COMPANY SECTION 2(17)

Company [Section 2(17)]
For all purposes of the Act the term ‘Company’, has a much wider connotation than that

under the Companies Act. Under the Act, the expression ‘Company’ means:

(i) any Indian company as defined in section 2(26); or

(ii) any body corporate incorporated by or under the laws of a country outside India, i.e.,
any foreign company; or

(iii) any institution, association or body which is assessable or was assessed as a company
for any assessment year under the Indian Income-tax Act, 1922 or for any assessment
year commencing on or before 1.4.1970 under the present Act; or

(iv) any institution, association or body, whether incorporated or not and whether Indian or
non-Indian, which is declared by a general or special order of the CBDT to be a
company for such assessment years as may be specified in the CBDT’s order.

Classes of Companies

(a) Domestic company [Section 2(22A)] - means an Indian company or any other company which, in respect of its income liable to income-tax, has made the prescribed
arrangements for the declaration and payment of dividends (including dividends on
preference shares) within India, payable out of such income.

Indian company [Section 2(26)] - Two conditions should be satisfied so that a
company can be regarded as an Indian company –

(i) the company should have been formed and registered under any law relating to
companies which was or is in force in any part of India, and

(ii) the registered office or the principal office of the company should be in India.
The expression ‘Indian Company’ also includes the following, provided its registered or
principal office is in India:

(a) A corporation established by or under a Central, State or Provincial Act (like
Financial Corporation or a State Road Transport Corporation),

(b) An institution or association or body which is declared by the Board to be a
company under section 2(17)(iv).

(c) in the case of the State of Jammu and Kashmir, a company formed and registered
under any law for the time being in force in that State.

(d) in the case of any of the Union territories of Dadra and Nagar Haveli, Goa, Daman
and Diu, and Pondicherry, a company formed and registered under any law for the
time being in force in that Union territory.

(b) Foreign company [Section 2(23A)] - Foreign company means a company which is not a domestic company.

(c) Company in which public are substantially interested [Section 2(18)] - The following companies are said to be companies in which the public are substantially interested:
a) A company owned by the Government (either Central or State but not Foreign) or
the Reserve Bank of India (RBI) or in which not less than 40% of the shares are
held by the Government or the RBI or corporation owned by that bank.
b) A company which is registered under section 25 of the Companies Act, 1956 (formedfor promoting commerce, arts, science, religion, charity or any other useful object).
c) A company having no share capital which is declared by the Board for the specified
assessment years to be a company in which the public are substantially interested.
d) A company which carries on its principal business of accepting deposits from its
members and which is declared by the Central Government under section 620A of
the Companies Act to be Nidhi or a Mutual Benefit Society.
e) A company whose equity shares (not being shares entitled to a fixed rate of
dividend) carrying at least 50% of the voting power have been allotted
unconditionally to or acquired unconditionally by and were beneficially held
throughout the relevant previous year by one or more co-operative societies.
f) A company which is not a private company as defined in the Companies Act, 1956
and which fulfills any of the following conditions:
- its equity shares should have, as on the last day of the relevant previous year,
been listed in a recognised stock exchange in India; or
- its equity shares carrying at least 50% (40% in case of industrial companies)
voting power should have been unconditionally allotted to or acquired by and
should have been beneficially held throughout the relevant previous year by
(a) Government or
(b) a Statutory Corporation or
(c) a company in which public are substantially interested or
(d) any wholly owned subsidiary of company mentioned in (c).
(d) Person having substantial interest in the company [Section 2(32)] – is a person who is the beneficial owner of shares (not being shares entitled to a fixed rate of dividend), whether with or without a right to participate in profits, carrying at least 20% of the total voting power.