Principal Commissioner Of Income ….Tax (Central v. Learned Advocates Appeared In The Case

IN THE HIGH COURT OF ORISSA AT CUTTACK ITA No.74 of 2022 Principal Commissioner of Income ….Tax (Central) Appellant -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 Mr. Avinash Kedia, Jr. Standing Counsel For Respondent : Mr. Jagabandhu Sahoo, Sr. Advocate Mrs. Kajal Sahoo, 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 -------------------------------------------------------------------------------------------------- Date of hearing and judgment: 11[th] March, 2025 -------------------------------------------------------------------------------------------------- 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 ITA no. 74 of 2022 Page 1 of 5 dated 2[nd] 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 ITA no.74 of 2022 Page 2 of 5 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 29[th] 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 27[th] 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 ITA no.74 of 2022 Page 3 of 5 Committee (CEC) in page 29 of its report observed as is reproduced below. 5.On query we have been shown and perused assessment order dated 29[th] 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 27[th] 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 ITA no.74 of 2022 Page 3 of 5 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. ITA no.74 of 2022 Page 4 of 5 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 Signature Not Verified Digitally SignedSigned by: JYOSTNARANI MAJHEEReason: AuthenticationLocation: ORISSA HIGH COURTDate: 12-Mar-2025 11:29:27 ITA no.74 of 2022 Page 5 of 5