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CS Executive · Tax Laws and Practice · Direct Tax at a Glance

As per the definition of 'enterprise' in section 173 of the Income-tax Act, 2025, which statement is correct?

An enterprise includes a permanent establishment of a person engaged in the provision of services of any kind. The definition covers persons who are, have been or are proposed to be engaged in listed activities, and it applies whether they operate directly or through units at any location.

  1. AIt covers only companies engaged in manufacturing goods
  2. BIt includes a permanent establishment of a person engaged in provision of services of any kindCorrect
  3. CIt excludes persons who merely propose to engage in an activity
  4. DIt excludes activity carried on through units located at a different place

Explanation

Section 173(b) defines enterprise as a person, including a permanent establishment of such person, who is, has been or is proposed to be engaged in listed activities such as provision of services of any kind. It applies whether the activity is carried on directly or through units at the same or a different place. The other options contradict this wording.

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