Judgment summary
The Appellant, a medical practitioner, was issued additional income tax assessments for 2019 to 2022 amounting to Kshs 27,711,162 following an investigation by the Respondent. His objection, lodged on 5th May 2025, was confirmed by the Respondent's Objection Decision.
The Tribunal found that the Respondent's Statement of Facts, filed about eight months after the statutory deadline and without seeking leave under Section 15(4) of the TPA, was improperly on record and struck it out, leaving only the Respondent's submissions, which the Tribunal held could not substitute for pleadings or evidence.
Despite striking out the Respondent's pleadings, the Tribunal held that the Appellant still had to discharge his burden of proof. Finding that neither party had placed sufficient evidence before it to verify the Appellant's claims regarding employment income, pension contributions, PAYE, personal relief and interest expenses, the Tribunal allowed the appeal and referred the matter back to the Respondent for reconsideration under Section 29(3)(c)(ii) of the TPA.
Background
The Appellant is a Kenyan citizen who practises medicine within the Republic of Kenya [1]. The Respondent is the principal officer appointed under Section 13 of the Kenya Revenue Authority Act, mandated with collecting and enforcing tax laws [2].
The Respondent investigated the Appellant's affairs and issued additional income tax assessments for 2019 to 2022 amounting to Kshs 27,711,162 [3]. On 5th May 2025, the Appellant filed an objection, and the Respondent issued an Objection Decision confirming the additional assessments [4].
Core dispute
The Appellant argued that the assessment was wrongful due to significant errors of omission and commission in the preparation of his annual financial statements and books of account, including that his employment income was not factored into the filing, his pension contributions were not deducted in arriving at chargeable pay, PAYE was not deducted, personal relief was omitted, and interest expense on loans from financial institutions was not captured [5, 7].
The Appellant admitted that he lodged his objection without attaching relevant documents and stated he could not respond in time to the Respondent's demands because he was travelling for official duties for his employer, the University of Nairobi [8]. He claimed to have paid the full principal tax as at 31st December 2022 [7, 9].
The Respondent maintained that it had granted the Appellant an extension of time until 16th May 2025 to validate his objection with supporting documents, but he failed to do so, leading the Respondent to reject the objection as invalidly lodged under Section 51(3)(c) of the TPA [11, 12, 14]. The Respondent argued that the Appellant had not discharged his burden of proof under Section 56(1) of the Tax Procedures Act and that his claims remained unsubstantiated [15, 16].
Court findings
The Tribunal found that the Respondent had been granted leave to file its Statement of Facts within the statutory timeline on 9th October 2025, but filed it on 7th July 2026, about eight months later, without seeking leave to file late as required under Section 15(4) of the TPA [21, 23, 24].
The Tribunal held that a document filed in contravention of the law lacks legitimacy or legal force, and struck out the Respondent's Statement of Facts dated 24th October 2025 from the record [24, 25, 31]. The Tribunal noted that the Respondent was left only with its submissions, which it held cannot be used to introduce new facts, claims or issues not pleaded, citing Republic v Chairman Public Procurement Administrative Review Board & another ex parte Zapkass Consulting and Training Limited & another [2014] eKLR and Daniel Toroitich Arap Moi vs. Mwangi Stephen Muriithi & Another [2014] eKLR [26, 27, 28].
On the substantive issue, the Tribunal held that striking out the Respondent's pleadings did not automatically mean the appeal should succeed, as the Appellant still had to discharge his burden of proof [32]. The Tribunal found it difficult to determine the legitimacy of the Appellant's assertions regarding employment income, pension contributions, PAYE, personal relief and interest expenses, since the Respondent had nothing on record to rebut them, but the Appellant had also not provided evidence to support his assertions [34, 35, 36].
The Tribunal held that this was an appropriate case to invoke its powers under Section 29(3)(c)(ii) of the TPA to refer the matter back to the Commissioner for reconsideration [37].
Outcome
The Tribunal allowed the appeal and made the following orders: the Appellant is directed to serve the Respondent with all documents supporting the grounds raised in his objection within 14 days from the date of the judgment; the matter is referred back to the Respondent to issue a fresh Objection Decision taking into account the documents provided; the Respondent is to issue its objection decision within statutory timelines upon receipt of the documents or upon lapse of the period granted, whichever comes first; parties are at liberty to apply; and each party is to bear its own costs [38].
Major issues / areas of contention
- Whether the Respondent's Statement of Facts should be struck out for being filed outside the statutory timeline without leave under Section 15(4) of the TPA.
- Whether the Respondent's Objection Decision dated 2nd July 2025 was justified and lawful.
- Whether the Appellant discharged his burden of proof under Section 56(1) of the Tax Procedures Act to challenge the additional assessments.
- Whether the objection was validly lodged in light of Section 51(3)(c) of the TPA given the failure to submit supporting documents.
- Whether submissions filed by a party can be used to introduce facts or issues not raised in pleadings.