Section 80P exemption for co-operative societies was not referable where the issue was already settled by binding precedent.

A reference under section 256(2) was refused because the proposed question did not arise from the Tribunal's order. The court noted that the issue was already covered by an earlier Division Bench ruling in the assessee's own case, which explained that section 80P(2)(a)(i) applies to co-operative societies engaged in banking or providing credit facilities to members, and that incidental credit sales or similar facilities do not by themselves constitute such banking activity. In light of that binding precedent, no referable question of law existed and the request for reference was dismissed.

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Issues: Whether a reference under section 256(2) of the Income-tax Act, 1961 could be directed on the question whether interest earned by a co-operative society from non-members on outstanding balances qualified for exemption under section 80P(2)(a)(i) of the Income-tax Act, 1961.

Analysis: The question sought to be referred was held not to arise from the Tribunal's order. The controversy was also treated as concluded by an earlier Division Bench decision in the assessee's own case, which had explained that section 80P(2)(a)(i) applies to co-operative societies carrying on the business of banking or providing credit facilities to their members, and that incidental credit sales or similar facilities do not by themselves amount to such banking activity. In view of the binding earlier decision, no referable question of law was made out.

Conclusion: The prayer for directing a reference was rejected; the application under section 256(2) of the Income-tax Act, 1961 was dismissed.

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