THE GOVT. TELE COMMUNICATION EMPLOYEES CO-OP. SOCIETY LTD.,CHENNAI vs. ITO, NCW-11(1), CHENNAI

This appeal filed by the assessee is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 31.07.2024 passed under section 250 of the Income Tax Act, 1961 (hereinafter called ‘the Act’). The relevant Assessment Year is 2017-18.

The above appeal was originally disposed off by the Tribunal vide its order dated 13.01.2025. The assessee thereafter filed a Miscellaneous Application (MA No.17/CHNY/2025) to recall the order of the Tribunal dated 13.01.2025. The Tribunal disposed off the Miscellaneous Application filed by the assessee vide its order dated 31.10.2025 by recalling the entire order of the Tribunal dated 13.01.2025 and posted the case for fresh hearing. The relevant observation of the Tribunal reads as follows:- “4. We have heard the rival submissions of the parties. We find that in the file there are three sets of grounds of appeal filed by the assessee. The first set comprising of ground nos.1 to 7 which is filed with Form No.36 dated 27.09.2024. The second set of grounds of appeal consists ground no.1 to 25 dated Nil. The assessee has also filed additional grounds which consists ground no.1 to 8 vide letter dated 13.12.2024 (Official seal dated 13.12.2024). The assessee has again filed additional grounds which consists ground no.1 to 8 vide letter dated 17.12.2024 (Official seal dated 16.12.2024). However, when we see the additional grounds, the same is termed as ‘GROUNDS OF APPEAL’.

Thereafter when the case was posted for hearing, the assessee’s Counsel Shri M. Karunakaran, Advocate had filed a letter stating that out of eight grounds raised, the assessee is pressing only two grounds and other grounds raised are not pressed. The relevant undertaking of the Ld.AR pressing ground Nos.6 and 8 reads as follows:- “The appellant has raised 8 grounds of appeal in the above appeal and the appellant is pressing only the following two grounds and the balance grounds of appeal raised in the above appeal are NOT PRESSED.

The Ld.AR for the assessee submitted that both the grounds relate to the issue that assessee is entitled to set-off interest expenditure against the interest received and only the net should be brought to tax. The Ld.AR submitted that assessee had incurred interest expenditure on the borrowings which were utilized for making advances to its members. Therefore, there is a direct nexus of interest payment and interest receipts. The Ld.AR submitted that the Tribunal in assessee’s own case in & 2899/Chny/2016 for the assessment years 2012-13 & 2013-14 had restored the identical issue to the files of the AO and hence, submitted similar order may be passed in the instant case.

The Ld.DR did not have a serious objection for remitting the matter to the files of the AO.

We have heard rival submissions and perused the materials on record. An identical issue raised in ground Nos.6 and 8 was already raised in assessee’s own case for assessment years 2012-13 & 2013-14 (supra), wherein the Tribunal had restored the matter to the files of the AO for fresh adjudication. The relevant finding of the Tribunal reads as follows:- “11. We have heard both the sides, perused the materials available on record and gone through the orders of the authorities below.

A similar view has also been taken by the Tribunal in assessee’s own case for assessment years 2014-15, 2015-16, 2011-12 & 2016-17 in 2703/Chny/2018 and 558 & 559/Chny/2020, order dated 10.02.2022. Therefore, following the co-ordinate bench orders of the Tribunal in assessee’s own case for assessment years 2011-12 to 2016-17 (supra), we restore the matter to the files of the AO. The AO is directed to adjudicate the issue raised in Ground Nos.6 and 8 (supra) afresh after affording reasonable opportunity of hearing to the assessee. It is ordered accordingly.