When is telling better than showing?

Unfortunately, beginning writers can come away from classes, workshops and books with the wrong idea about the guidelines being taught. They might not distinguish the hard rules, such as verb-subject agreement and correct use of punctuation, from rules of thumb, like using the active voice rather than the passive. The latter are principles and practices that will usually improve your writing. However, they also have exceptions, and if you don't use some judgment, the exceptional cases will either make your writing worse or put you in a straitjacket. 

I love my writers' group. Recently, though, member criticized me for saying "She was despondent." He said I was telling instead of showing. Never mind that the  character was in a place where she wouldn't have shown it, and it was important that the reader know she was feeling that specific emotion.

I agree that in storytelling, showing is better telling, usually. However, like the active vs. passive voice, where the active is preferred 95 percent of the time, you have to be alert for the other five percent.  Showing not telling, all the time everywhere, can cause you to commit fouls against more important writing principles, including clarity and word economy (or brevity).

This is most often true in describing human emotions. The body language that expresses emotions often doesn't translate clearly into words. Instead of "She was despondent," I could say "Her shoulders slumped." But is that clearer? Slumping shoulders can be things other than despondency. So, how to show it's specifically that emotion? I have to add other details. "Tears came to her eyes." But what if that's not even in character? Well, maybe I change my character so it is. Even then, what in that clause says specifically, "despondency" to the reader? It might be she feels tired and has eyestrain. So, it's necessary to add, "Her posture sank," and it's just as ambiguous. If I choose to show all three just to make sure the reader knows what the emotion is and knows it's significant, I come up with, "Her shoulders slumped and tears came to her eyes, while her whole posture deflated."  Never mind that the character was not going to express it visibly, that's fourteen words when I could have used three. Worse, I'm still not certain the reader would interpret it right. This tempts me to "Show and Tell," where after describing all of that, I still feel I have to add "She was despondent [you see?]. That's seventeen words. Also, using just the three word "telling" sentence gives it emphasis. If you're in the midst of showing, showing, showing, and suddenly you tell, the reader will notice it.

("But Fred," you point out, "shoulder slumping is part of posture deflating." You're right. It's a lazy example but speaks to the paucity of brief terms that might physically describe despondency, or something else. It's awfully hard to find one nearly as short as three words.)

Furthermore, showing here is all for naught. Unless the emotion compels the character to do something unusual, you're not showing readers anything they haven't seen. Showing the obvious gets boring fast. They know the physical signs of grief, disgust and happiness, and so on. In fact, readers can imagine it much better than you can describe it. Just tell them what to imagine. As long as you're usually showing, they shouldn't mind.

That is, unless they're coming straight from their creative writing class.

Overemphasizing these rules of thumb without mentioning exceptions and urging good judgment can spoil writing. The worst mistake a writer could make when resolved to show no matter what is to become convinced that if it can't be shown, it's not important. Outside of a spec screenplay, this is totally wrong. Don't limit your writing like that. Any "rule of thumb" should expand your ability to express, and if it doesn't, you're doing it wrong. Or the rule itself is wrong.