The assessee belatedly filed his return of income for AY 2011-12. Consequently, prosecution under section 276CC was initiated against the assessee filed a compounding application. Thereafter, the assessee filed a return of income for AY 2013-14 after the due date, and prosecution under section 276CC was initiated for AY 2013-14. In reply, assessee filed a compounding application which was rejected on the ground that it was not a ‘first offence’ under the Guidelines for Compounding of Offences under Direct Tax Laws, 2014, which was upheld by the Gujarat High Court. On further appeal, the Supreme Court observed that the expression ‘first offence’ is also defined to include any offence which has not been detected by the Department but has been voluntarily disclosed by a person prior to the filing of the compounding application. The Supreme Court overturned the decision of the High Court holding that since offence under section 276CC is said to have been committed on date immediately following due date for furnishing return under section 139(1), offences with respect to both assessment years were committed prior to date of issue of any show cause notice for prosecution and would be covered by expression ‘first offence’.(AY.2011-12, 2013-14)