Full Breakdown
Delhi High Court Quashes Seven ITAT Orders in Patanjali Tax Dispute
By Drooid · · How we work
High Court Sets Aside ITAT Orders
A Division Bench of Justices Dinesh Mehta and Rajneesh Kumar Gupta of the Delhi High Court nullified seven orders issued by the Income Tax Appellate Tribunal (ITAT) in a batch of cross-appeals involving Patanjali Ayurved Limited. Delivered on September 10, 2026 and uploaded on September 15, 2026, the judgment described the Tribunal’s handling of the matters as a “shocking picture” of procedural lapses, opaqueness, undue haste and a non-application of mind. The court held that the Tribunal had disposed of all seven appeals through a single, brief order that failed to address Patanjali’s contentions or analyse the issues, and that the order contained inconsistencies in the recorded hearing and pronouncement dates. Consequently, the High Court directed that the seven appeals be reheard by a different ITAT bench and that a copy of the judgment be sent to the President of the Tribunal and the Secretary, Ministry of Law and Justice.
Background & Context
The dispute stems from proceedings initiated under Section 153C of the Income Tax Act after a search of the Hawala Traders Group in late 2018, concluding on November 3, 2018. The search led to assessments for Patanjali Ayurved for assessment years 2013-14, 2014-15, 2015-16 and 2017-18. The ITAT had previously quashed the assessments for the first four years and dismissed three cross-appeals filed by the Revenue Department, relying in part on the Supreme Court’s decision in *PCIT v. Abhisar Buildwell Pvt. Ltd.* regarding the need for incriminating material in search-related assessments.
Timeline
- November 3, 2018 – Search of Hawala Traders Group completed, triggering tax proceedings.
- August 6, 2025 – Four of the seven appeals were recorded as heard and pronounced.
- August 13, 2025 – The remaining three revenue appeals were recorded as heard and pronounced.
- February 2, 2026 – Matter first listed before the Delhi High Court; counsel raised the date discrepancy.
- September 10, 2026 – High Court delivered its judgment quashing the seven ITAT orders.
- September 15, 2026 – Judgment uploaded to the court’s website.
- October 27, 2026 (scheduled) – Case listed for further proceedings after the court’s directions.
Official Statements & Responses
The Delhi High Court emphasized that the Tribunal’s failure to apply “mind” and its “undue haste” could not be countenanced by an appellate authority tasked with fact-finding. The bench ordered that the President of the ITAT reassign the matters to a bench other than the one that issued the original order and that the Ministry of Law and Justice be informed. The court clarified that it was not reviewing the substantive merits of the tax dispute; its intervention was limited to rectifying the procedural defects.
Conflicting Reports & Gaps
The primary point of contention identified by the court is the inconsistency between the hearing dates recorded for the individual appeals and the issuance of a single common order. No other source provides an alternative explanation for this discrepancy, leaving the procedural error unclarified beyond the court’s observation.
What’s Next
The High Court’s directions require the ITAT to rehear all seven appeals before a different bench. The matter is scheduled for further hearing on October 27, 2026, where the Tribunal is expected to issue fresh, individually reasoned orders in accordance with the law.