Primary agricultural credit society deduction under section 80P upheld despite the exclusion for co-operative banks.

A primary agricultural credit society registered under the Kerala Co-operative Societies Act, 1969 remained eligible for deduction under section 80P(2)(a)(i) of the Income-tax Act, 1961. The jurisdictional High Court precedent treated such societies as entitled to section 80P(2) relief and held that tax authorities cannot disregard the classification made by the competent authority under State co-operative law when the society satisfies that description. On that basis, section 80P(4) did not displace the deduction claim, and the Revenue's challenge failed.

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Issues: Whether the assessee, a primary agricultural credit society registered under the Kerala Cooperative Societies Act, 1969, was entitled to deduction under section 80P(2)(a)(i) of the Income-tax Act, 1961, notwithstanding section 80P(4).

Analysis: The assessee was found to be a primary agricultural credit society classified as such under the State co-operative law. The jurisdictional High Court had already held that such societies are entitled to the benefit of section 80P(2), and that the tax authorities cannot go behind the competent authority's classification under the State Act when the society answers that description. Following that binding precedent, the exclusion in section 80P(4) did not deny the assessee the deduction claimed.

Conclusion: The assessee was entitled to deduction under section 80P(2) of the Income-tax Act, 1961, and the Revenue's challenge failed.

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