Co-operative society deduction under section 80P depends on bye-laws and whether it qualifies as a primary co-operative bank.

Section 80P(2)(a)(i) grants deduction to a co-operative society engaged in banking or in providing credit facilities to its members, but section 80P(4) withdraws that benefit from a co-operative bank other than a primary agricultural credit society or a primary co-operative agricultural and rural development bank. A co-operative society is treated as a primary co-operative bank only if it satisfies all conditions in section 5(ccv) of the Banking Regulation Act, 1949, including that its primary object is banking and that its bye-laws do not permit admission of any other co-operative society as a member. The text notes that banking-like activity alone is insufficient; the bye-laws must be examined to determine whether the exclusion applies.

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Issues: Whether the assessee co-operative society was a co-operative bank hit by section 80P(4), and whether it was entitled to deduction under section 80P(2)(a)(i) subject to examination of its bye-laws.

Analysis: Section 80P(2)(a)(i) allows deduction to a co-operative society engaged in carrying on the business of banking or providing credit facilities to its members, while section 80P(4) excludes only a co-operative bank other than a primary agricultural credit society or a primary co-operative agricultural and rural development bank. A co-operative society becomes a primary co-operative bank only if it satisfies all the conditions in section 5(ccv) of the Banking Regulation Act, 1949, including that its primary object or principal business is banking and that its bye-laws do not permit admission of any other co-operative society as a member. The assessee's objects and deposits indicated banking-like activity, but the record did not contain the bye-laws needed to decide the third condition conclusively.

Conclusion: The matter was remitted to the Assessing Officer to examine the bye-laws and determine whether the assessee permitted admission of any other co-operative society; only then could it be decided whether section 80P(4) applied and whether deduction under section 80P(2)(a)(i) was available.

Ratio Decidendi: For purposes of section 80P(4), a co-operative society is treated as a primary co-operative bank only if all statutory conditions under section 5(ccv) of the Banking Regulation Act, 1949 are satisfied, including the restriction on admission of other co-operative societies under its bye-laws.

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