For tax purposes, mining without environmental clearance not illegal: Orissa HC

The Orissa high court has ruled that mining without environmental clearance does not automatically constitute illegal mining for taxation related purposes. In ruling on a petition filed by the Income Tax department, which contested an Income Tax Appellate Tribunal (ITAT) order on the subject, the High Court held that the I-T department cannot deny expenses under the Income Tax Act unless there is unquestionable proof of illegal activity.

Relying on the findings of Centrally Empowered Committee (CEC) of the Supreme Court, which held that mining without environmental clearance is not illegal mining, the HC division bench led by acting chief justice Arindam Sinha and justice MS Sahoo ruled that a tax disallowance cannot be made solely based on allegations of non-compliance unless a violation is conclusively established.