Section 80P exclusion for Regional Rural Banks bars deduction despite deeming fiction as co-operative society.

A Regional Rural Bank carrying on banking business is excluded from deduction under section 80P by section 80P(4), which denies the benefit to co-operative banks except as specifically provided. The Circular No. 6/2010 was noted as clarifying that regional rural banks are not eligible for the deduction from assessment year 2007-08, and that the earlier Circular No. 319 had been withdrawn to that extent. The deeming provision treating such a bank as a co-operative society under the Regional Rural Bank Act does not override the statutory exclusion. Accordingly, the deduction under section 80P was not available.

---

---

Issues: (i) Whether a Regional Rural Bank engaged in banking activities is entitled to deduction under section 80P of the Income-tax Act, 1961, notwithstanding section 80P(4).

Analysis: The assessee was a Regional Rural Bank carrying on banking business. Section 80P(4) denies the benefit of section 80P to co-operative banks other than the specified exceptions. The Board's Circular No. 6/2010 clarified that regional rural banks are not eligible for deduction under section 80P from assessment year 2007-08 onwards and that the earlier Circular No. 319 stood withdrawn for that purpose. The Tribunal also followed the view that a Regional Rural Bank engaged in banking activities falls within the exclusion and cannot claim the deduction merely because it is deemed to be a co-operative society under the Regional Rural Bank Act.

Conclusion: The assessee was not entitled to deduction under section 80P.

Ratio Decidendi: A Regional Rural Bank engaged in banking business is excluded from deduction under section 80P by virtue of section 80P(4), and the deeming provision treating it as a co-operative society does not override that exclusion.

---