Co-operative society deduction under section 80P survives where the entity is not a co-operative bank.

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 is not denied deduction merely because it accepts deposits and grants credit to its members. Applying the distinction between a co-operative bank and a co-operative society under the Banking Regulation Act, 1949, and the CBDT clarification relied on, the tribunal concluded that the assessee did not fall within the exclusion. The society therefore remained entitled to deduction under section 80P(2)(a)(i), and the revenue's challenge failed.

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Issues: Whether section 80P(4) of the Income-tax Act, 1961 denied deduction under section 80P(2)(a)(i) to a co-operative society engaged in banking or credit facilities to its members.

Analysis: 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 that is not a co-operative bank does not fall within that exclusion merely because it accepts deposits and grants credit to members. The distinction between a co-operative bank and a co-operative society was applied in light of the statutory definition in the Banking Regulation Act, 1949 and the CBDT clarification relied upon in the decision.

Conclusion: Section 80P(4) did not apply to the assessee, which remained entitled to deduction under section 80P(2)(a)(i). The revenue's challenge therefore failed.

Ratio Decidendi: The exclusion in section 80P(4) applies only to co-operative banks and not to co-operative societies providing credit facilities to their members.

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