Delhi High Court orders fresh hearing in Patanjali tax appeals.

The Delhi High Court has set aside seven orders passed by the Income Tax Appellate Tribunal (ITAT) in tax proceedings involving Patanjali Ayurved Ltd., after finding serious procedural irregularities in the manner in which the appeals were disposed of.

A bench of Justices Dinesh Mehta and Rajneesh Kumar Gupta directed that all seven appeals be heard afresh by a different ITAT bench. Court also ordered that a copy of its judgment be sent to the president of the tribunal and the secretary, Ministry of Law and Justice.

The high court made it clear that it was not examining the merits of the underlying tax dispute and that the tribunal would be free to decide the matters independently in accordance with law.

Different hearing dates, but one common order

The case concerned seven appeals arising from proceedings initiated under Section 153C of the Income Tax Act following a search conducted in the Hawala Traders Group between October 31 and November 3, 2018.

The proceedings eventually concerned assessment years 2013-14, 2014-15, 2015-16 and 2017-18.

The high court's principal concern was the manner in which the ITAT disposed of the appeals. Four appeals filed by Patanjali were recorded as having been heard and pronounced on August 6, 2025, while three appeals filed by the Revenue were shown as having been heard and pronounced on August 13, 2025.

Despite the different dates, all seven matters were dealt with in a single common order. The high court said it was unable to understand how such an order could have been passed and released when the records showed that the appeals had been heard and pronounced on different dates.

When the matter first came before the high court on February 2, 2026, Patanjali's counsel was also surprised by the discrepancy and sought to verify the tribunal's records and the certified copy of the order.

After examining the records, counsel for Patanjali fairly submitted that there appeared to be a procedural error on the part of the tribunal, possibly due to inadvertence.

ITAT order did not deal with parties' contentions

The high court also took exception to the substance and structure of the ITAT's order.

The tribunal had disposed of all seven appeals in an order containing fewer than seven paragraphs. The high court clarified that the concern was not simply the brevity of the order, but the absence of reasoning and consideration of the issues raised before the tribunal.

The bench observed that the ITAT had neither dealt with the assessee's contentions nor discussed the issues involved in the appeals in an adequate manner.

It further found the order difficult to comprehend and said it was bereft of logic, reasoning or rationale. The judges said the tribunal had displayed "non-application of mind and undue haste" while dealing with the matters.

Court noted that the ITAT is the highest fact-finding authority in the appellate hierarchy and said negligence of this nature could not be accepted from an appellate authority entrusted with such a role.

Dispute arose from Section 153C proceedings

The seven appeals arose from assessments made after the search involving the Hawala Traders Group.

The ITAT had treated the relevant assessment years as "unabated" and quashed four assessments. It had allowed Patanjali's four appeals while dismissing three cross-appeals filed by the Revenue.

The tribunal had relied, among other things, on the Supreme Court's ruling in PCIT v. Abhisar Buildwell Pvt. Ltd (2023), concerning the requirement of incriminating material in search-related assessments.

However, the Delhi High Court did not decide whether the tribunal's conclusions on these tax issues were legally correct.

Instead, it held that the procedural defects required the orders to be set aside.

All seven matters restored for fresh adjudication

The high court quashed all seven ITAT orders and restored the appeals to their original numbers for fresh consideration.

This included three matters which were not independently challenged before the high court, with the judgment noting that this was apparently because of the monetary limits applicable to Revenue appeals.

Court specifically directed that the appeals should not be heard by the same ITAT bench that had passed the earlier orders.

Case title: Pr. Commissioner of Income Tax, Central-1, Delhi v. Patanjali Ayurved Limited and connected matters

Bench: Justice Dinesh Mehta and Justice Rajneesh Kumar Gupta

Judgment date: September 10, 2026

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