Non-resident status for advance ruling applications depends on residence tests and corporate status under the Income-tax Act.

A body corporate incorporated outside India qualifies as a company under the Income-tax Act only if it is incorporated under foreign law; a UAE sole proprietorship with no corporate status was not a company and could not invoke the advance ruling mechanism on that basis. Residence under section 6(1)(a) depends on physical presence in India during the previous year, with both entry and exit days counted. On that test, the applicant exceeded 182 days in India and was resident, not non-resident, during the relevant year, so it was ineligible to maintain an application under section 245Q(1).

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Issues: (i) Whether the applicant could be treated as a company for the purpose of maintaining an advance ruling application under Chapter XIX-B of the Income-tax Act, 1961. (ii) Whether the applicant was non-resident during the relevant financial year so as to be entitled to maintain the application under section 245Q(1) of the Income-tax Act, 1961.

Issue (i): Whether the applicant could be treated as a company for the purpose of maintaining an advance ruling application under Chapter XIX-B of the Income-tax Act, 1961.

Analysis: A body corporate incorporated outside India can fall within the definition of company only if it is incorporated under a foreign law. The materials showed that the applicant was registered in the UAE only as a sole proprietorship owned and managed by an individual, and there was no corporate law in the UAE conferring corporate status on it. The entity therefore could not be regarded as a company within section 2(17) of the Income-tax Act, 1961.

Conclusion: The applicant was not a company and could not invoke the advance ruling mechanism on that footing.

Issue (ii): Whether the applicant was non-resident during the relevant financial year so as to be entitled to maintain the application under section 245Q(1) of the Income-tax Act, 1961.

Analysis: For residence under section 6(1)(a), the relevant test was the number of days of physical presence in India during the previous year, and the days of entry and exit were both to be counted. On that basis, the applicant's presence exceeded 182 days in the financial year 1994-95. The suggested method of excluding entry and exit days or converting presence into hours was rejected as impractical and unsupported by data.

Conclusion: The applicant was resident, not non-resident, during the relevant financial year and was therefore not entitled to maintain the application under section 245Q(1).

Final Conclusion: The advance ruling application was not entertainable because the applicant failed to satisfy the statutory eligibility requirement of being a non-resident, and the Authority declined to answer the referred questions.

Ratio Decidendi: For section 245Q(1), eligibility depends on the applicant's statutory status as a non-resident, and residence under section 6(1)(a) is determined by counting both entry and exit days in India during the previous year.

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