ITO, WARD-1, ROURKELA, ROURKELA vs. SANJAY SAHA(HUF), ROURKELA

1 ITA No. 238/Ctc/2026 Assessment Year: 2019-20 C.O.No.10/CTK/2026 Assessment Year: 2019-20

IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE S/SHRI GEORGE MATHAN, JUDICIAL MEMBER AND RAJESH KUMAR, ACCOUNTANT MEMBER ITA No. 238/Ctc/2026 Assessment Year: 2019-20 C.O.No.10/CTK/2026 Assessment Year: 2019-20 ITO, Ward-1, Rourkela Vs. Sanjay Saha (HUF), New Shakti Pustak Bhandar, Kachery Road, NR Mangal Bhawan, Lal Building, Rourkela, 769012 PAN/GIR No. AARHS 2047 E (Appellant) .. ( Respondent) Assessee by : Shri Sanjay Saha (in person) Revenue by : Shri Vijay Singh,Sr.DR Date of Hearing : 27/05/2026 Date of Pronouncement : 27/05/2026 O R D E R Per Bench This is an appeal filed by the assessee against the order of the ld CIT(A), NFAC, Delhi dated 05/01/2026 in Appeal No. NFAC/2018-19/10340295 for the assessment year 2019-20. The assessee has filed cross objection in C.O.No.10/CTK/2026 in appeal filed by the revenue, 2. Shri Sanjay Saha, Karta of the HUF appeared online and Shri Vijaya Singh, ld Sr.DR appeared for the revenue. 3. It was submitted by Karta of the HUF Shri Sanjaya Saha that the appeal of the revenue is delayed by 5 days and the appeal is liable to be dismissed on account of

2 ITA No. 238/Ctc/2026 Assessment Year: 2019-20 C.O.No.10/CTK/2026 Assessment Year: 2019-20 delay. It was then informed to him that the revenue has filed condonation petition and the delay is only 5 days and the reasons have been provided. Consequently, the delay of 5 days is condoned and the appeal of the revenue is heard on merits. 4. It was submitted by ld AR that the Assessing Officer has made addition in respect of long-term capital gains, which has been claimed by the assessee as exempt u/s.10(38)of the Act. It was the submission that the transaction was in regard to the derivative in the case of Steel Exchange of India Ltd., Vishakhapatnam. It was the submission that the said stock of the company was not penny stock. It was the further submission that the Assessing Officer has relied upon some statement of Shri Naresh Jain. It was the submission that Shri Naresh Jain has already been exonerated by ITAT, Mumbai in regard to the transaction done by him. It was then pointed out to Karta of HUF as to whether the assessee has done transaction through Shri Naresh Jain, to which, he submitted that the assessee has not transacted through Shri Naresh Jain. It was the submission that the Assessing Officer has also erroneously applied the provisions of section 69C. it was the submission that the transaction of the assessee is genuine and it is not a case of unexplained money. It was the prayer that the appeal of the revenue is liable to be dismissed. 5. In reply, ld Sr DR submitted that the ld CIT(A) has deleted the addition on the ground that natural justice has been violated. It was the submission that the ld CIT(A) has not given any detailed findings on what basis, he is deleting the addition. He has not brought out any facts in the order of the ld CIT(A). It was the prayer that the order of the ld CIT(A) be reversed and that of the order of the AO restored.

3 ITA No. 238/Ctc/2026 Assessment Year: 2019-20 C.O.No.10/CTK/2026 Assessment Year: 2019-20 6. We have considered the rival submissions. It is the submission of ld AR that the cross objection is in support of the order of the ld CIT(A). A perusal of the facts in the present case clearly shows that the Assessing Officer has miserably failed to bring out the facts. No where in the assessment order, the Assessing Officer has mentioned what is the transaction and only figures are available. The transaction which has been done has not been brought out. The Assessing Officer says that the assessee has received monies from Shri Naresh Jain. The assessee has categorically admitted that that he has no transaction with Shri Naresh Jain. A perusal of the reply filed by the assessee before the AO also shows that there is no reference to the specific transaction. A perusal of the order of the ld CIT(A) also shows that the ld CIT(A) has not brought out any details of the transaction. Ld CIT(A) has only mentioned that opportunity of cross objection has not been given and, therefore, he has deleted the addition. 7. Here, it may be mentioned that non providing an opportunity to the assessee is only procedural irregularity which can be corrected and the Jurisdictional High Court of Orissa in the case of Shivkumar Agarwal, 186 ITR 734 (Orissa) has categorically held that if there is procedural violation, it will not make the proceedings invalid and the issue would have to bne restored to the point where the procedural violation had taken place and proceedings are to be continued therefrom. In the present case, all the facts and figures are not coming out properly. Therefore, the issue should be restored to the file of the AO for readjudication after allowing adequate opportunity and the assessee should be given opportunity to produce the persons with whom he has done transaction with regard to claim of LTCG in respect of which, he has claimed

4 ITA No. 238/Ctc/2026 Assessment Year: 2019-20 C.O.No.10/CTK/2026 Assessment Year: 2019-20 deduction u/s.10(38) of the Act. The assessee shall also be given an opportunity to show as to whether he has done transaction and whether this is the only investment or there are other similar investments. With these directions, the issues are restored to the file of the AO for adjudication afresh. As we have restored the issue to the for the AO for readjudication setting aside the order of the ld CIT(A), the cross objection filed by the assessee no more survives. Consequently, cross objection of the assessee stands dismissed. 8. In the result, appeal of the revenue is treated as allowed for statistical purposes and cross objection of the assessee is dismissed. Order dictated and pronounced in the open court on 27/05/2026. Sd/- Sd/- (RAJESH KUMAR) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER Cuttack ; Dated 27/05/2026 RS Copy of the Order forwarded to : 1. The Appellant: ITO, Ward-1, Rourkela