TDS credit verification must be completed by the Assessing Officer before allowing credit; indemnity bonds and Form 26AS require reconciliation.

Dispute concerns allowance of TDS credit where entries are absent from Form 26AS or deposit by the deductor is unconfirmed; appellate authority endorsed conditional grant of credit subject to the Assessing Officer carrying out verification of records, reconciliation with Form 26AS and consideration of evidence including an indemnity bond, rather than an automatic acceptance. The operative effect requires the AO to verify evidence and only then allow TDS credit, preserving the statutory verification mechanism under TDS rules and rejecting a blanket shift of entitlement without safeguards.

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Issues: Whether the learned CIT(A) erred in directing the Assessing Officer to allow credit for TDS not reflected in Form 26AS and/or not deposited by the deductor on the basis of evidence produced and an indemnity bond, without independent confirmation of deposit under section 199(1) read with Rule 37BA.

Analysis: The Tribunal considered the return, 143(1) intimation, rectification proceedings and the particulars of short granted TDS claimed by the assessee. The learned CIT(A) directed the AO to grant TDS credit as reflected in Form 26AS and to verify claims for TDS deducted but not reflected in Form 26AS on the basis of evidence produced by the assessee and an indemnity bond. The Tribunal noted that the CIT(A)'s direction was conditional and required the AO to carry out necessary verification rather than ordering an outright grant of credit. The Tribunal therefore examined whether the CIT(A) had bypassed the statutory verification mechanism or improperly shifted the onus to the AO without safeguards, and found that the CIT(A) expressly required verification before granting credit.

Conclusion: The Tribunal upheld the findings of the learned CIT(A), concluding that there was no infirmity in directing the AO to verify records and evidence (including Form 26AS and indemnity bond) before allowing TDS credit. The Revenue's grounds challenging that direction are dismissed and the Revenue's appeal is dismissed; the assessee's cross objection is rendered infructuous and dismissed.

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