JUDGMENT : T.S. Sivagnanam, J. Prayer: Appeal under Clause 15 of the Letters Patent against the order dated 31.01.2020 in Contempt Petition No.2079 of 2019. 1. This appeal by the Revenue is directed against that portion of the order passed in Cont.P.No.2079 of 2019 dated 31.01.2020, filed by the respondent herein to punish the appellants on the ground that they have wilfully violated the order and direction issued in W.P.No.3929 of 2014 dated 28.08.2019. 2. A brief prelude of the factual position would be necessary, before we examine the correctness of the stand taken by the Registry as regards the maintainability of this appeal. The respondent filed the writ petition in W.P.No.3929 of 2014 to quash the order passed by the first appellant dated 15.01.2014, under Section 279(2) of the Income Tax Act, 1961 (hereinafter referred to as “the I.T.Act”) rejecting the petition filed by the respondent to compound the offence framed against him under Section 276C and Section 277 of the I.T.Act for the assessment year 2002-03. 3. It was alleged by the appellant-Department that when the respondent filed his return of income for the assessment year 2002-03, he has concealed an amount of Rs.2,26,38,372/- deposited in a foreign bank account and therefore, to be prosecuted for offence punishable under Section 276C of the I.T.Act. The respondent filed a petition under Section 279(1) of the I.T.Act for compounding the offence. The first appellant, after referring to the facts of the case and after hearing the Authorized Representative of the respondent, took note of the circular issued by the Central Board of Direct Taxes (CBDT) dated 16.05.2008, wherein guidelines have been laid down by the CBDT with regard to compounding of offence under the Direct Tax Laws. The first appellant, in his order dated 15.01.2014, while rejecting the compounding petition, observed that the respondent cannot claim, as a matter of right, that the offence should be compounded; Clause (g) of para 4.4 of the CBDT circular dated 16.05.2008, states that the first appellant may consider any other relevant ground for not accepting the compounding petition. Further, it was observed that the respondent had effected cross-border transactions and if not for the information received from a foreign Government, the Revenue would have been put to great loss. Further, it was observed that the respondent had effected cross-border transactions and if not for the information received from a foreign Government, the Revenue would have been put to great loss. It was further observed that though the respondent may claim certain infirmity in the nature of the evidence on which the Department relies, the fact is that the signature of the respondent tallies with the signature in the document and this evidence establishes major fraud, insofar as funds have gone out of the country and if not for the information obtained, the monies would have remained untaxed. Further, the respondent in keeping funds abroad, that too, in countries where banking secrecy law shield the investment, is also to be regarded as anti-national activity. Further, the Income Tax Appellate Tribunal (ITAT) has upheld the orders passed by the Revenue, vide order dated 25.02.2013 and the matter is also under investigation by the Enforcement Directorate. The respondent cannot take advantage of the fact that the nature of the documents is not foolproof and accordingly, there is a case for compounding; the respondent has not produced the documents, nor the copies of the accounts to disprove the stand taken by the Department. Thus, considering the nature of the offence and the quantum of income involved, the first appellant held that it is not a fit case for compounding the offence committed and the respondent’s case will fall under para 3, 4.4(b), 4.4(c) and 4.4(g) of the circular dated 16.05.2008 and therefore, the petition deserves to be rejected. 4. The learned Writ Court, after taking note of the submissions on either side, observed that the objection of the appellant-Department is that the order passed by the Tribunal, reducing the quantum of penalty, has been challenged by the Department before this Court by filing a tax case appeal and this cannot be a reason to deny the benefit of Section 279(1-A) of the I.T.Act to the respondent. The reliance placed on the observations made by the Court in Crl.O.P.No.9065 of 2011, dated 28.02.2019 in a petition filed by the respondent under Section 482 Cr.P.C., to quash the criminal complaint, the Court held that the observation made in paragraph 19 of the said order dated 28.02.2019, is per incuriam and the observation made therein is not the proper appraisal and cannot be relied on. In this regard, the Court referred to the decisions of the Hon’ble Supreme Court in Prem Dass vs. ITO [ (1999) 5 SCC 241 ]. Ultimately, the writ petition was disposed of by order dated 28.08.2019, and the operative portion of the order reads as follows:- “10. In the light of the above observations, the impugned order passed by the first respondent herein under Section 279(2) of the Income Tax Act, 1961 dated 15.01.2014 is set aside and the matter is remanded back to the Committee prescribed under the CBDT Guideline No.7.1(c) dated 16.05.2008. The petitioner is granted liberty to place a copy of this order along with afresh compounding petition under Section 279 of the Income Tax Act, before the Committee, within a period of 30 days from the date of receipt of a copy of this order. On receipt of the aforesaid application along with a copy of this order, the Committee shall consider the same, in the light of the observations made in this order and pass appropriate orders in accordance with law within a period of 60 days there from. The Writ Petition stands allowed accordingly.” 