There may be several reasons for this:
Surrounding smell may be absorbed into the unit. Example could be small from furniture, cigerattes, food.
Bacteria formed by microbes in the warm dark humid environment in the indoor fancoil unit may be causing the smell. Sometimes when the smell is very bad you may need a more intensive chemical treatment to rectify this problem.
Pollutants like smoke from cigeratte or haze could be absorbed by the unit. The solution to this is intense chemical treatment of the air conditioner.