Ans: Hon’ble Rajasthan High Court in case of Chambal Fertilisers and Chemicals Limited vs. JCIT (ITA No. 52/2018 order dated 31-07-2018) held that Education Cess is not a tax ; therefore, the same is not required to be disallowed under section 40(a)(ii) of the Act. While passing the aforementioned judgement Hon’ble court has specifically mentioned about CBDT Circular No 91/58/66-ITJ(19) dated 18/05/1967 where in CBDT has clarified that the effect of the omission of the word “cess” from section 40(a)(ii) is that only taxes paid are to be disallowed in the assessment for the years 1962- 63 onwards. Further Hon’ble Bombay High Court in case of Sesa Goa Limited v JCIT [2020] 117 taxmann.com 96 (Bombay) following the judgement of Hon’ble Rajasthan High Court in case of Chambal Fertilisers and Chemicals Limited(Supra) has held that Education Cess and Higher and Secondary Education Cess are liable for deduction in computing income chargeable under head of ‘profits and gains of business or profession’. Kolkata bench of ITAT in case of ITC Limited v ACIT , ITA No.685/Kol/2014 following Hon’ble Rajasthan High Court has allowed deduction of cess paid u/s 37 of Income Tax Act . Similar view has been expressed in DCIT v. Peerless General Finance and Investment and Co. Ltd. (ITA No. 1469 and 1470/Kol/2019. Education Cess and Higher and Secondary Education Cess on Income Tax paid on Profit of business or profession, not to be disallowed u/s 40(a)(ii) of Income Tax Act, 1961.