residential status

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viswanath (Querist)

07 July 2009 During a financial year, all the directors of a company reside abroad. But the company carried on its activities in India. Can the company's residential status be "non-resident"?

chetan soni

chetan soni (Expert)

07 July 2009 It will be same as per my earlier reply.

Manmohan ACA, CS

Manmohan ACA, CS (Expert)

07 July 2009 As per sec 6(3)Any Indian company is always resident in India.

further as per section 2(26) "Indian Company" means a company formed and registered under the Companies Act, 1956 (1 of 1956), and includes—
(i) a company formed and registered under any law relating to companies formerly in force in any part of India (other than the State of Jammu and Kashmir and the Union territories specified in sub-clause (iii) of this clause[(ia) a corporation established by or under a Central, State or Provincial Act;
(ib) any institution, association or body which is declared by the Board to be a company under clause (17);]
(ii) 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;
(iii) in the case of any of the Union territories of Dadra and Nagar Haveli, Goa,119 Daman and Diu, and Pondicherry, a company formed and registered under any law for the time being in force in that Union territory:]
Provided that the [registered or, as the case may be, principal office of the company, corporation, institution, association or body] in all cases is in India

taxindiaconnect

taxindiaconnect (Expert)

16 July 2009 The status of a company would be of resident in India if it is incorporated in India. The concept of all directors being abroad is helpful in determining the residential status of a company being a company incorporated else where in world except in India. This means if a company is incorporated in say in USA, all it's directors are in USA, but this company operates in India through any branch or sub, then in addition to the ground that the company is not incorporated in India and thus is not a tax resident of India, the directors being outside India support this contention. By board situated outside India of a company incorporated in India, it can not be argued that the company is non resident in India. You may refer to case of Radha Rani Holding Pte. Limited by Delhi ITAT on the subject.

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