https://new.kenyalaw.org/akn/ke/judgment/ketat/2026/320

REPUBLIC OF KENYA IN THE TAX APPEALS TRIBUNAL AT NAIROBI TAT APPEAL NO E261 OF 2026 JOSIAH MULI WAMBUA................................................................ …....……APPELLANT -VS- COMMISSIONER OF LEGAL SERVICES & BOARD COORDINATION......RESPONDENT JUDGMENT BACKGROUND 1. The Appellant is the estate of the late Josiah Muli Wambua. 2. The Respondent is the principal officer appointed under Section 13 of the Kenya Revenue Authority Act. The Kenya Revenue Authority is an agency of the Government of Kenya mandated with the duty of collection and receipting of all tax revenue, and the administration and enforcement of all tax laws set out in parts 1 & 2 of the First Schedule to the Act, including assessing, collecting, and accounting for all tax revenues in accordance with those laws. 3. The Respondent undertook audit of the Appellant and, vide its Letter of Audit Findings dated 30th October 2023, issued the Appellant with additional assessments for income tax, VAT and withholding tax (WHT) of Kshs. 394,488,473.44 Judgment TAT No. E261 of 2026 – Josiah Muli Wambua -vs- Commissioner of Legal Services & Board Coordination Page 1 of 12 4. On 9th July 2024, the Appellant filed a Late Objection Application objecting to the whole assessment. 5. On 28th August 2024, the Respondent issued its Objection Decision partially allowing the Appellant’s objection application, and demanded Kshs. 11,010,485.25. 6. The Appellant subsequently settled the taxes, and the Respondent vacated additional income tax assessments for the periods 2022, 2021 and 2019. For 2018, the Respondent amended the additional assessment vide its Notice dated 30th August 2024. 7. On 5th August 2025, the Appellant wrote to the Respondent seeking to amend its self-assessments. 8. On 20th August 2025, the Respondent wrote to the Appellant indicating that amendments for 2018 and 2019 were time-barred, whilst amendments of returns for 2021 and 2022 were allowable subject provision of reasons and supporting documents. 9. Aggrieved, the Appellant lodged this Appeal vide its Notice of Appeal dated 20th February, 2026. THE APPEAL 10. In its Memorandum of Appeal dated 6th March 2026, the Appellant raised the following grounds of appeal: - a. The Respondent erred in law and fact by failing to take necessary steps to give full effect to the Objection Decision Judgment TAT No. E261 of 2026 – Josiah Muli Wambua -vs- Commissioner of Legal Services & Board Coordination Page 2 of 12 dated 28th August 2024 contrary to Section 51(8) of the Tax Procedures Act. b. The Respondent erred in law and fact by amending the taxpayer’s iTax ledger to reflect the correct VAT payable, while failing to amend the corresponding vatable income that formed the basis of that VAT assessment, thereby creating an internally inconsistent and unlawful tax position. c. The Respondent erred in law and fact by asserting that the Commissioner lacks the mandate to amend self-assessment figures after determining the correct income through the objection process, despite having expressly reviewed, established, documented, and relied upon such corrected income in issuing its Objection Decision and computing VAT thereon. d. The Respondent erred in law and fact by advising the Appellant to apply for amendments through iTax Account Manager or Tax Service Office in respect of figures that had already been reviewed, determined, and finalized by the Commissioner through a formal Objection Decision. e. The Respondent erred in law and fact by failing to act independently and fairly, and instead selectively implementing portions of the decision favorable to the Respondent (VAT collections), while declining to effect the corresponding income amendments, thereby denying the Appellant the consequential tax refunds arising from overpaid tax. APPELLANT’S CASE Judgment TAT No. E261 of 2026 – Josiah Muli Wambua -vs- Commissioner of Legal Services & Board Coordination Page 3 of 12 11. The Appellant’s case is based on its Statement of Facts dated 20th February 2026, and written submissions dated 24th June 2026. 12. The Appellant averred that it 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 administration of grant was issued on 28th March 2017, hence occasioning delay in the preparation and audit of the estate’s financial statements. 13. The Appellant posited that the Respondent assessed it for additional income tax, VAT and WHT of Kshs. 394,488,373.44 to which it objected. 14. It is the Appellant’s case that the additional income tax assessment was erroneous because bank credits included deposits from various sources such as transfer of funds from one bank to another, farming income, commercial income and dividends, debtors’ balances and capital injection. 