Primary agricultural credit society deduction under Section 80P upheld despite Revenue's Section 80P(4) objection.

A primary agricultural credit society registered under the Kerala Co-operative Societies Act, 1969 remained entitled to deduction under Section 80P(2) of the Income-tax Act because its statutory classification as a primary agricultural credit society was ative. The jurisdictional High Court's binding view was that income-tax authorities cannot reopen that classification, and that conclusion governed the claim for Section 80P relief. The Revenue's reliance on banking activity and Section 80P(4) did not displace that position on the facts found. The appellate direction to allow the deduction was therefore upheld.

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Issues: Whether the assessee, a primary agricultural credit society registered under the Kerala Co-operative Societies Act, 1969, was entitled to deduction under Section 80P(2) of the Income-tax Act, 1961 despite the Revenue's reliance on Section 80P(4).

Analysis: The assessee was classified as a primary agricultural credit society under the State co-operative law. The jurisdictional High Court had already held that where such classification exists, the income-tax authorities cannot reopen that classification and the society is entitled to the benefit of Section 80P. Following that binding decision, the appellate authority's direction to grant deduction under Section 80P(2) was correct. The Revenue's objection based on banking activity and Section 80P(4) did not alter that conclusion on the facts found.

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

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