Delhi High Court raps ITAT over Patanjali tax appeals; cites 'undue haste' and 'non-application of mind' in proceedings

New Delhi: The Delhi High Court has criticised the Income Tax Appellate Tribunal (ITAT) for 'undue haste' and 'recklessness' in disposing of a tax matter related to Patanjali Ayurved, saying the negligence portrayed a 'shocking picture' of the procedural lapses and opaqueness in which the tribunal was functioning.

The high court quashed all seven orders passed by the ITAT in a batch of cross-appeals against its 2025 ruling. That ruling had rejected the department's petitions against Patanjali Ayurved over assessment orders for 2013-16 and 2017-18.

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A division bench of Justices Dinesh Mehta and Rajneesh Kumar Gupta said such negligence could not be countenanced by appellate authorities. They stressed that tribunals at the highest level of the appellate hierarchy are entrusted with fact-finding and must act with care.

"These appeals portray a rather shocking picture of the procedural lapses and opaqueness in which the Income Tax Appellate Tribunal, the highest fact-finding body, has been passing the orders in a zeal rather over-anxiety of disposing the cases," it said, adding that the members of the appellate tribunal had neither dealt with any contention of Patanjali Ayurved nor discussed the issues involved in the appeals regarding its assessment proceedings.

While deciding a batch of appeals filed by the department against Patanjali Ayurved, the bench noted that four appeals were shown as having been heard and pronounced on August 6, 2025, by the ITAT while another three appeals were heard and pronounced on August 13, 2025. Yet, a common order was passed deciding all seven appeals.

Stating that the ITAT order comprised less than seven paragraphs, the judges further observed that "we are not much concerned with the size of the order but what shocks us is the non-application of mind and undue haste which learned members of the tribunal have exhibited... we are unable to comprehend anything out of it, as it is bereft of any logic, reasoning or rationale behind it".

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The president of the appellate tribunal was also directed to ensure that the appeals are heard by a bench other than the one that passed the impugned order, the judges said.

The case involved a search and seizure at Hawala Traders Group that culminated in proceedings under Section 153C of the Income-tax Act. It was found that non-genuine bills for products were provided to Patanjali Ayurved, the parent of Patanjali Foods.