It would be difficult to find a definition of the Association of Persons (AOP) in Indian law. Although there are no direct definitions, the General Clauses Act of 1897 defined an association, while a person was defined. A PDO arises from the relationship that is established between the parties. It can be a consortium or a joint venture that can be registered or unregistered. The meaning attributed to the term PDO can be understood in a Supreme Court case (CIT v. Indira Balkrishna (1960) 39 ITR 546 (SC)) which defines it as an association composed of two or more persons bringing together individuals for a common purpose or collective act. An association must be an association whose objective must be to generate income, profits or profits. This article talks in detail about the Association of Persons (AOP). For the purposes of this clause, an association of persons or an entity of individuals, local authorities or artificial legal persons shall be considered to be a person, whether created or created for the purpose of generating income, profits or profits. Therefore, the only difference between the AOP and the BOI lies in the composition of its members. AOP / BOI can be constituted by the simple conclusion of a document containing objectives, the names of the members, the share of the members in the profits, the date of creation, their rules, their statutes, the frequency of meetings of the members or directors, the powers of management, the amount of capital introduced by the members, etc.
The crystallized legal view is that the following elements of an association of persons must exist: the Supreme Court of Andhra Pradesh has defined in one of its cases the principles of a PDO. It clearly indicates that an association of persons does not necessarily mean all combinations of persons. It is only applicable if the participants join an income-generating activity. People must unite to participate in such an operation and the commitment must be made under the common voluntary will of the people who form the association. There are therefore obvious differences between associations of persons and organizations of persons. Below is a model of articulation agreement. Actual conditions and course equivalencies vary by program. Anything highlighted in yellow requires information specific to the agreement (name of the partner institution, therefore, an association of persons (AOP) as a member can have companies, companies, common families and associations (MMIpoh vCIT (67 ITR 106)). It is clear that undertakings which have embarked on a joint venture may also be an entity which can be operated as a PDO, as owned in Ganga Metal Refining CoPte Ltd vCIT (67 ITR 771).
In various court statements, the courts have pronounced the essential elements that constitute a PDO. Indeed, the words “association of persons” have not been used in a technical sense, but must be interpreted in their ordinary simple meaning. They must unite to carry out such an activity, the engagement must be made to the common will of the people who form the association. There must be a meeting of heads, so to speak. In short, there must be a common conception to generate income, if there is no common conception, there is no association. The common interest is not enough. Income generation is not enough. The Supreme Court of Andhra Pradesh, after reviewing earlier decisions in Deccan Wine and General Stores vCIT (106 ITR 111), established the principles of a PDO by stating that it was clear that an association of persons does not mean all combinations of persons; It is only when they join an income-generating activity that they become an association of people. In analyzing its general importance, the Supreme Court found in CIT vIndiraBalkrishna (39 ITR 546) that the word “associate” according to the Oxford Dictionary means to join a common goal or join an appeal. .