TDS credit cannot be refused for missing Form 26AS entry when deduction and taxed income are otherwise proved.

TDS credit cannot be denied merely because the tax deducted does not appear in Form 26AS where the assessee substantiates deduction through invoices, bank records, reconciliation and deductor correspondence, and the related income has already been offered to tax. Once deduction at source is established, the payee cannot be made to pay the same tax again because the deductor failed to deposit it or the system does not reflect the credit; recovery lies against the defaulting deductor. The Assessing Officer must therefore verify the evidence and allow credit for tax deducted from income already taxed.

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Issues: Whether TDS credit can be denied to the assessee merely because the deducted tax does not appear in Form 26AS, despite documentary evidence showing deduction from payments made and corresponding income having been offered to tax.

Analysis: The assessee produced return particulars, invoices, bank statements, reconciliation, and correspondence with the deductors to show that the receipts were net of TDS and that the corresponding income had been taxed. The Revenue did not dispute the underlying receipts, the offered income, or the supporting evidence, and relied only on non-reflection in Form 26AS. The governing principle applied is that once tax is deducted at source, the payee cannot be asked to pay it again merely because the deductor has failed to deposit it or the credit is not reflected in the system; the statutory machinery provides recovery from the defaulting deductor. On that basis, the matter required factual verification of the assessee's evidence rather than a mechanical denial of credit.

Conclusion: TDS credit cannot be denied solely for non-reflection in Form 26AS where deduction and corresponding income are otherwise substantiated; the Assessing Officer must verify the evidence and grant credit for the tax deducted from the income offered to tax.

Ratio Decidendi: Once deduction of tax at source from income is established, the Revenue is barred from recovering the same amount again from the deductee, and TDS credit cannot be refused merely because the deductor failed to deposit the tax or reflect it in Form 26AS.

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