District Mining Officer Vs DCIT (Chhattisgarh High Court)
The Chhattisgarh High Court decided a batch of tax appeals under Section 260A of the Income Tax Act, 1961, involving a common substantial question of law: whether Section 206C(1C) of the Income Tax Act applies for collecting Tax Collected at Source (TCS) from persons engaged in illegal mining or transportation/storage without lease or licence, and from whom compounding fine is collected under Rule 71(5) of the Chhattisgarh Minor Mineral Rules, 2015.
Read SC Judgment dated 27.02.2026 in this case: SC Upholds HC Ruling That TCS Cannot Apply to Compounding Fees in Illegal Mining Cases
Read SC Judgment dated 27.01.2026 in this case: SC Upholds No TCS under Section 206C(1C) on Illegal Mining Compounding Fees
The appeals arose from a TDS survey conducted under Section 133A(2A) at the office of the District Mining Officer, Bemetara. The Income Tax Department found that the Mining Department had not collected TCS on compounding fees/fine recovered from illegal miners and transporters. An order under Sections 206C(1C), 206C(6), and 206C(7) treated the appellant as an assessee-in-default and raised demand with interest and penalty. The Commissioner (Appeals) and the ITAT upheld the demand insofar as non-collection of TCS on compounding fees was concerned.
