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Pr. Commissioner of Income Tax, Central-1, Delhi vs. Patanjali Ayurved Limited (Neutral Citation: 2026:DHC:7806-DB) [ITA 80/2026] and connected matters

Income Tax Appeal · 2026:DHC:7806-DBDecided 10 Sept 2026New Delhi Bench
ITA 80/2026, ITA 81/2026, ITA 83/2026, ITA 91/2026CNR: DLHC010033172026
Justice Dinesh Mehta · Justice Rajneesh Kumar Gupta

Background

The Income Tax Appellate Tribunal had disposed of a batch of seven cross-appeals involving Patanjali Ayurved Limited relating to assessment years 2013-14 to 2017-18, arising from a search action on a third party (M/s Hawala Traders Group). The Tribunal's order, running to less than seven paragraphs, did not discuss any of the assessee's contentions, and bizarrely recorded that four appeals were heard and pronounced on 06.08.2025 while three connected cross-appeals by the same order were shown as heard and pronounced on 13.08.2025: an internal contradiction that surprised even the assessee's own counsel.

Decision Breakdown

The High Court found the Tribunal's order to be "bereft of any logic, reasoning or rationale," reflecting undue haste and non-application of mind by the Tribunal members and their staff. Because no addition against the assessee was based on any incriminating material found during the search itself (as required by the Supreme Court's ruling in PCIT v. Abhisar Buildwell), the Tribunal had a legitimate ground to rule in the assessee's favour, but its slipshod, self-contradictory manner of doing so could not be sustained. The Court quashed all seven Tribunal orders (regardless of which were under challenge) and restored all the appeals to be reheard afresh by a different Bench of the Tribunal, directing a copy be sent to the Tribunal's President and the Law Ministry, while making clear it expressed no view on the merits.

Lesson Learnt

Appellate tribunals must show their reasoning and cannot dispose of multiple linked appeals through an internally inconsistent, cursory order, even when the ultimate outcome may be legally justifiable, sloppy procedure can itself be a ground for the High Court to send the matter back for a fresh, more careful hearing.

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