SECTION 80P l INCOME OF CO-OPERATIVE SOCIETIES
605. Whether regional rural banks can be treated as co-operative societies engaged in carrying on business of banking or providing credit facilities to its members
1. A question has arisen whether regional rural banks (to which the provisions of the Regional Rural Banks Act, 1976, apply) can be treated as co-operative societies for the purpose of section 80P.
2. There is a specific provision, namely, section 22 in that Act, which is to the following effect :
“For the purpose of the Income-tax Act, 1961, or any other enactment for the time being in force relating to only tax on income, profits or gains, a regional rural bank shall be deemed to be a co-operative society.”
3. Therefore, the provisions of section 80P will also be applicable in respect of regional rural banks. In this view deductions admissible under section 80P (2)(a)( i) have to be allowed, in making income-tax assessments of these banks.
Circular : No. 319 [F. No. 178/47/81-IT(A-I)], dated 11-1-1982.
