Judgment summary
The Tax Appeals Tribunal at Nairobi considered an appeal by Latasha Printers Limited against Kenya Revenue Authority arising from additional corporation income tax assessments for the years 2015 and 2016.
The Tribunal identified three issues for determination: whether the appeal was competent, whether the Appellant discharged its statutory burden of proof, and whether the assessment orders were justified.
Having found the appeal incompetent on procedural grounds, the Tribunal held that the residual issues were rendered moot and struck out the appeal, with each party bearing its own costs.
Background
The Appellant is a private limited company with operations in Kenya. The Respondent is a principal officer appointed under Section 13 of the Kenya Revenue Authority Act, CAP 469, mandated under Sections 5(1) and 5(2) of that Act to collect and account for tax revenue (paragraphs 1 to 2).
On 17th and 18th September 2019, the Respondent issued Assessment Orders requiring the Appellant to pay additional corporation income taxes amounting to Ksh 14,042,694.58 in relation to the years 2015 and 2016 (paragraph 3).
The Appellant objected via iTax on 23rd June 2020 (paragraph 4). Dissatisfied with the Respondent's decision, the Appellant lodged its Notice of Appeal dated 1st October 2025, filed on 7th October 2025 (paragraph 5).
Core dispute
The Appellant's Memorandum of Appeal raised a single ground, namely that the Respondent erred in law and fact by not allowing the taxpayer to deduct allowable expenses for the years 2015 and 2016 (paragraph 6). The Appellant asserted that the Respondent never communicated on the validity of its objection as required by Section 50(3)(4) of the TPA until 23rd June 2020, and lodged its Notice of intention to Appeal via iTax on 15th April 2024 pursuant to Section 52 of the TPA (paragraphs 9 to 10). The Appellant prayed that the Tribunal set aside the Respondent's tax decision and annul it (paragraph 11).
The Respondent contended that the Appellant lodged a late objection on 23rd June 2020 without supporting documents or reasons, leading to rejection of the late objection (paragraphs 13 to 15). The Respondent argued the Appeal was fatally defective for contravening Section 13 of the TAT Act, for failing to object within 30 days under Section 51(2) of the TPA, for failing to attach a copy of the objection decision contrary to Section 51(12) of the TPA and Section 13(2) and (3) of the TAT Act, and for failing to seek leave of the Tribunal to file the Appeal under Section 13(3) and (4) of the TAT Act (paragraphs 16 and 19 to 22). The Respondent further argued that, on the substance, the Appellant had not discharged its burden under Section 56(1) of the TPA to show the expenses were wholly and exclusively incurred in the production of income under Section 15(1) of the Income Tax Act (paragraphs 25 to 29). The Respondent prayed for dismissal of the Appeal, upholding of the assessments, and costs (paragraph 32).
Court findings
The Tribunal framed three issues: whether the Appeal was competent, whether the Appellant discharged its statutory burden of proof, and whether the assessment orders were justified (paragraph 33).
On competency, the Tribunal noted that the Appellant's Notice of Appeal was lodged on 7th October 2025, outside the timeframe under Section 51(12) of the TPA and without leave of the Tribunal as required under Section 13(3) and (4) of the TAT Act (paragraph 36).
The Tribunal found that the appealable decision was not adduced before it by the Appellant, contrary to Section 13(2)(c) of the TAT Act (paragraph 39). The Tribunal also noted that the Appellant's Notice of appeal was lodged against an alleged decision dated 24th November 2022, which was not adduced, and that the Appellant appealed close to three years after that decision was issued, contrary to Section 51(12) of the TPA (paragraph 43).
Having found these procedural defects, the Tribunal held that the Appeal was incompetent and ripe for striking out, and that the residual issues, including the burden of proof and the justification for the assessments, were rendered moot (paragraphs 45 to 46).
Outcome
The Tribunal held that the Appeal was incompetent and struck it out. Each party was ordered to bear its own costs (paragraphs 47 to 48).
Major issues / areas of contention
- Whether the Appeal before the Tribunal was competent.
- Whether the Appellant lodged its Notice of Appeal within the statutory timeframe under Section 51(12) of the TPA.
- Whether the Appellant obtained leave of the Tribunal to file the Appeal as required under Section 13(3) and (4) of the TAT Act.
- Whether the Appellant adduced the appealable decision before the Tribunal as required under Section 13(2)(c) of the TAT Act.
- Whether the Appellant discharged its statutory burden of proof under Section 56(1) of the TPA regarding deductibility of expenses.
- Whether the assessment orders for 2015 and 2016 were justified.