Afzal Industry Supply Limited VS KRA

#AfzalIndustrySupplyLimitedVSKRA

AISL was assessed for year 2016 &2017 income tax on 27/11/2018.The assessment was worth KES 79m

AISL objected the assessment but KRA rejected the objection on the basis that the objection did not state the grounds for objection.

This was followed by an agency notice to its bankers on 20/03/2019.

AISL appealed to TAT

AISL argued that:

·        It was not notified of the assessment

·        KRA did not consider the expenses of the business while raising the assessment. KRA had applied 30% on the entire income.

KRA Submitted that

·        There was no valid objection from the AISL. The objection did not state the grounds for objection nor did it state the requested amendments

·        AISL did not provide documentation to support the objection.

·        KRA was empowered by the law to raise a default assessment where a taxpayer has failed to do so.

In its analysis, the TAT observed that:

·        TPA section 29 empowers KRA to raise a default assessment where a taxpayer has failed to do so.

·        As regards KRA failure to deduct expenses, AISL did not provide documentation to support  its tax computation

As Such AISL lost the case

The ruling was issued on 23/07/2021