Judgment summary
This is a ruling on a Notice of Motion filed by Ngeru Holdings Limited (the Applicant) on 24th April 2026, seeking leave to file its appeal out of time against an Objection decision dated 16th June 2025, and conservatory orders staying implementation of that decision (paragraph 1).
The Application was supported by an affidavit of Eunice Njango Ngeru, the Applicant's managing director, sworn and filed on 24th April 2026, on the grounds that the managing director, a person living with disability, was adversely sick and hospitalised, which affected her ability to engage with the assessment process and caused the delay (paragraphs 2 to 2(d)).
The Respondent did not file a response to the Application, and neither party filed written submissions (paragraphs 3 and 4).
The Tribunal applied the criteria for extending time under Section 13 of the Tax Appeals Tribunal Act, considered reasonable cause for the delay and prejudice to the Respondent, and found the Application merited, granting leave to file the appeal out of time (paragraphs 5 to 20).
Background
The Commissioner issued an Objection decision dated 16th June 2025 rejecting the Applicant's objection to Company Income Tax and VAT Additional Assessments for the years 2019 to 2022, for an incremental amount of Kshs. 36,807,352.66 (exclusive of interest and penalties) and Kshs. 57,451,871.04 (inclusive of interest and penalties) (paragraph 2(b)).
The Applicant received the Objection decision on the same day it was issued, 16th June 2025, but did not file its Notice of Appeal and substantive Appeal within the statutory timelines (paragraph 6).
The Applicant's grounds for the delay were that its managing director, a person living with disability, was adversely sick and hospitalised, which slowed the company's day to day transactions, including its response to the Assessment (paragraphs 2(a), 2(c) and 2(d)). The Applicant attached a certificate of registration for persons with disability and a medical report dated 12th July 2025 detailing medical examinations and treatment (paragraph 14).
Core dispute
The core issue was whether the Tribunal should exercise its discretion under Section 13(3) and 13(4) of the Tax Appeals Tribunal Act to extend time for the Applicant to file its Notice of Appeal, Memorandum of Appeal, Statement of Facts and tax decision out of time, given the statutory 30-day timeline for filing a notice of appeal upon receipt of the Commissioner's decision (paragraphs 5 to 12).
The Tribunal had to determine whether there was reasonable cause for the delay, whether the appeal was merited, and whether the Respondent would suffer prejudice if the extension were granted (paragraph 9).
Court findings
The Tribunal held that the power to extend time is discretionary and unfettered but must be exercised judiciously, and is not a right of the Applicant, citing Charles Karanja Kiiru v Charles Githinji Muigwa [2017] eKLR (paragraphs 7 and 8).
On reasonable cause, the Tribunal referred to Balwant Singh v Jagdish Singh & Ors (Civil Appeal No.1166 of 2006) on the test of sufficiency of cause, and to Section 13(4) of the Tax Appeals Tribunal Act, which permits extension owing to absence from Kenya, sickness, or other reasonable cause (paragraphs 10 to 12).
The Tribunal found that, although the duration and level of indisposition of the managing director could not be determined, the evidence adduced, including the certificate of registration for persons with disability and the medical report dated 12th July 2025, persuaded the Tribunal that the managing director had indeed suffered critical ill health. The Tribunal therefore determined that the Appellant had demonstrated reasonable cause for the delay (paragraphs 14 to 16).
On prejudice, the Tribunal applied the test from Patrick Maina Mwangi v Waweru Peter [2015] eKLR, citing United Arab Emirates v Abdel Ghafar & Others 1995 IR LR 243, and found that the Appellant would suffer prejudice if not granted leave to appeal, whereas the Respondent would not suffer prejudice since it would still be able to collect taxes plus interest and penalties should the Appellant be found at fault (paragraphs 17 to 19).
Outcome
The Tribunal found the Application merited and allowed the Notice of Motion dated and filed on 24th April 2026 (paragraph 20(a)).
Leave was granted for the Appellant to file its Notice of Appeal, Memorandum of Appeal, Statement of Facts and tax decision out of time (paragraph 20(b)).
The Appellant was ordered to file and serve its Notice of Appeal, Memorandum of Appeal, Statement of Facts, Appealable decision and supporting documents within 14 days of delivery of the Ruling, and the Respondent was given liberty to file and serve its response to the Appeal within thirty (30) days of being served with the Appeal documents. No orders were made as to costs (paragraph 20(c), (d) and (e)).
Major issues / areas of contention
- Whether the Tribunal should extend time under Section 13(3) and 13(4) of the Tax Appeals Tribunal Act for the Appellant to file its Notice of Appeal, Memorandum of Appeal and Statement of Facts out of time.
- Whether the Appellant demonstrated reasonable cause for the delay, based on the managing director's illness and registered disability.
- Whether the Respondent would suffer prejudice if the extension of time were granted.