UPENDRALAL WAGHRAY, J.

( 1 ) THIS is a reference at the instance of the Revenue under section 256 (1) of the Income-tax Act, 1961, in which the following two questions are referred for the opinion of this court :" (1) Whether, on the facts and in the circumstances of the case, the interest paid under section 14b of the Employees Provident Funds Act, 1952, is an allowable deduction under the Income-tax Act, 1961 ? (2) Whether, on the facts and in the circumstances of the case, interest paid on account of delayed payment of sales tax is an allowable deduction under the Income-tax Act, 1961 ?"

( 2 ) THE assessee is a public limited company and the relevant assessment year is 1973-74. Question No. (1) refers to the interest paid under section 14b of the Employees Provident Funds and Miscellaneous Provisions Act, 1952 (hereinafter called "the Act"), but what is payable under that provision is damages. It is useful to extract section 14b of the Act :"14b. Power to recover damages.- Where an employer makes default in the payment of any contribution to the Fund, the Family Fund or the Insurance Fund or in the transfer of accumulations required to be transferred by him under sub-section (2)

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