1. Ordinary Resident [Section 6(2)]
A Firm, an Association of persons (AOP) or body of individuals (BOl) is said to be resident in every case except where during that year the control and management of its affairs is situated wholly outside India. It means that if A firm, an association of persons (AOP) or body of individuals (BOl) is controlled from India even partially it will be resident assessee.
The control and management of affairs refers to the controlling and directing power, the head and the brain. It means that decision-making power for vital affairs is situated in India. The control and management means de-factocontrol and management and not merely the right to control or manage.
In case of a firm, it is said that the control and management of firm is situated at a place where partners meet to decide the affairs of the firm. If such place is outside India, it will be said that the control and management is outside India.
There may be a situation where all the partners of a firm are resident in India but even then that firm may be non-resident if its full control and management lies outside India.
A firm, an Association of Persons (AOP) or body of individuals (BOl) cannot claim the status of Not Ordinarily Resident. All these assessees shall be either resident in India or non-resident in India.
A firm, or association of persons shall be non-resident if the control and management of affairs is situated wholly outside India.
Ordinary Resident | Not Ordinarily Resident | Non-Resident |
If control or management of such a firm, an Association of Persons(AOP) or body of individuals (BOI) was wholly or partially in India during the relevant previous year. | A firm, an Association of Persons (AOP) or body of individuals (BOI) cannot claim this status. | If control or management of such a firm, an Association of Persons(AOP) or body of individuals (BOI) was wholly outside India during relevant previous year. |