TDS credit and India-UAE treaty relief require verification before final grant of tax credit.

Processing of the return under section 143(1) did not fully examine the assessee's non-resident status, the India-UAE DTAA relief claim, or the correct allocation of income taxable in India and exempt income under the treaty. Because only partial TDS credit had been allowed against the Form 26AS reflection, verification by the Assessing Officer was necessary before final grant of credit. The matter was therefore remitted for fresh examination of treaty eligibility, taxable income, and corresponding tax credit, with due credit to be allowed in accordance with law.

---

---

Issues: Whether the denial of credit for tax deducted at source and the related claim for relief under the India-UAE Double Taxation Avoidance Agreement required verification by the Assessing Officer.

Analysis: The return had been processed under section 143(1) of the Income-tax Act, 1961, and credit was allowed only partly against the tax reflected in Form 26AS. The record showed that the assessee's status as a non-resident and the claim based on treaty relief under the India-UAE Double Taxation Avoidance Agreement had not been fully examined at the processing stage. The appellate authority had therefore restored the matter for verification of the income taxable in India, the exempt income under the treaty, and the corresponding tax credit. On the same material, the Tribunal found that the verification exercise was necessary before final grant of credit.

Conclusion: The issue is decided in favour of the assessee, and the matter stands remitted for fresh verification and grant of due credit in accordance with law.

---