2025:CGHC:27935-DB NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR TAXC No. 114 of 2025 (Assessment Year 2015-16)

{Arising out of order dated 21-7-2023 passed by the Income Tax Appellate Tribunal, Raipur Bench, Raipur in ITA No.160/RPR/2023}

Deputy Director (Mineral And Administation) Jagdalpur Mining Officer, Collectorate Campus, P.O. Jagdalpur District Bastar Digitally signed by AJAY KUMAR (Chhattisgarh) ... Appellant.

DWIVEDI Date:

2025.06.27 versus

12:01:52 +0530 The Deputy Commissioner Of Income Tax (Tds) Raipur (Chhattisgarh)

... Respondent.

For Appellant : Mr. Rahul Tamaskar, Government Advocate.

For Respondent : Mr. Ajay Kumrani, Advocate on behalf of Mr. Amit Chaudhari, Standing Counsel for the respondent.

Division Bench: -

Hon'ble Shri Sanjay K. Agrawal and Hon'ble Shri Deepak Kumar Tiwari, JJ.

Judgment on Board (26/06/2025)

Sanjay K. Agrawal, J.

1. This tax appeal has been preferred under Section 260A of the Income Tax Act, 1961 (for short, ‘the IT Act’) calling in question legality, validity and correctness of judgment & order dated 21-7-2023 passed by the Income Tax Appellate Tribunal (ITAT), Raipur Bench, Raipur in ITA No.160/RPR/2023 affirming the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, by which the ITAT has dismissed the appeal of the assessee upholding the order of the CIT (Appeals) in which following substantial question of law has been formulated: -

“Whether provisions of Section 206C(1C) of the Income Tax Act, 1961 are applicable for collecting TCS from offenders who do illegal mining or transportation/storage without having lease or licence or have not entered into the contract for transfer of rights in Mines or Quarry and from whom Compounding Fine is collected as per provisions under Rule 71(5) of the Chhattisgarh Minor Mineral Rules, 2015”.

2. The aforesaid question of law arises for consideration on the following factual backdrop: -

3. On 24-9-2018, TDS Survey under Section 133A(2A) of the IT Act was conducted in the office of the District Mining Officer, Bastar Jagdalpur, which is the Mining Department of the State of Chhattisgarh. During the course of aforesaid proceeding, the Income Tax Officers came across certain issues, viz., the assessee i.e. the appellant herein by not collecting tax at source (TCS) on the amount of compounding fees/fine that was recovered from illegal miners and transporters of minerals had violated the provisions contained in Section 206C(1C) of the IT Act, and two other issues, which was not being dealt with in the instant appeal, as they have been settled finally by the order of the ITAT between the parties. Thereafter, on 1-7-2019, order under Sections 206C(1C), 206C(6) & 206C(7) of the IT Act was passed after treating the assessee as ‘assessee-in-default’ and saddled it with an obligation to make good the said non-collection of tax at source. The appellant herein being aggrieved by the order of the Assessing Officer preferred an appeal before the CIT (Appeals) on the issue of saddling it with the liability for failure to collect tax at source on the amount of compounding fees received from illegal miners/ transporters of minerals on the ground that the same is not contemplated under Section 206C(1C) of the IT Act, therefore, the appellant was not liable to collect tax as per Section 206C(1C) as it is not covered by the said provision, however, the appeal filed by the assessee before the CIT (Appeals) was dismissed by the CIT (Appeals) on 25-3-2022 and feeling aggrieved against that order, the appellant herein/assessee preferred an appeal before the ITAT and the ITAT though allowed the appeal with reference to other issues which we are not concerned, but dismissed the appeal holding that the appellant/ assessee was obliged to collect tax at source (TCS) as per the provisions contained in Section 206C(1C) of the IT Act.

4. Feeling dissatisfied and aggrieved against the order of the ITAT, the appellant herein/assessee has preferred this