Section 80P verification requires genuine enquiry into the assessee's actual activities before allowing co-operative society relief.

For section 80P relief, the Assessing Officer must verify the assessee's business character and not rely only on registration or nomenclature, because section 80P(4) makes the true nature of activities material. Where proper enquiry is not made, the assessment can be treated as erroneous and prejudicial to the interests of the Revenue. The revisional direction was understood as requiring a fresh, independent enquiry and not a predetermined conclusion, and the revisional interference was upheld, with the assessment to be reconsidered on merits after necessary verification.

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Issues: Whether the revisional order was justified in holding that the assessment order was erroneous and prejudicial to the interests of the Revenue for want of enquiry into the assessee's real status for the purpose of section 80P and section 80P(4) of the Income-tax Act, 1961.

Analysis: The assessment year in question required the Assessing Officer to examine the factual nature of the assessee's activities before granting relief under section 80P. The mere registration of the assessee as a co-operative society or its nomenclature could not determine entitlement, because section 80P(4) made the actual nature of the business material. Where the Assessing Officer failed to apply mind and to conduct proper verification on this aspect, the order could be treated as erroneous and prejudicial to the interests of the Revenue. The revisional authority's directions were understood as requiring a fresh and independent enquiry, not a predetermined conclusion.

Conclusion: The revisional interference was upheld, and the assessee's challenge failed on merits.

Final Conclusion: The assessment had to be reconsidered by the Assessing Officer after making the necessary enquiries, uninfluenced by the revisional authority's opinions on the final result.

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