Surcharge and Education Cess not to be considered to be included in the word ‘tax’ for the purpose of examining the tax effect involved in an appeal

 "Surcharge and Education Cess not to be considered to be included in the word ‘tax’ for the purpose of examining the tax effect involved in an appeal"

Dome Bell Electronics India Ltd. versus DIT – Mumbai ITAT.

In this case, it was brought to the notice that the tax effect is for Rs.9,35,762/-, and therefore, the appeal was not maintainable in view of CBDT Circular No. 21/2015 dated 10.12.2015. But, it was also submitted that on the amount of tax, amounts of surcharge and education cess were also payable amounting to Rs.93,576/- and Rs.30,880/- respectively, however, the surcharge and education cess are not to be considered for the calculation of tax effect. The Hon’ble Tribunal, after considering the decision of Hon’ble Chennai Bench in the case of ACIT vs. Shri R. Viswanathan, agreed with the view that surcharge and education cess shall not be included in the word ‘tax’ for the purpose of examining of tax effect, as envisaged in CBDT Circular No. 21/2015 dated 10.12.2015.

Same in easy way:

In this case, it was noted that the amount of tax involved is ₹9,35,762, which makes the appeal not maintainable according to the CBDT Circular No. 21/2015 from December 10, 2015. It was argued that additional amounts for surcharge and education cess—₹93,576 and ₹30,880 respectively—were also due. However, these additional amounts cannot be included in the tax calculation for determining whether the appeal is allowable. The Hon’ble Tribunal, referencing a previous decision by the Chennai Bench in the case of ACIT vs. Shri R. Viswanathan, agreed that surcharge and education cess should not be considered as part of the "tax" for the purpose of evaluating tax effects as stated in the CBDT Circular No. 21/2015.