15. The Appellant further stated that the additional VAT assessment computation was erroneous as it was based on wrong commercial rent income, whilst for PAYE, the amount used in the assessment as salaries represented payments made to casual workers and the payments are below taxable threshold. 16. It is the Appellant’s case that for years 2019, 2020, 2021 and 2022 which were resulting in a tax refund for the Appellant, the Respondent deliberately failed to effect the Objection Decision in full. Judgment TAT No. E261 of 2026 – Josiah Muli Wambua -vs- Commissioner of Legal Services & Board Coordination Page 4 of 12 17. The Appellant asserted that there should not be any inconsistency between vatable income and the computed VAT. Having established the vatable income and proceeded to compute the VAT and posted the same on the Appellant’s iTax ledgers, the Respondent should well post vatable income on iTax ledgers in compliance with the law. 18. The Appellant stated that there is no provision in the Tax Procedures Act, and in particular Section 15 (i-ii) which limits the Commissioner’s mandate and right to fully effect the Objection Decision even if the resultant assessed income is less than the one in the self-assessment return. By stating that it lacks mandate to effect its Objection Decision, the Respondent is abdicating its responsibility clearly enshrined in the Section 15(9) of the TPA. 19. The Appellant contended that the Respondent’s partial, discriminative and selective implementation of the Objection Decision disregards the Appellant’s legitimate expectation that effecting the Objection Decision be done in line with the prevailing legal and constitutional principles including proportionality and public interest. 20. In its written submissions dated 24th June 2026, the Appellant largely reiterated the above contentions, and cited various case law in support of its appeal. APPELLANT’S PRAYERS 21. The Appellant prayed to the Tribunal for the following orders: - a) The Appeal be allowed with costs to the Appellant. Judgment TAT No. E261 of 2026 – Josiah Muli Wambua -vs- Commissioner of Legal Services & Board Coordination Page 5 of 12 b) The Respondent’s decision returning the assessment to the original assessment self-assessment instead of the Respondent’s assessment be set aside. c) The Respondent be directed to effect the assessed income for the year 2018 to 2022 in the iTax ledger of the Appellant on 28th August 2024 being the date of the Objection Decision. d) Any other orders that the Honourable Tribunal may deem just and reasonable. RESPONDENT’S CASE 22. The Respondent filed its Statement of Facts dated 9th April 2026, and Written Submissions dated 2nd June, 2026 in opposition to the Appeal. 23. The Respondent averred that it issued an Objection Decision confirming payment of taxes for Kshs. 11,010,485.29 for VAT, income tax and WHT, and the Appellant made payments for the amounts confirmed in the Objection Decision. Subsequently, the Respondent vacated the entire additional assessments. 24. The Respondent pleaded that in 2018, it issued amended assessments which were partially allowed from Kshs. 4,560,590 to Kshs. 4,317,033. The Appellant subsequently paid the sum of Kshs. 243,599.00 fully settling the dispute. Judgment TAT No. E261 of 2026 – Josiah Muli Wambua -vs- Commissioner of Legal Services & Board Coordination Page 6 of 12 25. It is the Respondent’s case that its Objection Decision was fully implemented on iTax and therefore there is no dispute with regard to the Objection Decision issued on 28th August 2024. 26. The Respondent stated that the Appellant’s contention is that the Respondent was required to amend its self-assessments downwards based on its audited financial statements and effect the amendment on iTax. However, the Respondent advised the Appellant that it could only make alterations based on additional assessments, not amend its self-assessment downwards. 27. The Respondent averred that it amended the Appellant’s self- assessments by raising additional assessments and upon vacating the additional assessment, the Appellant was reinstated to its self- assessment return. 28. It is the Respondent’s case that it advised the Appellant on 5 th August 2025 on how to go about seeking an amendment to its self- assessment return. 29. The Respondent pleaded that the Appellant’s request was neither supported nor specific to any item in the returns. The Respondent vide a letter dated 20th August 2025 wrote to the Appellant and requested for a detailed explanation of the reasons for the amendment, and supporting documentation. 