Section 80P deduction turns on factual enquiry into a co-operative society's activities, not registration status alone.

Eligibility for deduction under Section 80P(2)(a)(i) must be tested on a factual enquiry into the society's actual activities for the relevant year, including the purpose of each loan transaction, and not merely on its co-operative registration or certificate. After the Full Bench ruling in Mavilayi, a denial of deduction cannot rest on classification alone, and Section 80P(4) requires examination of the real nature of the assessee-society's business. A bare reference to a limited agricultural component, without verifying the underlying lending activity, is insufficient. The matter was therefore restored for fresh factual adjudication, with the assessee succeeding to that extent.

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Issues: Whether the assessee was entitled to deduction under Section 80P(2)(a)(i) of the Income-tax Act, 1961, and whether the matter required fresh examination of the assessee-society's activities in light of Section 80P(4).

Analysis: The denial of deduction could not rest merely on the assessee's classification or on the registration certificate issued under the co-operative societies law. After the Full Bench ruling in Mavilayi, the Assessing Officer is required to conduct an enquiry into the factual nature of the society's activities and the purpose of the loan disbursements for the relevant assessment year. A conclusory reference to a minuscule agricultural component, without examining each loan transaction and the actual purpose for which credit was advanced, was insufficient. The earlier view treating the registration certificate as determinative was no longer good law, and the eligibility had to be tested on the factual matrix of the year in question.

Conclusion: The issue was restored to the Assessing Officer for fresh adjudication after factual verification, and the assessee succeeded to that extent.

Ratio Decidendi: Eligibility for deduction under Section 80P must be determined on a factual enquiry into the society's actual activities for the relevant assessment year, and not solely on the basis of its registration status or certificate.

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