Business controlled from india, in case of RNOR,proviso to section 5(1)

does the word "controlled"
(1) mean only having authority of owner to get reports from top management of the business or
(2) does the word mean actual day to day business operations executed by the top level managers of the business?

i am confused between the above two.
because if the word "controlled" is meant to be as (1) above then the individual (i.e.the owner who is RNOR) is in india for some period and therefore partial control of the business would be done from india atleast for the time he is in india and therefore would it be taxable in his hands in india ??
and the word "controlled" is meant to be as (2) as above the the control would be in outside india and it would non taxable.