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Issues: (i) Whether the Commissioner, while exercising revisional jurisdiction under section 263, could direct verification of tax deduction at source for roaming charges, commission and discount pertaining to all circles and all TANs, or was confined to the Mumbai circle alone; (ii) Whether commission and discount paid to dealers were liable to tax deduction at source.
Issue (i): Whether the Commissioner, while exercising revisional jurisdiction under section 263, could direct verification of tax deduction at source for roaming charges, commission and discount pertaining to all circles and all TANs, or was confined to the Mumbai circle alone.
Analysis: Separate TDS returns had been filed for different TANs and were assessed by different TDS officers having jurisdiction over the respective circles. Revisional action under section 263 could therefore be exercised only in relation to the assessment order within the Commissioner's territorial and jurisdictional reach. The Commissioner could not, on the basis of the Mumbai circle assessment, enlarge the scope of revision to cover expenditure pertaining to other circles and other TANs for which separate proceedings and separate appellate remedies existed.
Conclusion: The revisional direction was valid only to the extent it related to the Mumbai circle and was not sustainable insofar as it extended to all other circles and TANs.
Issue (ii): Whether commission and discount paid to dealers were liable to tax deduction at source.
Analysis: The issue was covered against the assessee by the existing binding precedent relied upon by the Tribunal, which held commission payments to be subject to deduction of tax at source under section 194H. On that basis, the finding that the Assessing Officer had not correctly appreciated the assessee's default in respect of commission and discount was upheld.
Conclusion: The finding regarding TDS liability on commission and discount was upheld against the assessee.
Final Conclusion: The order under revision was modified so that inquiry was restricted to roaming charges, discount and commission relating only to the Mumbai circle, while the challenge to TDS liability on commission and discount failed.
Ratio Decidendi: Revisional jurisdiction under section 263 is confined to the specific assessment order and jurisdictional unit before the Commissioner, and cannot be expanded to cover separate TDS assessments of other territorial units; commission payments remain subject to TDS where the governing law so provides.
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