TDS credit cannot be refused for a return omission, but corresponding income must be verified before credit is granted.

TDS credit cannot be denied merely because it was not claimed in the return of income, since section 199 treats tax deducted at source as tax paid on behalf of the assessee and the omission is procedural. Credit, however, must be linked to the corresponding income, so the Assessing Officer must verify whether that income was offered to tax before granting due credit.

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Issues: Whether credit for tax deducted at source could be denied merely because the assessee did not claim it in the return of income, and whether the matter required verification of the corresponding income before credit was granted.

Analysis: The assessee's TDS was reflected in Form 26AS and the omission to claim credit in the return was held to be procedural. Section 199 of the Income-tax Act, 1961 treats tax deducted at source as tax paid on behalf of the assessee, and the credit cannot be refused on a mere technicality. At the same time, the Assessing Officer was required to verify whether the income corresponding to the TDS had been offered to tax before granting the credit.

Conclusion: The denial of TDS credit solely for non-claim in the return was not sustained. The matter was restored to the Assessing Officer for verification and grant of due credit after examining the corresponding income.

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