In our prior publication, we extensively delved into the intricate art of lodging a valid objection against a hefty tax assessment levied by the Commissioner.
Now, picture this: you’ve lodged your objection, and the Commissioner has finally issued you with an objection decision- unfortunately, not in your favour.
How do you proceed? Another episode of panic attacks? Fear not, this article is your trusted guide through the process of filing a valid appeal before the Tax Appeals Tribunal, all in the noble pursuit of challenging the Commissioner’s decision.
Filing an Appeal before the TAT
Appeals before the TAT are governed by the Tax Appeals Tribunal Act, 2013 read together with the Tax Procedures Act and the Tax Appeals Tribunal (Procedure) Rules.
Procedure for appeal
If you’re itching to contest the Commisioner’s decision on any tax matter, arising under the provisions of any tax law, then you need to proceed with haste and file a notice of appeal within thirty (30) days from the date you received the Commisioner’s objection decision.
Remember, times is of the essence, and the Tax Appeals Tribunal has a reputation for being quite a stickler for deadlines.
What constitutes a valid appeal?
Once your notice of appeal has been successfully filed, it’s time to back it up with a substantive appeal within fourteen (14) days from the date of filing the notice of appeal.
The Appeal should consist of the following mandatory documents, think of it as a dossier of your grievances: –
- A memorandum of appeal – Basically citing the grounds of your appeal. It simply states “why-I-think-the Commissioner-is-wrong” statement.
- Statement of facts; This constitutes the specific facts of your case. It may relate to a particular transaction that is under dispute.
- Appealable decision: This refers to the objection decision that was issued by the Commissioner upon the taxpayer filing the notice of objection under Section 51 of the Tax Procedures Act.
Note: Always remember to attach the objection decision from the Commissioner when filing your appeal, as this is a crucial requirement. There have been instances where the Tax Appeal’s Tribunal has dismissed an appeal just because someone forgot to attach the objection decision.
For instance, in the case of Acorp Gifts Kenya Limited -vs- Commissioner of Domestic Taxes TAT No. 235 of 2022 the tribunal ruled as follows: –
“It is the finding of the Tribunal that the objection decision is a critical and mandatory document that must be lodged by the Appellant in its record of appeal and without it, the Appeal is rendered incompetent. The Tribunal notes that although the appellant has devoted enormous effort in demonstrating that the assessment is erroneous and/or excessive, it did not include the objection decision in its record of appeal.”
What a painful way to lose an appeal! –
- Supporting documents: Includes any other document that may assist the Tribunal to make a decision on the appeal. Think of it as a repertoire of your evidence.
Extension of Time to File an appeal out of time
If you miss the deadlines, you may request the Tribunal for an extension of time.
An extension may only be granted where the taxpayer demonstrates that they were prevented from lodging the appeal due to their absence from Kenya, sickness, or any other reasonable cause.
Hearing of the Appeal
Once the appeal has been validly lodged, and the same served upon the Commissioner, the Tribunal shall hear and determine the appeal within ninety (90) days from the date the appeal is filed.
However, this time may be extended by the Tribunal depending on the circumstances.
Settlement out of the Tribunal
Indeed, not all tax disputes are meant to be fought tooth and nail. Sometimes, a measured approach can yield more favorable outcomes. If you think you can find a win-win situation between the commissioner and yourself through some good old-fashioned negotiation, then by all means, apply to settle the appeal out of the tribunal.
Decision of the Tribunal
If the parties opt to settle the matter outside the Tribunal, they must formally submit the settlement terms to the tribunal, which will then adopt the agreement as an order of the Tribunal.
However, should the matter progress to a full hearing, the Tribunal will render a written decision that may entail one of the following:
- Affirming the decision under review;
- Varying the decision under review;
- Setting aside the decision under review;
- Refer the matter to the commissioner for reconsideration in accordance with any directions or recommendations of the Tribunal.
Appeal to the High Court
If the Tribunal unfortunately makes a decision against you, you still have an escape hatch: you can file an appeal before the High Court and challenge the Tribunal’s decision. Just make sure to do it within thirty (30) days of receiving the “bad news”.
