On a writ petition against an order of the Director General (Inv) rejecting the application under section 279(2) of the Income-tax Act, 1961 filed by the assessee seeking compounding of the offences under sections 276C and 277 of the Act, for the assessment year 2002-2003, the single judge held that the order refusing to compound the offences was not justified (K.M. Mammen v. Pr. CIT, (2022) 445 ITR 266 (Mad)(HC)  remanded the case to the Director General (Inv) with a direction to compound the offences. On appeal by the Department contending that inasmuch as the reduction in penalty by the Commissioner (Appeals) or the Tribunal could not be treated as an order under section 273A of the Act and would thus not be covered under section 279(1A) of the Act and that in any view, the decision in Prem Dass v. ITO, (1999) 236 ITR 683 (SC) was distinguishable, the Division Bench of the High Court dismissed the Department’s appeal. SLP of the revenue was dismissed, leaving the questions of law open. The court directed the Department to calculate the compounding fee and communicate it to the assessee within a period of 60 days and granted the assessee time of one month from the date on which the exact amount was communicated to the assessee to pay the compounding fee as determined. (AY. 2002-03)