Judgment summary
The Appellant, an individual registered taxpayer, was issued additional income tax assessment orders on 21st July 2025 for the years 2019 to 2023. He objected on 14th August 2025, but the Respondent rejected the objection in a decision dated 12th October 2025, confirming additional assessments of Kshs. 7,294,106 together with penalties and interest (paras 3 to 5, 21).
The Appellant appealed, arguing errors in the assessment, failure to consider his business nature and allowable deductions, and lack of a fair hearing (para 7). The Respondent maintained that the Appellant had rental income subject to monthly rental income tax and had failed to respond to a Section 59 notice or provide documents supporting his objection (paras 13 to 15).
The Tribunal found no evidence that the Appellant had provided the documents sought by the Respondent and held that the Objection Decision was justified. The appeal was dismissed, the Objection Decision upheld, and each party was ordered to bear its own costs (paras 23, 28, 29).
Background
The Appellant is an individual registered taxpayer. The Respondent is the principal officer appointed under Section 13 of the Kenya Revenue Authority Act, mandated with collecting and administering tax laws (paras 1 to 2).
On 21st July 2025, the Respondent issued additional assessment orders in respect of income tax for the years 2019 to 2023. The Appellant objected on 14th August 2025. The Respondent issued its Objection Decision on 12th October 2025, rejecting the objection. The Appellant then lodged this appeal by Notice of Appeal dated 13th November 2025 (paras 3 to 6).
Core dispute
The Appellant contended that the Respondent erred in assessing the tax payable, failed to consider the nature of his business and his allowable deductions, and failed to accord him a fair hearing despite lodging an objection (para 7). He sought to have the assessments and Objection Decision set aside and the tax payable reassessed in line with the evidence (para 11).
The Respondent contended that the Appellant earned rental income subject to monthly rental income tax, that it issued a Section 59 Tax Procedures Act notice requesting verification of that income, and that the Appellant failed to provide documents or explanations in response, as well as failing to provide grounds of objection and supporting documents despite physical meetings (paras 13 to 15). The Respondent argued that the burden lay on the Appellant to demonstrate discharge of his tax liability and that the assessment and Objection Decision were properly founded (paras 16 to 17).
The issue for determination was whether the Respondent's Objection Decision dated 12th October 2025 was justified (para 20).
Court findings
The Tribunal noted that the Objection Decision specifically found that the Appellant had not provided the requisite documents supporting his objection, including at physical meetings (para 22). Having reviewed the pleadings, and noting that the Appellant did not file submissions, the Tribunal found no evidence that the Appellant had provided the documents sought by the Respondent (para 23).
The Tribunal referred to Section 59 of the Tax Procedures Act (cap 469B), concerning the Commissioner's power to require production of documents, information or evidence relevant to a person's tax liability (para 24). It also referred to Section 56(1) of the Tax Procedures Act (cap 469B) and Section 30 of the Tax Appeals Tribunal Act (cap 469A), both placing the burden of proof on the taxpayer to show that a tax decision or assessment is incorrect or excessive (paras 25 to 26).
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 once a taxpayer presents evidence that an assessment was wrong (para 27). The Tribunal held that the Appellant had not discharged this burden and found the Respondent's Objection Decision dated 12th October 2025 to be justified (para 28).
Outcome
The Tribunal held that the Appeal lacked merit. It dismissed the Appeal, upheld the Respondent's decision dated 12th October 2025, and ordered that each party bear its own costs (para 29).
Major issues / areas of contention
- Whether the Respondent's Objection Decision dated 12th October 2025, confirming additional income tax assessments of Kshs. 7,294,106 together with penalties and interest, was justified.
- Whether the Appellant had discharged his burden under Section 56(1) of the Tax Procedures Act and Section 30 of the Tax Appeals Tribunal Act to show that the assessment was incorrect or excessive.
- Whether the Appellant complied with the Respondent's Section 59 Tax Procedures Act notice requesting verification of rental income and supporting documents.