District Mining Officer Vs DCIT (TDS) (Chhattisgarh High Court)
In District Mining Officer vs DCIT (TDS), the Chhattisgarh High Court adjudicated a batch of tax appeals involving a common question of law regarding the applicability of Section 206C(1C) of the Income-tax Act, 1961. The issue was whether Tax Collected at Source (TCS) is required to be collected on compounding fees or fines recovered from persons engaged in illegal mining, transportation, or storage of minerals without lease, licence, or contractual rights.
Read SC Judgment in this case: No TCS on Compounding Fees as Illegal Mining Lacks Legal Contract or Licence: SC
The appeals arose from orders passed by the Income Tax Appellate Tribunal, which had upheld the decision of the Commissioner (Appeals) and confirmed the liability of the assessee (District Mining Officer) for failure to collect TCS on compounding fees recovered from offenders. The Assessing Officer had treated the assessee as “assessee-in-default” under Sections 206C(1C), 206C(6), and 206C(7), and raised demand along with interest and penalty.
The factual background involved a TDS survey conducted under Section 133A(2A) at the office of the District Mining Officer, where it was observed that no TCS had been collected on compounding fees levied on illegal miners. The Revenue authorities contended that such collections fall within the ambit of Section 206C(1C), which mandates TCS on transactions involving mining or quarrying.
