The assessee was being prosecuted under section 279 of the Act, for offences punishable under sections 276C or 277 of the Act.  The petitioner moved application for compounding of offences which was rejected. On writ  petitioner contended that he is  now over 70 years and had been facing prosecution for over a period of a decade for an offence allegedly committed by him during 2001-02 for the assessment year 2002-03. Earlier, the assessee faced adjudication proceedings both under section 148 and penalty proceedings under section 279(2) of the Act. The assessee had paid the tax, interest and the penalty imposed on him.  Court held that the legislative intent of section 279(1A) of the Act had to be kept in mind where there was a reduction of penalty. The Court held that this is a fit case for compounding the offence considering the age of the petitioner and considering the fact that the petitioner has paid the tax, interest and penalty.  The order refusing to compound the offences was not justified. Order was set aside and directed respondents compound the case  subject to the petitioner paying the compounding  fees as determined by the respondents.  (AY.2002-03)