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TMI Blog1991 (9) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... e-tax Act, 1961, reads as follows : "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is right in law in holding that amount paid under section 14B of the Employees' Provident Funds Act as damages for default in making payment of provident fund contributions cannot be construed, to be penal in nature and the same is an admissible expenditure?" The nature of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is obviated. Such a penal levy can take the form of damages because the reparation for the injury suffered by the default is more than the narrow computation of interest on the contribution." Again, Mr. Justice Sen conveyed the same idea at page 1816 (at page 304 of 55 FJR), thus : " 46. The traditional view of damages as meaning actual loss, does not take into account the social content of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thorise the Regional Provident Fund Commissioner to impose exemplary or punitive damages and thereby prevent employers from making defaults. The provision for imposition of damages at twenty-five per cent. of the amount of arrear, however, did not prove to he effective. Accordingly, by Act 40 of 1973, the words 'not exceeding the amount of arrear' were substituted for the words 'twenty-five per ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 61] 41 ITR 350, was referred to and relied upon for the conclusion arrived at by us therein. That was a case of penal levy under the provisions of the Central Sales Tax Act which was held as a non-deductible expenditure. Mr. Raghavendra Rao, learned counsel for the Revenue, brought to our notice that a Full Bench of the Allahabad High Court has taken similar view in respect of the levy under sec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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