HC : Calculates compounding fee @100% of 'tax' evaded, not on income addition

Gujarat HC rules that compounding fees should be levied @ 100% of ‘tax’ sought to be evaded and not @ 100% of ‘income addition’ with respect to prosecution initiated on assessee co. u/s 276C; Notes that para 12 of CBDT’s latest guidelines of December, 2014 on compounding of offences prescribes compounding fees for offense u/s 276C(1) at 100% of the ‘amount sought to be evaded’; Since this para does not contain any specification of ‘the amount sought to be evaded’, HC remarks that “we may fall back on the statutory provisions in relation to which, this compounding fee is prescribed.”; Notes that Sec. 276C links the severity of punishment on the amount sought to be evaded and thus, in turn has relation to the attempt at evasion of tax, penalty or interest; Accordingly, HC concludes that “when the CBDT circular refers to the amount sought to be evaded, it must be seen and understood in light of the provisions contained in section 276C(1) and in turn must be seen as amount sought to be evaded.…”:HC