The Delhi High Court has delivered a significant ruling on the growing menace of fabricated legal citations, setting aside an appellate income tax order after discovering that it relied on six judicial precedents that simply did not exist. 

The Bench of Justice Dinesh Mehta and Justice Rajneesh Kumar Gupta observed that orders founded on non-existent or “hallucinated” judgments amount to a fraud on the justice delivery system and cautioned that authorities and courts citing such decisions could face strict disciplinary consequences in the future. 

The petitioner/assessee approached the High Court questioning the legality of the appellate order on an unusual but serious ground. According to the petitioner, the Commissioner of Income Tax (Appeals) had supported his conclusions by citing six judicial decisions which could not be traced in any law reports or judicial databases.

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When the matter first came up before the Court, counsel for the petitioner specifically pointed out paragraph 6 of the impugned appellate order, where six reported judgments had been relied upon to justify the conclusions reached by the appellate authority. 

Finding the allegation serious, the High Court issued notice to the officer who had authored the appellate order and sought an explanation regarding the source of the cited authorities.

The Court’s legal researchers independently attempted to verify each of the six reported judgments referred to in the order. Surprisingly, none of the judgments cited by the appellate authority actually existed. The citations included purported decisions reported in the Supreme Court Cases (SCC) and Income Tax Reports (ITR), but every one of them was found to be fictitious. 

To further verify the position, the Bench summoned the relevant law reports and confirmed that the cited judgments were non-existent.

In response to the Court’s notice, the author of the impugned order, who had by then retired from service, filed an affidavit explaining the circumstances.

The Income Tax Department informed the Court that due to a heavy workload, the officer had relied upon an Inspector to provide the judicial citations. According to the explanation, the citations supplied by the Inspector were incorporated into the appellate order without being independently verified by the officer before signing it. The same explanation was reiterated in the affidavit placed before the Court. 

The Division Bench expressed deep concern over what it described as an increasing trend of relying upon “hallucinated” or non-existent judicial precedents.

The Court observed that the practice of citing judgments that do not exist is becoming increasingly common. It stated that any judicial or quasi-judicial order founded upon non-existent precedents is legally unsustainable and amounts to a fraud on the justice delivery system.

Importantly, the Court remarked that the time has come for strict action to be taken whenever any authority or court is found relying upon fabricated judicial precedents, whether such citations have been generated through artificial intelligence or are self-created. The Bench indicated that disciplinary proceedings may be warranted in appropriate cases to preserve the integrity of judicial decision-making. 

While emphasizing the seriousness of fabricated citations, the High Court clarified that adjudicating authorities are not required to support every conclusion with judicial precedents.

According to the Bench, an authority is free to base its conclusions on its own interpretation of statutory provisions, reasoning, and logic. However, once an order purports to rely upon judicial precedents, those precedents must be genuine. Orders founded upon incorrect or non-existent law cannot be permitted to stand and are liable to be set aside. 

After finding that the appellate authority had relied upon fictitious judgments, the High Court set aside the impugned order dated February 24, 2026.

The matter has been remanded to the Commissioner of Income Tax (Appeals) for a fresh decision in accordance with law after independently examining the issues involved. 

Although the Court strongly criticised the use of fabricated judicial authorities, it declined to initiate disciplinary proceedings because the officer responsible for authoring the impugned order had already retired from service.

The writ petitions were accordingly disposed of along with the connected applications.

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