Education Cess including Secondary and Higher Secondary Education Cess is not allowable as a Deduction: ITAT [Read Order]

The Pune bench of the Income Tax Appellate Tribunal (ITAT) has held that the education Cess including secondary and higher secondary education cess is not allowable as deduction.

CC Engineers Pvt. Ltd., the appellants challenged the order of CIT(A) in not allowing deduction for Education Cess paid by the Appellant company Rs. 2,789/-.

In the case of Kanoria Chemicals and Industries Ltd. Vs. Addl. CIT, it was held that “the Education cess is an additional surcharge levied on income-tax and it partakes the character of Income-tax.  Accordingly, it was held that the Education cess is not allowable as deduction.” 

The Tribunal also noted the judgment rendered by Hon’ble Bombay High Court in the case of Sesa Goa Ltd. 117 taxman.com 96 and by Hon’ble Rajasthan High Court in the case of Chambalal Fertilizers and Chemicals Ltd. Vs. Jt. CIT (I.T.A No. 52/2018 dated 31-7-2018) wherein it was held that the Education Cess was allowable as deduction.  However, the Tribunal observed that the judgment rendered by the

The Tribunal viewed that the decision rendered by the Supreme Court in the case of K. Shrinivasan (supra) shall prevail and accordingly held that the Education Cess is not allowable as deduction.

In light of judicial precedent, a Coram of Shri Inturi Rama Rao, Accountant Member and Shri Partha Sarathi Chaudhury, Judicial Member ruled against the assessee and held that payment of Education Cess including secondary and higher secondary education cess is not allowable as deduction.

While dismissing the appeal, the Tribunal held that “the Amendment taken place in the Statute with retrospective effect to section 40(a) of the Income Tax Act,1961 Act

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