Section 80P deduction for primary agricultural credit societies upheld despite section 80P(4) classification challenge.

A primary agricultural credit society registered under the Kerala Co-operative Societies Act, 1969 remained eligible for deduction under section 80P(2)(a)(i) because the binding jurisdictional High Court precedent treated such societies, when properly classified under State co-operative law, as entitled to section 80P relief despite section 80P(4). The income-tax authorities could not re-examine that statutory classification to deny the deduction, so the assessee's claim was accepted and the Revenue's challenge failed.

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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)(a)(i) of the Income-tax Act, 1961 despite section 80P(4).

Analysis: The assessee-societies were classified as primary agricultural credit societies under the State co-operative law. The binding jurisdictional High Court decision held that such societies, when so classified and functioning within the statutory framework, are entitled to the benefit of section 80P and that the income-tax authorities cannot re-examine that classification for denying the deduction. Following that precedent, the claim for deduction was accepted.

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

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