The High Court has recently issued its grounds of judgment for
TRSB v KPHDN (see our previous alert titled TRSB v KPHDN: Duty to
Give Reason for Imposition of Penalty under Income Tax Act 1967 here).
To recap, in this case, the taxpayer overpaid its taxes because
it had filed its tax returns based on its management accounts, as
its audited accounts were not finalised at the time of filing.
Despite having overpaid its taxes, the Director General of Inland
Revenue ("DGIR") penalised the taxpayer
under subsection 112(3) of the Income Tax Act 1967
("ITA"), for not filing its tax returns
based on its audited accounts. The Special Commissioners of Income
Tax ("SCIT") dismissed the
taxpayer's appeal. Subsequently, the High Court reversed the
SCIT's decision and set aside the penalties imposed on the
taxpayer.
