Primary agricultural credit society status governs deduction under section 80P, and tax authorities cannot override statutory classification.

A primary agricultural credit society registered under the Kerala Cooperative Societies Act was entitled to deduction under section 80P(2), because its statutory classification by the competent authority was ative and supported by the certificate on record. The Tribunal applied the settled position that income-tax authorities cannot independently re-examine that classification to deny the benefit under section 80P(4); on those facts, the disallowance did not survive.

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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) of the Income-tax Act despite the disallowance based on section 80P(4).

Analysis: The decisive factor was the assessee's classification by the competent authority as a primary agricultural credit society under the State cooperative law. The binding legal position applied was that, once such classification exists and the society's status is supported by the statutory certificate, the income-tax authorities cannot re-open that status by probing into the matter independently. The Tribunal followed the High Court's earlier ruling that primary agricultural credit societies so registered are entitled to the benefit of section 80P, and the certificate on record showed the assessee to fall within that category.

Conclusion: The assessee was held entitled to deduction under section 80P(2), and the disallowance based on section 80P(4) did not survive on the facts found.

Ratio Decidendi: A society classified as a primary agricultural credit society under the relevant State cooperative law is entitled to deduction under section 80P, and the income-tax authorities cannot disregard that statutory classification in denying the benefit.

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