Deduction for co-operative credit society upheld where section 80P(4) did not apply to a members-only lending society.

A co-operative credit society lending only to its members was entitled to deduction under section 80P(2)(a)(i) because it was not shown to be a co-operative bank. The Tribunal followed its earlier coordinate bench view that section 80P(4) does not deny the deduction merely because the society accepts and lends money to members, where the entity remains a credit society rather than a bank. As no change in facts or law was shown, the prior position was applied and the Revenue's challenge to the deduction failed.

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Issues: Whether a co-operative credit society engaged in lending to its members was entitled to deduction under section 80P(2)(a)(i) of the Income-tax Act, 1961, and whether section 80P(4) excluded it from the benefit as a co-operative bank.

Analysis: The claim for deduction was examined in light of the assessee's character as a co-operative credit society and the settled view in its own earlier years. The Tribunal noted that the assessee was not shown to be a co-operative bank, and that the coordinate bench had already held in similar matters that the exclusion in section 80P(4) does not apply to a co-operative credit society merely because it accepts and lends money to its members. As no change in facts or law was demonstrated, the earlier view was followed.

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

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