As per Section 2(17) of the Income Tax Act, 1961, unless the context otherwise requires, the term “company” means:
(i) any Indian company, or
(ii) any body corporate incorporated by or under the laws of a country outside India, or
(iii) 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 assessable or was assessed under this Act as a company for any assessment year commencing on or before the 1st day of April, 1970, or
(iv) 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;
Provided that such institution, association or body shall be deemed to be a company only for such assessment year or assessment years (whether commencing before the 1st day of April, 1971, or on or after that date) as may be specified in the declaration.
Companies are commonly understood to be legal entities that are formed for the sole purpose of engaging in commercial activity. It is established with a distinct legal identity from that of its owners, and it is subject to liabilities that are distinct from those of its owners.