5. In terms of the above, the order passed by the first appellant rejecting the compounding petition dated 15.01.2014, was set aside and the matter was remanded back to the Committee prescribed under the CBDT guidelines more particularly, in paragraph 7.1(c) dated 16.05.2008; the respondent was granted liberty to place a copy of the order passed in the writ petition along with a fresh compounding petition under Section 279 of the I.T.Act before the Committee within a time frame and the Committee shall consider the same in the light of the observations made in the order and pass appropriate orders in accordance with law within a period of 60 days there from. The writ petition stood allowed, accordingly. 6. The Revenue had not challenged the order passed in the writ petition by filing an appeal, allowing the order to attain finality. The respondent complied with the directions issued by the learned Writ Court and submitted a fresh compounding petition dated 10.09.2019. This was rejected by the first appellant, vide order dated 06.11.2019, for the following reasons:- “2. ............ (a) the assessee has cross border transactions, but for the information received from a foreign Government, the Revenue would have been put to loss. This was rejected by the first appellant, vide order dated 06.11.2019, for the following reasons:- “2. ............ (a) the assessee has cross border transactions, but for the information received from a foreign Government, the Revenue would have been put to loss. (b) the evidence gathered in the instant case establishes major frauds in so far as funds have gone out of the country and if not for the information obtained, the monies would have remained untaxed. (c) the assessee has neither produced the documents nor the account copy to disprove the contentions of the department. The attitude of the assessee was of total non-cooperation in the entire proceedings before the Assessing Officer on this issue.” An annexure to the above order contains the reasons as to why the application was rejected, which forms part and parcel of the order dated 06.11.2019 and requires to be read along with the said order. 7. The respondent did not challenge the said order dated 06.11.2019, by filing a writ petition as was done by him in the earlier round, but chose to file Cont.P.No.2079 of 2019 stating that the first appellant wilfully neglected the directions issued by the learned Writ Court in its order dated 28.02.2019, and the order amounts to interference with the administration of justice and the appellants are liable to be punished for contempt. The contempt petition was heard by the Court and by order dated 31.01.2020, the Court found that there is no merit in the contempt petition. The following observation has been made by the Court in support of its conclusion:- “29. Though the learned Single Judge has given categorical findings that there was no impediment on the part of the Department to compound offence under Section 279(1A) of the Income Tax Act, 1961, yet, in the operative portion of the order, the learned Single Judge has directed the respondent to pass appropriate orders in accordance with law. The relevant portion of Section 279(1A) of the Income Tax Act, 1961 reads as under:- “Section 279. The relevant portion of Section 279(1A) of the Income Tax Act, 1961 reads as under:- “Section 279. Prosecution to be at the instance of Chief Commissioner or Commissioner:- 1 ………………………………………………… (1A) A person shall not be proceeded against for an offence under section 276C or section 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 has been reduced or waived by an order under section 273A.] 2 ………………………………………………… 3 …………………………………………………” 30. In the light of the said direction, the petitioner filed a fresh compounding application on 09.09.2019 before the respondents, which was disposed by the respondents vide impugned order dated 06.11.2019. 31. In my view, though the learned Single Judge has clarified the portion yet he has directed the respondents to pass order keeping in mind the observations made in the order. There is no positive direction in the said order. In case, the learned Single Judge had taken a view that application for compounding the offences was to be allowed, the learned Single Judge would have quashed the order dated 15.01.2014 and allowed the Writ Petition as prayed. The learned Single Judge has merely made passing comment in para 8.6, which is reproduced below:- “8.6. The only objection to such a proposition from the Department is that the order passed by the Tribunal, reducing the penalty, has been challenged in Tax Case Appeal before this Court. It is not the case of the Department that this Court had stayed the order of the Commissioner of Appeals, as well as the Tribunal in the Tax Case Appeals. Just because the order reducing the penalty has been put under challenge in the Tax Case Appeals, it cannot be said that the order reducing the penalty itself has been kept under abeyance. In this background, it can only be said that the petitioner would be entitled to the benefit of Section 279 (1A) of the Act and the mere challenge to the order reducing the penalty may not suffice to deny such a benefit. In view of these subsequent developments, there cannot now be any impediment on the part of the Department to compound the offences under Sections 276C and 277 of the Act. 32. Therefore, I do not find any merits in the present Contempt Petition.” 