High Court, four appeals were shown as having been heard and decided on August 6, 2025, while the remaining three were recorded as having been heard and decided on August 13, 2025, despite the matters being disposed of through a common order. As reported by Bar and Bench, the Bench said it was unable to discern any 'logic, reasoning or rationale' from the order and held that the procedural irregularities compounded the problem. The court criticised the impugned order as lacking 'logic, reasoning or rationale,' questioning how a common order could have been issued for appeals with different hearing and pronouncement dates. The High Court also noted that even the Tribunal's staff had failed to bring the apparent discrepancy to the attention of its Members before the order was signed, as reported by Bar and Bench. When the matter was first listed before the High Court on February 2, 2026, counsel appearing for Patanjali was himself surprised by the discrepancy and sought to verify the Tribunal's record, fairly submitting that there appeared to be a procedural error on the part of the Tribunal, possibly due to inadvertence.
The High Court quashed all seven ITAT orders and directed the President of the Tribunal to place the matters before another bench for fresh adjudication. According to Bar and Bench, the court emphasized that it was not concerned with the length of the order but with what it described as the 'non-application of mind and undue haste' evident in the Tribunal's approach. The court's decision ensures that the appeals will receive proper consideration by a different ITAT bench, addressing the procedural concerns raised in the current proceedings. The High 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. The court clarified that it had made 'no observations on the merits of the tax dispute' and that the Tribunal would remain free to decide the matter independently in accordance with the law. The court also directed that a copy of the High Court's order be sent to the President of the ITAT and the Secretary, Ministry of Law and Justice, for information.
