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2021 (10) TMI 397 - AT - Income TaxDeduction in respect of 'education cess on Income-tax' and 'secondary and higher education cess on Income-tax' - HELD THAT - Hon'ble Bombay High Court in the case of Sesa Goa Limited v. JCIT 2020 (3) TMI 347 - BOMBAY HIGH COURT had held education cess is an allowable expenditure as the word cess is conspicuously absent under the provisions of section 40(a)(ii) - we hold that education cess is to be allowed as deduction.
Issues:
1. Adjudication of additional ground regarding deduction of education cess on Income-tax. Analysis: The appeal was disposed of by the ITAT, and the assessee filed a Miscellaneous Petition seeking adjudication of an additional ground related to the deduction of education cess on Income-tax. The assessee had remitted education cess for the assessment year but omitted to claim it as an expense in the return of income. The learned AR argued that education cess should be allowed as a deduction based on a judgment of the Hon'ble Bombay High Court. The issue raised was deemed a pure legal issue not requiring factual verification, thus admitted for adjudication. The Hon'ble Bombay High Court held that education cess is an allowable expenditure as the term "cess" is not mentioned in the relevant provision of the Income Tax Act. The court emphasized that if the legislature intended to disallow such payments, they would have included "cess" in the relevant section. Additionally, the court referred to a CBDT Circular supporting the deduction of education cess. The Hon'ble Rajasthan High Court also supported this view, stating that education cess should not be disallowed under the Income Tax Act. Furthermore, the Mumbai Bench of the Tribunal admitted and adjudicated a similar claim in favor of the assessee, following the Bombay High Court's judgment. Based on the judicial pronouncements and legal interpretations, the Tribunal concluded that education cess is to be allowed as a deduction. Therefore, the appeal filed by the assessee was partly allowed, and the order was pronounced accordingly on September 28, 2021.
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