India, March 21 -- The Orissa high court has ruled that mining without environmental clearance does not automatically constitute illegal mining for taxation related purposes.

Disposing a petition of the Income Tax department, which challenged an order of the Income Tax Appellate Tribunal (ITAT) on the matter, the HC ruled that the I-T department cannot disallow expenses under Income Tax Act unless illegal activity is conclusively proven.

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 base...