The assessee was prosecuted under sections 276C and 277 of the Income-tax Act, 1961 for failure to show the investment in the form of bank balance in a foreign bank account. The assessee filed a criminal petition under section 482 of the Code of Criminal Procedure, 1973 which was dismissed by the single judge. The assessee’s special leave petition against this order was pending. The assessee also filed an application for compounding the offence under section 279 of the Act which was rejected by the Director General (Investigation) on the ground that it was not a fit case for compounding according to the circular dated May 16, 2008 issued by the Central Board of Direct Taxes. The assessee filed a writ petition against this order. The single judge set aside the order and remitted the matter to the Committee prescribed under the Central Board of Direct Taxes Guideline No. 7.1 (c) dated May 16, 2008 and granted liberty to place a copy of his order along with a fresh compounding petition under section 279 of the Act and directing the Committee to pass appropriate orders in accordance with law in the light of the observations made in his order. Accordingly the assessee filed a fresh application for compounding the offences before the Committee. The application was rejected based on the Board’s circular dated May 16, 2008 under section 279(2). On a contempt petition under section 11 of the Contempt of Courts Act, 1971 read with article 215 of the Constitution of India,  dismissing the petition the Court held that  (i) that though the single judge had given categorical findings that there was no impediment on the part of the Department to compound the offence under section 279(1A) of the 1961 Act, in the operative portion of the order, he had directed the Director General (Investigation) to pass appropriate orders in accordance with law. Therefore, the assessee had filed a fresh compounding application before the respondents, which was disposed of by the order in question by the respondents. Though the single judge had directed the respondents to pass an order keeping in mind the observations made in the order there was no positive direction in such order. If he had taken a view that application for compounding the offences was to be allowed, he would have quashed the order dated January 15, 2014 and allowed the writ petition. But he had merely observed that just because the order reducing the penalty had been challenged in the tax case appeals, it could not be said that the order reducing the penalty itself had been kept in abeyance, and that in such background, it could only be said that the assessee would be entitled to the benefit of section 279(1A) of the 1961 Act and the mere challenge to the order reducing the penalty would not suffice to deny such a benefit, that in view of these subsequent developments and that there could not be any impediment on the part of the Department to compound the offences under sections 276C and 277. Therefore, there was no merit in the contempt petition. Court also observed that   That when the assessee filed the second compounding application on September 9, 2019, the Central Board of Direct Taxes Circular dated June 14, 2019, had already been replaced by circular dated June 14, 2019, wherein the Central Board of Direct Taxes had classified the offence into two categories and offences under sections 275A, 275B and 276 of the 1961 Act would not be compounded. Therefore, according to that circular offences for which the assessee was being prosecuted fell in category B of the circular. When the earlier petition was taken up for hearing and the orders were passed on August 9, 2019, the new guideline was already in force. Though, the new guideline was to apply for fresh applications filed after June 17, 2019, nevertheless the guidelines reflected the policy of the Central Board of Direct Taxes. It would be unfair to discriminate between applicants whose applications were already pending and those applicants whose applications were filed thereafter. The aspect that under section 279(1A) of the 1961 Act a person should not be proceeded against for an offence under sections 276C and 277 in relation to the assessment for an assessment year in respect of which the penalty imposed or imposable on him under clause (iii) of sub-section (1) of section 271 had been reduced or waived by an order under section 273A ought to have been considered. The respondents ought to have considered the factors of reduction of penalty by the Commissioner (Appeals), the assessee’s age and his status in society while deciding the case. The fact that the assessee had been subjected to prosecution from 2011 was itself an adequate punishment. If the assessee had no other cases against him, the respondents should consider the compounding application for compounding the offence in favour of the assessee subject to payment of appropriate compounding fees by him. The application filed by the assessee was to be re-examined by the respondents in the light of the liberalised policy of the Central Board of Direct Taxes in its clarification dated June 14, 2019 since the assessee’s application was considered after the new guideline came into force, the provisions of section 279(1A) and other facts. For the same reason, it could not be construed that the respondents had committed contempt of this court since the order did not specify the same. (AY. 2002-03)