The Income-tax Act defines a ‘company’ in a much wider sense than is done by the Companies Act, 1956. According to section 2(17) of the Income-tax Act, 1961, a company means any of the following:
(a) Any Indian company.
(b) Any body corporate, incorporated by or under the laws of a country outside India.
(c) Any institution, association or body which is or was assessable or was assessed as a company for any assessment year under the Indian Income-tax Act, 1922, or which is or was assessed under this Act as a company for any assessment year commencing on or before 1st April, 1970.
(d) Any institution, association or body whether incorporated or not and whether Indian or non-Indian which is declared by general or special order of the Board to be a company. However, the declaration will hold good for only such assessment year or years as are specified in it.
• The Board enjoys the power to declare any association to be a company for purposes of this Act. This power has also been used in the past several years with a view to conferring the status of a company on foreign companies as also on entities which are not otherwise within the scope of that concept. Besides declaring companies registered in foreign countries to be companies for purposes of taxation in India, statutory corporations such as Road Transport Corporation, Air Transport Corporations, etc., have been declared to be companies. The provision has also been used on a few occasions to confer the status of a company on bodies such as Chamber of Commerce, Clubs, etc., even though these bodies do not possess the ordinary characteristics of a company limited by shares.
• A company registered u/s 25 of the Companies Act, 1956 without any profit motive shall also be assessable under the Income-tax Act. u has also been decided in a number of cases that a company in liquidation is as good a company for tax purposes as any other company and, therefore, the liquidator may be asked to as the principal officer of the company, so far as the submission of return of income or assessment of the company is concerned.