8. In view of these subsequent developments, there cannot now be any impediment on the part of the Department to compound the offences under Sections 276C and 277 of the Act. 32. Therefore, I do not find any merits in the present Contempt Petition.” 8. After the learned Contempt Court held that there is no merit in the contempt petition, it did not stop there, but proceeded to issue certain directions. The appellants are aggrieved by the said directions and the observations made by the learned Writ Court leading to the said directions, which are quoted herein below:- “35. Though, the above guideline was to apply for fresh applications filed after 17.06.2019, nevertheless the guidelines reflect the policy of the Central Board of Direct Taxes. It would be unfair to discriminate between the applicants whose applications were already pending and those applicants whose applications were filed thereafter. Even on 20.12.2019 & 20.01.2020 when the case was argued before this Court, there was no mention made about the latest CBDT Circular dated 14.06.2019. The new guideline appears to be more liberal. Indeed, it was also incumbent on the part of the petitioner and the respondent to have brought it to the attention of this Court when W.P.No.3929 of 2014 was taken up for hearing. 36. ............... 37. The respondents shall also consider the age of the petitioner and his status in society while deciding the case of the petitioner. The fact that petitioner has been subjected to the prosecution from 2011 is itself also an adequate punishment. This factor also should be kept in mind by the respondents while disposing the case. If the petitioner has no other cases against him, the respondents shall consider compounding application for compounding the offence favourably in favour of the petitioner subject to payment of appropriate compounding fees by the petitioner. I am therefore of the view that the impugned order is liable to be quashed and the application filed by the petitioner should be re-examined by the respondents in the light of the liberalised policy of Central Board of Direct Taxes in its clarification dated 14.06.2019, Section 279(1A) and other facts mentioned herein. 38. In my view, the petitioner’s case deserves to be considered by the respondents in the light of the liberalised policy since the petitioner’s application was entertained after the new guideline came into force. 38. In my view, the petitioner’s case deserves to be considered by the respondents in the light of the liberalised policy since the petitioner’s application was entertained after the new guideline came into force. Also for the same reason, it cannot be construed that the respondents committed contempt of this court since the order did not specify the same. 39. The respondents shall pass appropriate orders within a period of three months from the date of receipt of a copy of this order in the light of the observation contained herein. Needless to state, petitioner shall also be heard in person or through authorised representatives/legal representatives. 40. The present Contempt Petition is dismissed with the above observations. No cost. Consequently, connected Sub Applications are also closed.” 9. We have elaborately heard Mr.A.P.Srinivas, learned Senior Standing Counsel for the appellants and Mr.N.L.Rajah, learned Senior Counsel for Mr.S.Ashok Kumar, learned counsel for the respondent. 10. By placing reliance on the decision of the Hon’ble Supreme Court in J.S.Parihar vs. Ganpat Duggar & Ors. [ (1996) 6 SCC 291 ], it is submitted that the Court exercising contempt jurisdiction, cannot go into the correctness of the order giving rise to the issue of contempt and it is not permissible under Section 12 of the Contempt of Courts Act, 1971. Further, by referring to the decision in the case of Union of India & Ors. vs. Subedar Devassy PV [ (2006) 1 SCC 613 ], it is submitted that the Court while dealing with an application for contempt, cannot traverse beyond the order, non-compliance with which is alleged, it cannot test correctness or otherwise of the order or give additional direction or delete any direction. 11. Further, it is submitted that the direction issued by the learned Contempt Court that the respondent’s case should be re-examined in the light of the liberalized policy of CBDT in its clarification dated 14.06.2019, is beyond the scope of the contempt petition and such direction was not maintainable and the Court was not exercising power under Article 226 of the Constitution of India. When the appeal was admitted, the following prima facie view was taken, vide order dated 29.10.2020, which reads as follows:- “We have heard Mr.A.P.Srinivas, learned Senior Standing counsel for the appellants and Mr.N.L.Rajah, learned Senior counsel for Mr.S.Ashok Kumar, learned counsel for the respondent. 