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

ITA 2527/CHNY/2024

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The case involves the Government Tele Communication Employees Co-operative Society Limited, which appealed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi. The appeal was initially disposed of, but the assessee filed a Miscellaneous Application to recall the order, which was granted. The Tribunal had to decide on the correct computation of interest on fixed deposits and savings bank interest, and whether the assessee was entitled to set-off interest expenditure against the interest received. The Tribunal noted that similar issues had been previously addressed in the assessee's own cases for earlier assessment years and had been restored to the AO for fresh adjudication.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 826748 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 3 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-01-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2017-2018
• Appeal Filed On: 27-09-2024
• Other Referred Cases: ITA Nos.2898 & 2899/Chny/2016, ITA Nos.2478/Chny/2017, 2703/Chny/2018, 558 & 559/Chny/2020
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GOUTHAMI MANIVASAGAM
• Assessee Lawyers: M. KARUNAKARAN
• Keywords: Set aside; Proportionate interest

Judgement Text

"आयकर अपीलȣय अͬधकरण, ‘बी’ Ûयायपीठ, चेÛनई IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH, CHENNAI Įी जॉज[ जॉज[ क े, उपाÚय¢ एवं Įी एस.आर.रघुनाथा, लेखा सदèय क े सम¢ BEFORE SHRI GEORGE GEORGE K, VICE PRESIDENT AND SHRI S.R. RAGHUNATHA, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.: 2527/CHNY/2024 िनधाᭅरण वषᭅ/Assessment Year: 2017-18 M/s. The Government Tele Communication Employees Co-operative Society Limited, 37-A, Sembudoss Street, Broadway, Chennai - 600 001. PAN: AABAT 3072B Vs. The Income Tax Officer, Non-Corporate Ward 11(1), Chennai. (अपीलाथᱮ/Appellant) (ᮧ᭜यथᱮ/Respondent) अपीलाथᱮ कᳱ ओर से/Appellant by : Shri M.Karunakaran, Advocate ᮧ᭜यथᱮ कᳱ ओर से/Respondent by : Ms. Gouthami Manivasagam, Addl.CIT सुनवाई कᳱ तारीख/Date of Hearing : 06.01.2026 घोषणा कᳱ तारीख/Date of Pronouncement : 06.01.2026 आदेश/ O R D E R PER GEORGE GEORGE K, VICE PRESIDENT: 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. Printed from counselvise.com ITA No.2527/Chny/2024 :- 2 -: 2. 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’. 5. During the course of argument, we have noted that the Ld.counsel for the assessee has referred the first set of grounds of appeal which consists of ground nos.1 to 7. The Ld.AR for the assessee only pressed for 2 grounds raised on which Tribunal has given its decision. 6. Further, by this Miscellaneous Petition, the Ld.Counsel referred the additional grounds which consists ground no.1 to 8 and filed vide letter dated 17.12.2024 (Official seal dated 16.12.2024) which is termed as ‘GROUNDS OF APPEAL’ and prayed for the disposal of the ground Nos.6 & 8 of the same. 7. Without going into the veracity of the claim made by the Ld.AR regarding Ground Nos 6 & 8 we recall our entire order dated Printed from counselvise.com ITA No.2527/Chny/2024 :- 3 -: 13.01.2025 on account of above narrated facts. We find that multiple grounds of appeal and additional grounds are filed without leave of the bench. Even order sheet does not record any such filings. Therefore, the registry is directed to take an appropriate step to curb the multiple filing of ‘Fresh grounds of appeal’ with Form 36. 8. In the result, we recall our entire order dated 13.01.2025 and direct the registry to scrutinize the ‘Fresh grounds of appeal’ or ‘Additional grounds of appeal’ filed by the assessee. The registry is directed to place the same before the Bench for adjudication. Issue notice to the parties for hearing of the appeal. The MA No.17/Chny/2025 of the assessee is allowed in terms above.” 3. 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. 6. The Assessing officer is not correct in computing the interest on fixed deposits and savings bank interest at Rs. 3,67,68,754 without allowing deduction towards Proportionate interest paid on borrowals. 8. The appellant submits that even if interest on fixed deposits and savings bank interest are not entitled to exemption u/s 80L the correct income under these sources should be computed after allowing interest paid against interest receipts as there is direct Printed from counselvise.com ITA No.2527/Chny/2024 :- 4 -: nexus between the interest payment and interest receipts as held by the ITAT in the appellant's own case in the earlier years. Dated this 6th day of January, 2026.” 4. 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 ITA Nos.2898 & 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. 5. The Ld.DR did not have a serious objection for remitting the matter to the files of the AO. 6. 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 Printed from counselvise.com ITA No.2527/Chny/2024 :- 5 -: 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. 12. The only issue for consideration is the expenditure incurred by the Assessee to earn the interest income. The case of the Assessee is that the Assessing Officer has treated the interest income earned by the Assessee has income from other sources and estimated the expenditure only. In the Assessment Order, the Assessing Officer has not properly considered the expenditure incurred by the Assessee to earn the interest income and simply estimated the interest expenditure. 13. In our view, it is not correct. Thus we set aside the order passed by the learned Commissioner of Income Tax (Appeals) on this count and remit back the matter back to the Assessing Officer to adjudicate the issue afresh in accordance with law de novo.” 7. 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 ITA Nos.2478/Chny/2017, 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. Printed from counselvise.com ITA No.2527/Chny/2024 :- 6 -: 8. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 6th January, 2026 at Chennai. Sd/- Sd/- (एस.आर. रघुनाथा) (S.R. RAGHUNATHA) लेखा सदèय/ACCOUNTANT MEMBER (जॉज[ जॉज[ क े) (GEORGE GEORGE K) उपाÚय¢ /VICE PRESIDENT चे᳖ई/Chennai, ᳰदनांक/Dated, the 6th January, 2026 RSR आदेश कȧ ĤǓतͧलͪप अĒेͪषत/Copy to: 1. अपीलाथȸ/Appellant 2. Ĥ×यथȸ/Respondent 3. आयकर आयुÈत /CIT, Chennai 4. ͪवभागीय ĤǓतǓनͬध/DR 5. गाड[ फाईल/GF. Printed from counselvise.com "