Primary agricultural credit society classification governs section 80P deduction despite section 80P(4) for Kerala co-operatives.

Primary agricultural credit societies validly classified under the Kerala Co-operative Societies Act, 1969 were held entitled to deduction under section 80P(2)(a)(i) of the Income-tax Act, 1961 despite section 80P(4). The jurisdictional High Court ruling that income-tax authorities cannot go behind the statutory classification to deny the deduction was applied, and the contrary decision relied on by the Revenue was treated as inapplicable because it arose in a different factual and statutory setting. The Revenue's challenge therefore failed, and the statutory benefit under section 80P was maintained for such societies.

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Issues: Whether the assessees, being primary agricultural credit societies registered under the Kerala Co-operative Societies Act, 1969, were entitled to deduction under section 80P(2)(a)(i) of the Income-tax Act, 1961 despite section 80P(4).

Analysis: The assessees were classified by the competent authority as primary agricultural credit societies under the State Act. The jurisdictional High Court had already held that such societies, when so classified, are entitled to the benefit of deduction under section 80P and that the income-tax authorities cannot go behind that statutory classification to deny the benefit. The adverse reliance on the decision concerning a different factual and statutory setting was held inapplicable to primary agricultural credit societies registered in Kerala.

Conclusion: The assessees were entitled to deduction under section 80P(2)(a)(i); the Revenue's challenge failed.

Ratio Decidendi: A primary agricultural credit society validly classified as such under the Kerala Co-operative Societies Act, 1969 is entitled to deduction under section 80P of the Income-tax Act, 1961, and the income-tax authorities cannot disregard that classification to deny the statutory benefit.

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