Credit co-operative society deduction under section 80P upheld, with rectification permitted for an unclaimed return error.

A credit co-operative society whose primary object was to provide credit facilities to its members remained distinct from a co-operative bank, so the exclusion in section 80P(4) did not apply and deduction under section 80P(2)(a)(i) was available. The amendment to section 2(24)(viia) and the CBDT clarification did not remove that deduction for such societies. The appellate authority could also grant the lawful deduction even though it had not been claimed in the return, and the error in the e-return was treated as capable of rectification under section 154.

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Issues: Whether a credit co-operative society, not claiming deduction in the return, was entitled to deduction under section 80P(2)(a)(i) of the Income-tax Act, 1961, and whether the claim could be allowed by rectification under section 154.

Analysis: The deduction under section 80P(4) is excluded only in relation to a co-operative bank, and the expression "co-operative bank" is to be understood in the sense assigned by Part V of the Banking Regulation Act, 1949. A credit co-operative society whose primary object is to provide credit facilities to its members is distinct from a co-operative bank and does not fall within that exclusion. The amendment to section 2(24)(viia) and the CBDT clarification did not take away the deduction available to such societies under section 80P(2)(a)(i). The appellate authority was also competent to grant the lawful deduction even though it had not been claimed in the return, and the mistake in the e-return was treated as rectifiable.

Conclusion: The assessee was entitled to deduction under section 80P(2)(a)(i), and the rectification-based grant of that deduction was upheld.

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