Mukesh Bansal Vs PCIT (Karnataka High Court)
A Computer-Generated Intimation Is Not an Assessment Order: Karnataka HC Quashes Section 263 Notice Against Unadjusted Section 143(1) Intimation
Summary: The Karnataka High Court has held that an intimation u/s 143(1), issued without making any adjustment, is not an “order” capable of revision u/s 263. Since jurisdiction u/s 263 can be exercised only against an order passed by the AO, the revision notice issued to revise an automated intimation granting a refund of ₹27.13 crore was quashed as being without jurisdiction. The Court, however, indicated an important distinction: where an intimation is issued after making an adjustment, it may possess the character of an appealable order and could potentially be revised u/s 263. The ruling is therefore confined to an intimation accepting the return without adjustment.
Revised Return Changes ESOP Receipt From Salary to Capital Gains
The assessee had originally filed his return for AY 2019-20 declaring total income of ₹231.74 crore, with tax liability of ₹82.55 crore, and claimed a nominal refund.
On 09.01.2024, he applied for condonation of delay u/s 119(2)(b) and sought permission to file a revised return. The application was allowed on 19.12.2024.
In the revised return, compensation received upon repurchase or cancellation of unexercised ESOPs by his former employer was offered as capital gains instead of salary. Processing of this revised return u/s 143(1) resulted in a refund of ₹27,13,38,330, including interest.
