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(b) of Section 56, in Section 2, the words and figures 'the Companies Act, 1956 (1 of 1956), and' shall be omitted.

41. As per sub-clause (i) of clause (c) of Section 56 of the BR Act, clauses (cci) to (ccvii), as enumerated in sub-clause (i) of clause (c) shall be inserted in Section 5 of the BR Act, after clause (cc). As per clause (cci), 'co- operative bank' means a State Co- operative Bank, Central Co-operative Bank and a Primary Co- operative Bank. As per clause (cciia), 'co-operative society' means a society registered or deemed to have been registered under any Central Act, for the time being in force, relating to Multi-State Co- operative Society or any other Central or State law relating to co- operative societies for the time being in force. As per clause (cciv), 'Primary Agricultural Credit Society' means a co-operative society- (1) the primary object or principal business of which is to provide financial accommodation to its members for agricultural purposes or for purposes connected with agricultural activities (including the marketing of crops); and (2) the bye-laws of which do not permit admission of any other co-operative society as a member. As per the proviso to sub-clause (2) of clause (cciv), the said sub-clause shall not apply to the admission of a co-operative bank as a member by reason of such co-operative bank subscribing to the share capital of such co-operative society out of funds provided by the State Government for the purpose. Clause (ccv) define 'primary co-operative bank' and clause (ccvi) define 'primary credit society'. As per Explanation to clauses (cciv), (ccv) and (ccvi), if any dispute arises as to the primary object or the principal object of any co-operative society referred to in clauses (cciv), (ccv) and (ccvi), a determination thereof by the Reserve Bank shall be final.

43. In view of the provisions under clause (cciv) of Section 5 of the BR Act (inserted vide sub-clause (i) of clause (c) of Section 56 of the BR Act), the primary object or principal business of a Primary Agricultural Credit Society is to provide financial accommodation to its members for agricultural purposes or for purposes connected with agricultural activities (including the marketing of crops). In view of the provisions under Section 5A of the BR Act (substituted by clause (d) of Section 56 of the BR Act), the provisions of the BR Act shall override the bye-laws of a co- operative society, any agreement executed by it, resolution passed by it, etc.

46. In Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax, Calicut [2019 (2) KHC 287] a Full Bench of this Court held that, when the classification of a society, as per the provisions of the KCS Act and the Rules made thereunder, at the time of registration, are solely on the basis of the principal object provided in the bye-laws, it cannot be contended that the certificate of registration of a society as Primary Agricultural Credit Society is a conclusive evidence that the primary object or the principal business undertaken by that society is providing financial accommodation to its members for agricultural purposes or for purposes connected with agricultural activities, and as such, that society is entitled for deduction under Section 80P of the IT Act, by reason of sub- section (4) thereof, merely on the strength of the certificate registration issued under sub-section (1) of Section 8 of the KCS Act. In order to claim the benefit of deduction under Section 80P of the IT Act, after the introduction of sub-section (4) thereof, the assessee society should be a Primary Agricultural Credit Society falling within the definition clause, i.e., clause (oa) of Section 2 of the KCS Act, [which was re- numbered as clause (oaa) by the Kerala Co-operative Societies (Amendment) Act, 2013] read with clause (cciv) of Section 5 of BR Act inserted by sub-clause (i) of clause (c) of Section 56. Once the principal object as per the aforesaid clause is not fulfilled by a Primary Agricultural Credit Society for a particular financial year, such a society will be disentitled from claiming the benefit of deduction under Section 80P of the IT Act, after the introduction of sub-section (4) thereof. After 28.04.2010, in view of the second proviso to the said clause, such societies shall even loose all characteristics of a Primary Agricultural Credit Society, as specified in the KCS Act, the KCS Rules and the bye-laws, except the existing staff strength.