anc2 <- lm(TIME2 ~ TIME1 * GROUP)
includes the main effects of TIME1 and GROUP, and their interaction. This could have been written out as:
anc2 <- lm(TIME2 ~ TIME1 + GROUP + TIME1:GROUP)
where TIME1:GROUP means the interaction. There is an update function in R that can also be used, so this is also equivalent.
anc2 <- update(anc1, .~. + TIME1:GROUP)