Karnataka High Court Sets Aside Tax Revision Proceedings Against Myntra Co-Founder Mukesh Bansal
The Karnataka High Court has set aside income-tax revision proceedings initiated against Mukesh Bansal, co-founder of Myntra and Cult.fit, in connection with a tax refund exceeding ₹27.13 crore for Assessment Year 2019–20. Justice S. Sunil Dutt Yadav delivered the judgment on September 18, 2026, in Shri Mukesh Bansal v. Principal Commissioner of Income Tax, Bengaluru-2.
Background of the Dispute
Bansal had originally filed his income-tax return declaring a total income of approximately ₹231.73 crore and a tax liability of approximately ₹82.55 crore. Following permission to file a revised return after condonation of delay, he claimed that the repurchase of Employee Stock Options (ESOPs) by his former employer should be treated as capital gains rather than salary income.
The revised return resulted in a refund of approximately ₹27.13 crore, including interest. Subsequently, the Income Tax Department initiated revision proceedings under Section 263 of the Income-tax Act, 1961, seeking to revisit the intimation issued under Section 143(1) through which the revised return had been processed.
Key Legal Issue
The principal question before the High Court was whether an intimation issued under Section 143(1) could be treated as an order for exercising revisionary jurisdiction under Section 263 of the Income-tax Act.
Bansal contended that Section 263 permits revision of an order passed in proceedings under the Act, whereas a routine intimation under Section 143(1), involving no adjustment or adjudication on merits, does not constitute such an order.
High Court's Findings
The Court examined the distinction between an intimation issued during the preliminary processing of a tax return under Section 143(1) and an assessment order passed following scrutiny proceedings. It observed that processing under Section 143(1) generally involves limited adjustments and does not ordinarily entail the adjudicatory exercise associated with a scrutiny assessment.
The Court also considered the Supreme Court's decision in Assistant Commissioner of Income Tax v. Rajesh Jhaveri Stock Brokers Private Limited, which recognised the distinction between an intimation and an assessment order.
Justice S. Sunil Dutt Yadav held that an intimation under Section 143(1) issued without adjustments could not be construed as an order for the purpose of Section 263. The fact that an intimation may operate as a notice of demand for tax recovery does not automatically transform it into an assessment order.
Decision and Legal Significance
The High Court concluded that the revisionary proceedings had been initiated without jurisdiction and set aside the impugned notice and proceedings. The ruling reinforces the statutory limits on the Income Tax Department's revisionary powers and distinguishes routine return processing from an assessment order capable of being revised under Section 263.
Importantly, the Court confined its decision to the jurisdictional question. It did not finally adjudicate the broader substantive question of whether the ESOP-related amount should be taxed as salary or capital gains in every comparable case.
Case: Shri Mukesh Bansal v. Principal Commissioner of Income Tax, Bengaluru-2
Court: Karnataka High Court, Bengaluru
Case Number: Writ Petition No. 5330 of 2026 (T-IT)
Decision Date: September 18, 2026
Judge: Justice S. Sunil Dutt Yadav
Key Provisions: Sections 143(1) and 263 of the Income-tax Act, 1961.