The Assessee (State mining authority\/lease grantor) collected compounding fees\/fines from illegal miners\/transporters; the dispute was whether TCS under Sec. 206C (1C) must be collected on such compounding receipts. The Assessee contended that Sec. 206C(1C) targets amounts paid by leaseholders\/licensees\/contract-holders liable for royalty, not offenders in illegal mining; compounding fees under Sec. 23A of the MMDR Act read with Rule 71(5) are penalties, not royalty, and fall outside 206C(1C).<\/p>\n
The Revenue argued that the TCS obligation under 206C (1C) extends to cases where rights or interests in a mine are \u201cotherwise transferred,\u201d and should cover compounding receipts from illegal miners. CIT (A) NFAC dismissed the Assessee\u2019s appeal. The Hon\u2019ble Tribunal upheld TCS’s demand\/interest\/penalty on compounding fees. The Hon\u2019ble High Court of Chhattisgarh, after strictly construing fiscal statutes, held that 206C(1C) applies only to consideration from lessees\/licensees\/contract-holders paying royalty; no legislative mandate to collect TCS on compounding fees\/fines under MMDR Sec. 23A read with Rule 71(5); Hon\u2019ble Tribunal\u2019s order set aside and appeal allowed in favour of Assessee. (AY 2015-16)\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"
S. 206C : Collection at source-Trading-Forest produce-Illegal mining-TCS applies only to payments by lease\/license\/contract-holders and cannot extend to compounding fees\/fines from illegal miners-Order of Tribunal set aside. [S.133A, 206(IC), MMDR Act, 23A(1), R.71(5)] <\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-59627","post","type-post","status-publish","format-standard","hentry","category-income-tax-act"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-fvJ","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/59627","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=59627"}],"version-history":[{"count":1,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/59627\/revisions"}],"predecessor-version":[{"id":59628,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/59627\/revisions\/59628"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=59627"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=59627"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=59627"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}