Judgment summary
The Tax Appeals Tribunal at Nairobi heard an appeal by the estate of the late Josiah Muli Wambua against the Commissioner of Legal Services & Board Coordination. The dispute concerned the implementation of an Objection Decision dated 28th August 2024 and the Respondent's refusal to amend the Appellant's self-assessment returns for certain years.
The Tribunal first examined the validity of the Appeal. It found that the Notice of Appeal referred to a decision dated 23rd January 2026 which was not placed on record, and that this decision was not addressed anywhere else in the pleadings. On this basis, the Tribunal held the Appeal to be incompetent and struck it out, without addressing the substantive issue of whether the Respondent was justified in declining to amend the Appellant's 2018 self-assessment.
Background
The Appellant is the estate of the late Josiah Muli Wambua, who owned properties earning residential and commercial rent, and farming income. The deceased died on 27th March 2012, but the grant of administration was issued on 28th March 2017, causing delay in preparing and auditing the estate's financial statements (para 12).
The Respondent, the principal officer appointed under Section 13 of the Kenya Revenue Authority Act, audited the Appellant and issued a Letter of Audit Findings dated 30th October 2023, raising additional assessments for income tax, VAT and withholding tax (WHT) of Kshs. 394,488,473.44 (para 3).
On 9th July 2024, the Appellant filed a Late Objection Application against the whole assessment (para 4). On 28th August 2024, the Respondent issued an Objection Decision partially allowing the objection and demanding Kshs. 11,010,485.25 (para 5). The Appellant settled the taxes, and the Respondent vacated additional income tax assessments for 2022, 2021 and 2019, while amending the 2018 assessment vide a Notice dated 30th August 2024 (para 6).
On 5th August 2025, the Appellant sought to amend its self-assessments. On 20th August 2025, the Respondent advised that amendments for 2018 and 2019 were time-barred, while amendments for 2021 and 2022 were allowable subject to reasons and supporting documents (paras 7-8). Aggrieved, the Appellant lodged the present Appeal via a Notice of Appeal dated 20th February 2026 (para 9).
Core dispute
The Appellant argued that the Respondent had failed to give full effect to the Objection Decision of 28th August 2024 contrary to Section 51(8) of the Tax Procedures Act, by amending the VAT payable on the iTax ledger without correspondingly amending the vatable income, thereby creating an inconsistent tax position (paras 10(a)-(b)).
The Appellant contended that the Respondent had already reviewed and determined the correct income through the objection process and could not now claim to lack mandate to amend the self-assessment figures accordingly, and that the Respondent's selective implementation, collecting VAT but declining corresponding income amendments, denied the Appellant refunds arising from overpaid tax (paras 10(c)-(e)).
The Appellant also argued that the additional income tax assessment was erroneous because bank credits included transfers between the Appellant's own bank accounts, farming income, commercial income, dividends, debtors' balances and capital injection, that the VAT assessment was based on wrong commercial rent income, and that the PAYE assessment wrongly used payments to casual workers below the taxable threshold as salaries (paras 14-15).
The Respondent maintained that it had fully implemented the Objection Decision on iTax, vacating additional assessments for 2019, 2021 and 2022 and amending the 2018 assessment, and that it could only make alterations based on additional assessments, not amend self-assessments downwards outside the proper process. It stated it had advised the Appellant on 5th August 2025 and 20th August 2025 on how to seek amendment of self-assessment returns, and that amendments for 2018 and 2019 were time-barred (paras 23-31). The Respondent submitted that the Appellant, having made self-assessment returns, was bound by them and could not resile from that position (para 32).
Court findings
The Tribunal identified two issues for determination: whether the Appeal was valid, and whether the Respondent's decision to decline amendment of the Appellant's 2018 self-assessment was justified (para 38).
On the first issue, the Tribunal noted that the Notice of Appeal dated 20th February 2026 specifically referred to a decision of the Respondent dated 23rd January 2026, but that this decision had not been placed on record before the Tribunal (para 39). The Tribunal observed that the pleadings otherwise concerned implementation of the Objection Decision dated 28th August 2024, which was on record, but that the Notice of Appeal did not refer to that Objection Decision (para 40).
The Tribunal applied Section 13(1) and (2) of the Tax Appeals Tribunal Act, which requires an appellant to submit, among other things, the appealable decision within fourteen days of filing the notice of appeal (para 41). It held that the Appellant had a duty to file the appealable decision referred to in its Notice of Appeal, and that its failure to do so deprived the Tribunal of the opportunity to interrogate that decision, rendering the Appeal incompetent (para 42).
The Tribunal cited Kariinya Mukiira vs Middle East Bank Limited (2018) eKLR, and the Supreme Court's remarks in that line of authority on the importance of procedural rules in litigation, to support its finding (para 43).
Having found the Appeal incompetent, the Tribunal considered the second issue, on the justification for declining to amend the 2018 self-assessment, to be moot (para 44).
Outcome
The Tribunal held that the Appeal was incompetent and struck it out. It made no order as to costs (para 45).
Major issues / areas of contention
- Whether the Appeal was valid, given that the decision referred to in the Notice of Appeal was not placed on record.
- Whether the Respondent's decision to decline amendment of the Appellant's self-assessment for 2018 was justified.