2. When the appeal was admitted, the following prima facie view was taken, vide order dated 29.10.2020, which reads as follows:- “We have heard Mr.A.P.Srinivas, learned Senior Standing counsel for the appellants and Mr.N.L.Rajah, learned Senior counsel for Mr.S.Ashok Kumar, learned counsel for the respondent. 2. This appeal has been filed by the Department, challenging the order and direction issued by the learned Single Bench dated 31.01.2020 in Contempt Petition No.2079 of 2019. 3. It is submitted by the learned counsel for the appellants that though the learned Single Bench found that the Department has not violated the order and direction issued in W.P.No.3929 of 2014 dated 28.08.2019, committed an error in issuing directions to the Department to consider the application already filed by the respondent for compounding of the offence by applying the new guidelines issued by the Central Board of Direct Taxes [‘CBDT’ for brevity] Vide Circular dated 14.06.2019. It is pointed out by the learned Senior Standing counsel that such directions issued by the learned Single Bench is beyond the scope of the Contempt Petition and is beyond jurisdiction. Further, it is pointed out that the offence case registered against the respondent cannot be compounded even under the new guidelines and this aspect has been considered by the concerned committee after the order and direction issued in W.P.No.3929 of 2014 dated 28.08.2019. Further, it is submitted that if the direction issued by the learned Single Bench is allowed to stand, then it will pave way for many such applications, which are not maintainable seeking to apply the policy guidelines of CBDT vide order dated 14.06.2019 and it would open a Pandora’s Box. Further, it is submitted by the learned counsel that the respondent had failed in their attempt to quash the criminal proceedings as the petition filed under Section 482 CrPC in Crl.O.P.No.9065 of 2011 was dismissed by this Court by order dated 28.02.2019, against which, the respondent has filed Special Leave Petition (Crl) Appeal No.6179 of 2019 and has obtained an order of stay of the operation of the judgment dated 28.02.2019 by order dated 26.07.2019. Therefore, it is submitted that the question of reconsidering or considering afresh application for compounding under the new guidelines would not arise. 4. Therefore, it is submitted that the question of reconsidering or considering afresh application for compounding under the new guidelines would not arise. 4. It is submitted by Mr.N.L.Rajah, learned Senior counsel appearing for Mr.S.Ashok Kumar, learned counsel for the respondent that the respondent may be given a short time to enable them to file a counter affidavit, setting out certain facts and also seeking leave to produce certain decisions in support of their claim. Further, it is submitted that the power of the Court in a contempt jurisdiction is curative and there is no error in the order and direction issued by the learned Single Bench in order dated 31.01.2020 by directing the respondent to consider the application afresh under the new guidelines in accordance with law. 5. After we have heard the learned counsels for the parties for a considerable length of time, we are of the prima facie view that the respondent having obtained stay from the Hon’ble Supreme Court, of the order passed in Crl.O.P.No.9065 of 2011 dated 28.02.2019, which petition was filed to quash the prosecution initiated against the respondent, we have our own doubt as to whether at all the committee can entertain an application for compounding of an offence. 6. Be that as it may, the larger question would be as to whether the order and direction issued by the learned Single Bench in its order dated 31.01.2020, after holding that there is no contempt committed by the appellants is maintainable in law. Considering all these facts, we are of the prima facie view that the appellants have made out a case for entertaining this appeal. However, what we have expressed in this order is only a prima facie view and it is open to the parties to advance their submissions, when the appeal is taken up for hearing. For the above reasons, the writ appeal is admitted and the order and direction issued by the learned Single Bench in Paragraph Nos.37, 38 and 39 shall remain stayed till the disposal of the appeal. List for further directions on 03.12.2020.” 12. For the above reasons, the writ appeal is admitted and the order and direction issued by the learned Single Bench in Paragraph Nos.37, 38 and 39 shall remain stayed till the disposal of the appeal. List for further directions on 03.12.2020.” 12. The learned Senior Counsel appearing for the respondent would submit that the learned Contempt Court having held that there is no merit in the contempt petition, took note of the liberalized policy of the Central Government, which was notified, vide circular dated 14.06.2019, and issued direction to the authorities to re-consider the respondent’s application for compounding the offence and by this appeal, the Revenue seeks to set aside such direction thereby, leaving the respondent remediless. As held in J.S.Parihar (supra), the Court having found that no case has been made out to initiate contempt proceedings, was not right in issuing further directions and the Revenue is right in their submission that these directions were beyond the scope of the contempt petition. 