Offensive racket is punctuated by sound of meditation (7)
I believe the answer is:
noisome
'offensive' is the definition.
('noisome' can be similar in meaning to 'offensive')
'racket is punctuated by sound of meditation' is the wordplay.
'racket' becomes 'noise' ('noise' can be a synonym of 'racket').
'is punctuated by' means one lot of letters goes inside another.
'sound of meditation' becomes 'om' (mystic syllable in Hinduism and Buddhism).
'noise' placed around 'om' is 'NOISOME'.
(Other definitions for noisome that I've seen before include "Harmful - offensive" , "Unpleasantly smelling" , "Offensively smelly" , "Offensively smelling" , "noxious smells" .)