Primary Agricultural Credit Society classification governs section 80P deduction, preventing a fresh income-tax inquiry into business objects.

A co-operative society classified by the competent authority under the Kerala Co-operative Societies Act as a Primary Agricultural Credit Society was held entitled to deduction under section 80P(2). The Tribunal applied the jurisdictional High Court's ruling that, for section 80P purposes, income-tax authorities cannot disregard the statutory classification and re-examine the society's principal object or business. The Revenue's objection based on section 80P(4) was rejected on that basis, and the contrary revisionary-jurisdiction decision was distinguished as not governing the issue. The deduction was therefore allowed and the connected cross-objections did not survive.

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Issues: Whether a co-operative society registered as a Primary Agricultural Credit Society under the Kerala Co-operative Societies Act, 1969 was entitled to deduction under section 80P(2) of the Income-tax Act, 1961, notwithstanding the Revenue's objection based on section 80P(4).

Analysis: The society had been classified by the competent authority under the State co-operative law as a Primary Agricultural Credit Society. The Tribunal relied on the jurisdictional High Court's ruling that, where such classification exists, the income-tax authorities cannot go behind the statutory classification to re-examine the society's principal object or business. On that basis, the Tribunal held that the society fell within the category entitled to the benefit of section 80P(2). The contrary reliance on an earlier decision dealing with revisionary jurisdiction was distinguished as not governing the present controversy.

Conclusion: Deduction under section 80P(2) was rightly allowed, and the Revenue's appeals failed.

Final Conclusion: The assessee's status as a Primary Agricultural Credit Society entitled it to the statutory deduction, so the Revenue's challenge did not succeed; the connected cross-objections also did not survive after dismissal of the appeals.

Ratio Decidendi: Where a society is classified as a Primary Agricultural Credit Society by the competent authority under the applicable State co-operative law, the income-tax authorities must give effect to that classification for section 80P purposes and cannot undertake a fresh inquiry into its principal object or business.

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