The Question for  consideration is what would be the basic compounding charges that the petitioner must pay in order to avail the offer for compounding the offense. The primary facts are not in dispute. In the assessment of the petitioner’s return, an addition of Rs.8.70 lakhs came to be made.This gave rise to additional tax of Rs.2.61 lakhs. A penalty of Rs.2.61 lakhs at the rate of 100% of the tax sought to be evaded was also imposed in terms of section 271(1)(c) of the Act.The revenue calculated the compounding fess at Rs 10, 4900.  On the basis of income ought to have been evaded which was paid under protest . The Assessee moved rectification  application which was not  disposed off . The  assessee moved the petition before High Court . Allowing the petition the Court held that ,the expression “amount sought to be evaded” in CBDT’s compounding guidelines dated 23.12.2014 means the amount of “tax sought to be evaded” and not the amount of “income sought to be evaded”. Accordingly the court directed the department to refund the excess  amount paid by the assessee latest by 31.10.2018.) ( SCA No. 8715 of 2018, dt. 17.09.2018) ( AY.2008 -09)

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