Judgment summary
The Appellant, an individual taxpayer, was subjected to compliance verification for the period 2020 to 2023, resulting in additional income tax assessments of Kshs. 1,795,443.00. The Appellant objected, and after the Respondent sought further supporting documents, the Respondent issued an Objection Decision on 12th November 2025 confirming the assessments.
The Appellant appealed, arguing that the Respondent erred in disallowing claimed purchases for 2020 to 2023 and in increasing sales for the 2022 year of income. The Appellant did not file a Statement of Facts or Written Submissions in the appeal.
The Tribunal found that the Appellant had not provided the documents the Respondent had requested, namely supplier invoices, bank statements, general ledgers, and audited financial statements for the relevant years. The Tribunal held that the Appellant did not discharge the burden of proof required under Section 56(1) of the Tax Procedures Act and Section 30 of the Tax Appeals Tribunal Act, and dismissed the Appeal, upholding the Respondent's Objection Decision.
Background
The Appellant is an individual taxpayer. The Respondent is the principal officer appointed under Section 13 of the Kenya Revenue Authority Act, mandated with collection and administration of tax laws (paras 1-2).
The Respondent subjected the Appellant to compliance verification for various tax heads for the period 2020 to 2023, and raised additional income assessments of Kshs. 1,795,443.00 (para 3).
On 23rd September 2025, the Appellant objected to the additional assessments. On 27th October 2025 and 7th November 2025, further documents were sought to support the objection (para 4).
On 12th November 2025, the Respondent issued its Objection Decision confirming the additional income tax assessments of Kshs. 1,795,443.00 (para 5). The Appellant, aggrieved, filed the Appeal vide Notice of Appeal dated 13th December 2025 (para 6).
Core dispute
In its Memorandum of Appeal dated 22nd October 2025, the Appellant argued that the Respondent erred in the basics of the additional assessments by disallowing claimed purchases in the years 2020, 2021, 2022 and 2023, and by increasing sales in the year of income 2022. The Appellant contended its original returns were filed in good faith, and that the Respondent's grounds to disallow cost of sales and increase sales were unclear, unfair and unjust (para 7).
The Respondent averred that the additional assessments were lawful because it disallowed expenses for the period January 2020 to 2023 since the Appellant failed to provide documentation to justify expenses incurred wholly and exclusively in generating revenues under Section 15 of the Income Tax Act (para 11). The Respondent stated the Appellant failed to provide supplier invoices, bank statements, general ledgers, and audited financial statements for the years 2020 to 2023 (para 12).
The Respondent relied on Section 31 of the Tax Procedures Act (TPA), which allows use of best judgment based on available information, and contended it was for the Appellant to prove the Respondent erred in exercising that best judgment (paras 13-14).
The issue for determination was whether the Respondent's Objection Decision dated 12th November 2025 was justified (para 17).
Court findings
The Tribunal noted that the Appellant neither filed its Statement of Facts nor Written Submissions, so the Respondent's contentions remained substantially unrebutted (para 19).
The Tribunal found it was not in dispute that the Respondent had sought supplier invoices, bank statements, general ledgers for 2020 to 2023, and audited financial statements for 2020 to 2023 from the Appellant to support the objection (para 20). The Respondent's contention that the Appellant did not provide these documents remained unrebutted, and there was no evidence that the Appellant availed any documents to validate its objection (para 21).
The Tribunal referred to Section 59 of the Tax Procedures Act (cap 469B) on the duty to produce documents and records, Section 56(1) of the Tax Procedures Act on the taxpayer's burden of proof, and Section 30 of the Tax Appeals Tribunal Act (cap 469A) on the appellant's burden of proof in Tribunal proceedings (paras 22-24).
The Tribunal cited its earlier decision in Abyssinia Iron and Steel Ltd -vs- Commissioner of Customs and Border Control (TAT No. 435 of 2022), on the shifting burden of proof between taxpayer and Respondent (para 25).
The Tribunal held that the Appellant did not sufficiently support its objection against the additional income tax assessments, and that the Respondent's decision dated 12th November 2025 was therefore justified (para 26).
Outcome
The Tribunal found that the Appeal lacked merit and dismissed it. The Respondent's Decision dated 12th November 2025 was upheld. Each party was ordered to bear its own costs (para 27).
Major issues / areas of contention
- Whether the Respondent's Objection Decision dated 12th November 2025, confirming additional income tax assessments of Kshs. 1,795,443.00, was justified.