Uttar Gujarat VIJ Co. Ltd. Vs ITO (Gujarat High Court)
Gujarat High Court recently delivered a decisive judgment in a series of petitions filed by Uttar Gujarat VIJ Company Ltd. (UGVCL) against the Income Tax Officer (ITO). The petitions challenged an order dated May 17, 2023, passed by the Income Tax Appellate Tribunal (ITAT) under Section 254(2) of the Income Tax Act, 1961, which had dismissed UGVCL’s Miscellaneous Application (MA) for rectification of a purported mistake apparent from the record. The High Court quashed the ITAT’s order, remanding the matter back to the Tribunal for fresh consideration, emphasizing the binding nature of jurisdictional High Court decisions on subordinate tribunals.
Case Background
The core of the dispute revolved around the tax treatment of interest income received by UGVCL from staff loans and advances, along with other miscellaneous receipts. UGVCL, a Gujarat Government-owned entity involved in electricity distribution, had filed its return for Assessment Year 2013-14, declaring a total income of Rs. Nil. However, the Assessing Officer (AO), in the assessment order dated December 29, 2016, treated this interest income and miscellaneous receipts as “income from other sources,” contrary to the company’s declaration of it as “income from business or profession.” Various other additions were also made.
