Orissa High Court
Principal Commissioner Of Income vs M/S. Tarini Minerals Pvt. Ltd on 11 March, 2025
Author: Arindam Sinha
Bench: Arindam Sinha, M.S. Sahoo
IN THE HIGH COURT OF ORISSA AT CUTTACK
ITA No. 74 of 2022
Principal Commissioner of Income .... Appellant
Tax (Central)
-versus-
M/s. Tarini Minerals Pvt. Ltd. .... Respondent
Learned advocates appeared in the case:
For Appellant : Mr. S.C. Mohanty, Sr. Standing Counsel
Mr. Avinash Kedia, Jr. Standing Counsel
For Respondent : Mr. Jagabandhu Sahoo, Sr. Advocate
Mrs. Kajal Sahoo, Advocate
CORAM:
THE HON'BLE MR. JUSTICE ARINDAM SINHA,
ACTING CHIEF JUSTICE
AND
THE HON'BLE MR. JUSTICE M.S. SAHOO
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Date of hearing and judgment: 11th March, 2025
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ARINDAM SINHA, ACJ.
1. Mr. Mohanty, learned advocate, Senior Standing Counsel
appears on behalf of revenue. He submits, the appeal be admitted on
substantial questions of law suggested in the memo arisen from order
dated 2nd May, 2022 passed by the Income Tax Appellate Tribunal,
Cuttack Bench in ITA nos. 268, 270 and 272/CTK/2020 and ITA nos.
269, 271 and 273/CTK/2020 pertaining to assessment years 2008-
2009 to 2010-2011.
2. Respondent-assessee was involved in illegal mining. Illegal
because statutory clearances had not been obtained for the activity
undertaken. The assessee suppressed production particulars. There
was information had and the assessment reopened under section 147
in Income Tax Act, 1961. The Tribunal erred in negating this ground
of appeal urged before it by revenue, on the assessee having been
successful before the first appellate authority against the assessment
made by the Assessing Officer (AO). The Tribunal also erred in
deleting the addition of expenditure made in the reassessment, in line
with explanation (1) under section 37(1).
3. Mr. Sahoo, learned senior advocate appears on behalf of
respondent-assessee and points out from paragraph 11 of impugned
order that the Tribunal found on facts. The appellate authority had
examined Form H-1 submitted to Indian Bureau of Mines in regard
to production of iron ore to find that very same figure had been
reported by the assessee in its audit report in Form 3CD. The
Tribunal thus concurrently found. There is no perversity in the
concurrent finding of fact. No question of law, let alone a substantial
question can arise from such concurrent finding on fact.
4. So far as illegal activity attracting rigor of explanation (1)
under section 37(1) is concerned Mr. Sahoo submits, the Tribunal
again concurred with the first appellate authority to say, no penalty
imposed on alleged statutory violation had been claimed by the
assessee for there being disallowance on expenditure. The deletion
was correctly made.
5. On query we have been shown and perused assessment order
dated 29th March, 2016. It appears, the AO relied on report of Justice
M.B. Shah Commission, which said, leases operated under deemed
extension without statutory clearance under EIA notification dated
27th January, 1994 and amendments therein for environmental
clearance is considered as illegal. Action should be initiated to
recover value equivalent to market value. The assessee when show
caused, came up with its explanation that Central Empowered
Committee (CEC) in page 29 of its report observed as is reproduced
below.
"However, the mineral produced without environmental
clearances or beyond the quantity prescribed in the
Environment clearance or approved mining plan/scheme of
Mining does not, for the purpose of Sec. 21(5) of MMDR Act,
1957 fall in the category of illegal mining."
(emphasis supplied)
6. We have not been able to find there arises a substantial
question of law on the concurrent finding of fact. So far as
disallowing the expenditure in terms of explanation (1) under section
37(1) is concerned, the Tribunal said that the assessee had not
claimed any expenditure on account of penalty imposed and paid.
Reliance by the assessee was on report filed by the CEC pursuant to
Justice M.B. Shah Commission. It was on page 29 in the report
containing opinion that, inter alia, mining operations without
clearance does not constitute illegal mining. Revenue will be able to
apply explanation (1) under section 37(1) if, in future, the activity is
declared to be illegal, penalty imposed and claimed by assessee as an
expenditure in its relevant return. Presently, there is nothing to show
the activity stood declared as illegal for the explanation to be invoked.
7. No substantial question of law arises from impugned order of
the Tribunal. Materials on record do not bring forth a finding of illegal
mining activity indulged in by the assessee.
8. The appeal is dismissed.
( Arindam Sinha )
Acting Chief Judge
( M.S. Sahoo )
Judge
Dutta/jyostna
