MRink - Finance and Income Tax

It is well settled law that any amount debited in the Profit & Loss Account which is in the nature of Income Tax paid/ payable is specifically disallowed u/s. 40(a)(ii) of the Income Tax Act. Below is the wordings of the section 40(a)(ii): “any sum paid on account of any rate or tax levied on the profits or gains of any business or profession or assessed at a proportion of, or otherwise on the basis of, any such profits or gains” Now, if the interpretation of the law is done in a literal way, one can construe that the said disallowance u/s. 40(a)(ii) does not cover cess payable on income tax under its ambit and hence such disallowance for cess payable on Income Tax is a matter of debate. In this reference, recently Hon’ble Bombay HC, in the case of Sesa Goa Limited v. JCIT, Range 1, Panaji Goa (Order dated 28 February 2020 in ITA No. 17 of 2013) , while adjudicating the question raised in respect of allowability of cess deduction that whether the expression "any rate or