13. In Subedar Devassy PV (supra), it was held that if any party is aggrieved by the order, which in its opinion is wrong or against the rules, or its interpretation is neither practicable nor feasible, it should always either approach the Court, which passed the order or invoke the jurisdiction of the appellate court. Rightness or wrongness of the order cannot be urged in contempt proceedings. It was further pointed out that while dealing with an application for contempt, the Court cannot traverse beyond the order, non-compliance with which is alleged, in other words, it cannot say what should not have been done or what should have been done, it cannot traverse beyond the order, it cannot test the correctness or otherwise of the order or give additional direction or delete any direction as that would be exercising review jurisdiction while dealing with an application for initiation of contempt proceedings and the same would be impermissible and indefensible. 14. By applying the above legal principle, we have to necessarily hold that the directions issued by the learned Contempt Court after holding that there is no merit in the contempt petition is beyond the jurisdiction of the Court while considering the contempt petition. Therefore, we have no other option except to interfere and set aside such direction. 15. 14. By applying the above legal principle, we have to necessarily hold that the directions issued by the learned Contempt Court after holding that there is no merit in the contempt petition is beyond the jurisdiction of the Court while considering the contempt petition. Therefore, we have no other option except to interfere and set aside such direction. 15. One more reason, which has convinced us to take the above stand, is with regard to the effect and applicability of the circular issued by the CBDT dated 14.06.2019, which came into effect from 17.06.2019. Admittedly, this circular was not in vogue when the respondent filed his first application under Section 279(2) of the I.T.Act. The Writ Court while testing the correctness of the order dated 15.01.2014, was examining the correctness of the same qua the circular/guidelines which were in vogue when the order was passed, which is the circular dated 16.05.2008. In fact, the learned Contempt Court, in the impugned order, notes that neither the respondent, nor the Revenue had brought to the notice of the Writ Court about the fresh circular dated 14.06.2019, when the writ petition was heard in August, 2019 (filed in 2014). 16. One more aspect, which needs to be noted is with regard to the effective date of such circular, which is stated to be 17.06.2019. We find that these issues neither directly nor indirectly arose for consideration in the contempt petition. There appears to be no pleadings to the said effect. Consequently, the Revenue had no opportunity to put forth their stand. Thus, we are fully convinced that no such direction could have been issued by the learned Contempt Court after having held that there is no merit in the contempt petition. 17. In the light of the above, we are to necessarily set aside the direction issued by the Court in paragraphs 37 to 40 of the impugned order and all the observations, which were made by the Court in paragraphs 32 to 36, which have led to issuance of the impugned directions. 17. In the light of the above, we are to necessarily set aside the direction issued by the Court in paragraphs 37 to 40 of the impugned order and all the observations, which were made by the Court in paragraphs 32 to 36, which have led to issuance of the impugned directions. Having held so, we need to take note of the submissions of the learned Senior Counsel for the respondent that the respondent should not be left without a remedy because his contempt petition was dismissed as being devoid of merit and now we have come to a conclusion that the direction could not have been issued by the Contempt Court, which was beyond the scope of the contempt petition. Bearing this in mind, we are inclined to give liberty to the respondent to file a fresh petition for compounding in which, he may canvass all issues available to him on law as well as on facts and orders and directions which according to them are in their favour as well as the decisions which he chooses to rely upon. 18. In the light of the above, this writ appeal is allowed and the directions issued in paragraphs 37 to 40 are set aside and the observations made in paragraphs 32 to 36 leading to the directions are vacated. Liberty is granted to the respondent to file a fresh petition under Section 279 of the I.T.Act before the first appellant within a period of 30 days from the date of receipt of a copy of this judgment and the same shall be considered in accordance with law within a reasonable time not later than 90 days from the date on which the petition is presented in full form. No costs. Consequently, connected miscellaneous petition is closed.