So the Quran is saying that Allah will never decrease our good deeds
but the hadith says if we omit Asr, all our good deeds will be lost.
There seems to be a contradiction here. Can somebody comment on this
and clear me off this confusion?
the problem here is the English rendering of the Arabic and asserting that they're implying our "good" deeds to be lost when in fact neither the ayah or the hadith mention anything about "good"
The ayah says:
فَلا تَهِنوا وَتَدعوا إِلَى السَّلمِ وَأَنتُمُ الأَعلَونَ وَاللَّهُ مَعَكُم وَلَن يَتِرَكُم أَعمالَكُم
falaa tahinu wa tad'u 'ilaa a-salmi wa 'antumu l'a'lawna wa llaahu ma'akum wa lan yatirakum 'a'maalakum
So do not slacken and call for peace when you have the upper hand and Allah is with you, and He will not fail/miscarry your works.
The Hadith states:
مَنْ تَرَكَ صَلاَةَ الْعَصْرِ فَقَدْ حَبِطَ عَمَلُهُ
man taraka salaata al'asri faqad habita 'amaloho
Whoever abandons salaat al'asr, failed in work.
It does not necessarily mean our good work has been lost; unless you want to say we're losing benefit in that particular thing and not everything.
When Allah wants to speak about "good", He mentions it clearly:
إِنَّ الحَسَناتِ يُذهِبنَ السَّيِّئَاتِ
inna alhasanaati yudhheebna a-sayyi-aati
...Indeed goodness efface misdeeds...
Allah never says the opposite in that particular way. So there's no clear indication that bad deeds cancel out, or nullify, good deeds
Another things about the hadith. One of the reporters, Yahya b. Abi Kathir is a mudallis (reference: Abu Jafar al-Aqili), i.e. reports unclear from where he got the hadith.
He doesn't mention whether he heard or was told this narration from Abi Qilaabt, and instead, uses "'An". This makes the hadith questionable and not one to be relied upon.