Brainbees ESOP Trust, a controlled trust of firstcry (brainbees solutions) , has received an order under Section 148A and a notice under Section 148 of the Income Tax Act, 1961 from the Income Tax Department for Assessment Year 2022-23. The regulatory action targets the issuance of shares to the Trust for employee grants, potentially leading to a reassessment of tax liabilities. The Trust asserts that no income chargeable to tax has escaped assessment and plans to pursue legal remedies.

The Income Tax Department issued the order and notice on June 30, 2026, alleging that income chargeable to tax escaped assessment within the meaning of Section 147 of the Income Tax Act, 1961. The Department proposes to assess or reassess the issuance of shares to the Trust or re-compute losses, depreciation, or other allowances for A.Y. 2022-23. The specific dispute concerns the valuation of shares issued to the ESOP Trust.

According to the filing, the Department seeks to reassess the issuance of 1,03,62,254 shares to the ESOP Trust. The shares were issued to the Trust at a face value of ₹5 per share, whereas the Department contends this was against their fair market value at the time of issuance. The Trust is evaluating appropriate legal remedies in response to the order and notice.

The financial implications of the dispute cannot be determined at this stage as no demand order has been passed by the Income Tax Department. The Trust believes it has a strong case on merit and that it has complied with all tax regulations. Brainbees Solutions emphasized its commitment to high standards of corporate governance and compliance, including the prompt payment of taxes.

Key Details of the Dispute

Brainbees Solutions Limited’s board has approved the sale of shares worth up to Rs 3,000 million in the proposed Initial Public Offering (IPO) of its subsidiary, Swara Baby Products Limited. The decision, taken on July 01, 2026, allows the company to participate in the Offer for Sale (OFS) of equity shares with a face value of Rs 2 each. This move is part of the fund-raising initiative by Swara Baby, subject to market conditions and necessary regulatory approvals.

The board’s approval permits the sale of up to such number of equity shares held by Brainbees Solutions Limited that aggregate to the specified amount. The final figure is subject to revisions permissible under applicable law. The IPO process requires clearances from the Securities and Exchange Board of India, BSE Limited, and National Stock Exchange of India Limited, among other regulatory authorities.

Despite the divestment, Swara Baby Products Limited will continue to be a subsidiary of Brainbees Solutions Limited. The company stated that this structure complies with the provisions of applicable regulations. The price band and other specific details regarding the proposed IPO are yet to be determined and will be announced by the competent body in due course.

The transaction is contingent upon commercial considerations and the receipt of all statutory approvals. Brainbees Solutions has informed the exchanges regarding this development under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.