Compounding Fee Not Royalty: HC Quashes TCS Demand on Illegal Mining Fines

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 App...