The court ruled that an unadjusted section 143(1) tax intimation cannot be treated as an order for revision under section 263, setting aside proceedings against Myntra and Cult.fit co-founder Mukesh Bansal.
The Karnataka High Court has struck down revision proceedings against Mukesh Bansal, the co-founder of Myntra and Cult.fit, in a ruling that reinforces the limited scope of the tax department’s powers when a return has only been processed under the Income Tax Act’s preliminary e-filing mechanism. The court upheld his refund, reported at ₹27.13 crore, after he refiled his return to treat compensation linked to the repurchase of employee stock options as capital gains rather than salary. According to Bar and Bench and other legal reports on the decision, the dispute centred on whether the tax authorities could reopen a matter that had been handled only through an automated intimation.
At the heart of the case was section 143(1), the routine processing stage that follows the filing of an income tax return, and section 263, which allows a commissioner to revise an assessment order that is both erroneous and harmful to revenue. Bansal’s case turned on whether an intimation generated without any adjustment could be treated as an order at all. His counsel argued that it could not, pointing to a long-standing Supreme Court ruling in Assistant Commissioner of Income Tax v Rajesh Jhaveri Stock Brokers and to the existence of other corrective provisions in the statute, including sections 154, 143(3), 144 and 147.
Justice S. Sunil Dutt Yadav agreed, according to the reports. The court noted that the intimation under section 143(1) in Bansal’s case contained no adjustment and therefore lacked the character of an order that could be revised under section 263. In doing so, the bench also relied on the distinction Parliament drew between an “intimation” and an “order”, and on earlier case law holding that a section 143(1) processing does not amount to an assessment in the usual sense.
The ruling is notable not only because it restores Bansal’s refund, but also because it narrows the room for the revenue department to invoke revisionary powers after an automated processing stage. Legal commentary on the decision says the tax department had argued the notice was only the start of proceedings and that the petition was therefore premature, while also contending that the compensation should be taxed as a perquisite arising from an employer-employee relationship. The court rejected that route, setting aside the notice dated 13 January 2026 and allowing Bansal’s petition.
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