Co-operative credit society deduction under section 80P upheld where member-only lending was not treated as co-operative banking.

A co-operative credit society providing credit facilities only to its members was treated as distinct from a co-operative bank for section 80P purposes because it was not shown to hold an RBI banking registration or licence. The jurisdictional High Court's ruling, followed by the Tribunal and the co-ordinate bench in the assessee's own case, confirmed that such member-based lending activity does not attract the exclusion in section 80P(4). The statutory deduction under section 80P(2)(a)(i) was therefore available, and the society was not denied relief on the ground that it was a co-operative bank.

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Issues: Whether a co-operative credit society providing credit facilities to its members was a co-operative bank so as to attract the bar under section 80P(4) of the Income-tax Act, 1961 and thereby deny deduction under section 80P(2)(a)(i).

Analysis: The assessee was a co-operative society engaged in providing credit facilities only to its members and was not shown to be registered with the Reserve Bank of India as a bank. The issue was already covered by the jurisdictional High Court, which held that a co-operative society carrying on lending activities to its members, without a banking licence, is not a co-operative bank for the purpose of the exclusion in section 80P(4). Following that binding precedent and the co-ordinate bench decision in the assessee's own case, the Tribunal found no reason to deny the statutory deduction.

Conclusion: The assessee was entitled to deduction under section 80P(2)(a)(i) and was not hit by section 80P(4).

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