Co-operative society credit facilities remain eligible for section 80P deduction where the entity is not a co-operative bank.

A co-operative society providing credit facilities to its members was treated as eligible for deduction under section 80P(2)(a)(i) because it was registered as a co-operative society, was not registered with the RBI as a bank, and did not carry on banking business in the sense contemplated by banking law. Mere lending to members did not make it a co-operative bank. Section 80P(4) was therefore held inapplicable, and the statutory deduction remained available.

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Issues: Whether a co-operative society engaged in providing credit facilities to its members and not holding a banking licence was entitled to deduction under section 80P(2)(a)(i), or was excluded by section 80P(4) as a co-operative bank.

Analysis: The Tribunal followed the jurisdictional High Court decisions and the precedent in the assessee's own case to hold that the mere provision of credit facilities to members does not by itself make the society a co-operative bank. The decisive factors were that the assessee was registered as a co-operative society, was not registered with the RBI as a bank, and did not carry on banking business in the sense contemplated by the banking law. On that basis, section 80P(4) was held inapplicable and the statutory deduction continued to be available under section 80P(2)(a)(i).

Conclusion: The assessee was entitled to deduction under section 80P(2)(a)(i), and the Revenue's challenge failed.

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