30. The Respondent further pleaded that the Appellant came to the Respondent’s offices and requested for a meeting on 29 th December, 2025. The Appellant claimed that its sales turnover in the self- assessment returns was not correctly amended to reflect the adjusted Judgment TAT No. E261 of 2026 – Josiah Muli Wambua -vs- Commissioner of Legal Services & Board Coordination Page 7 of 12 turnover. The Appellant’s contention was that the amendments being requested relate to adjustment of the income tax (rental turnover), which according to the Appellant, should be adjusted downwards by the same VAT amounts that were raised in the additional assessments. According to them, this resulted in double taxation of the Appellant’s income. 31. The Respondent stated that it informed the Appellant that for the periods 2018 and 2019, amendments were time-barred and could not be considered. 32. The Respondent submitted that the Appellant having made self- assessment returns is bound by the same and cannot seek to run away from its tax obligation. 33. The Respondent further submitted that the Appellant, despite being guided by the Respondent on how to make amendments to its self-assessment returns in the letter dated 20th August 2025, opted in the meeting of 29th December 2025 not to provide any records. 34. In response to grounds (a) and (b) of the Appellant’s Memorandum of Appeal, the Respondent averred that they gave effect to the Objection Decision by vacating additional assessments for the periods 2019, 2021 and 2022, and amending the assessment for the period 2018. 35. In response to ground (c) of the Appellant’s Memorandum of Appeal, the Respondent averred that they did not contravene Section 51(8) and 51(9) of the Tax Procedures Act. It is the Respondent’s assertion that they in fact considered the Appellant’s objection and Judgment TAT No. E261 of 2026 – Josiah Muli Wambua -vs- Commissioner of Legal Services & Board Coordination Page 8 of 12 issued an Objection Decision within the statutory period and the same was effected as stated. 36. In its Written Submissions dated 2nd June, 2026, the Respondent largely reiterated the above assertions and cited various case law to support its case. RESPONDENT’S PRAYERS 37. The Respondent prayed to the Tribunal for the following orders: - a) The Appeal be dismissed for lack of merit. b) The Respondent’s Objection Decision dated 28th August, 2024 be upheld. c) Costs. ISSUES FOR DETERMINATION 38. The Tribunal having considered the parties' pleadings, submissions and documents filed before it is of the view that the following issues that fall for its determination: - a) Whether the Appeal is valid. b) Whether the Respondent’s decision to decline amendment of Appellant’s self-assessment for 2018 is justified. ANALYSIS AND DETERMINATION a) Whether the Appeal is valid. Judgment TAT No. E261 of 2026 – Josiah Muli Wambua -vs- Commissioner of Legal Services & Board Coordination Page 9 of 12 39. As a preliminary matter, the Tribunal will examine the validity of the instant Appeal. The instant Appeal was precipitated by the Appellant’s Notice of Appeal dated 20th February 2026 and specifically refers to the Respondent’s decision dated 23rd January 2026. However, the said decision has not been placed on record before the Tribunal. 40. The Tribunal, nevertheless, takes judicial notice of the fact that the entirety of pleadings before it disputes implementation of the Respondent’s Objection Decision dated 28th August 2024, which is on record. The Notice of Appeal before the Tribunal in this Appeal, however, does not refer to Objection Decision. 41. The procedure for lodging Appeal before the Tribunal is provided for under Section 13 (1) and (2) of the Tax Appeals Tribunal Act as follows: - 13 (1)A notice of appeal to the Tribunal shall— (a) be in writing or through electronic means; (b) be submitted to the Tribunal within thirty days upon receipt of the decision of the Commissioner. (2) The appellant shall, within fourteen days from the date of filing the notice of appeal, submit enough copies, as may be advised by the Tribunal, of— (a) a memorandum of appeal; (b) statements of facts; and (c) the appealable decision; and (d) such other documents as may be necessary to enable the Tribunal to make a decision on the appeal. (emphasis added) Judgment TAT No. E261 of 2026 – Josiah Muli Wambua -vs- Commissioner of Legal Services & Board Coordination Page 10 of 12 42. From the mandatory provisions of Section 13 (1) and (2) of the Tax Appeals Tribunal Act above, the Appellant has a duty to file its Appealable Decision as per the Notice of Appeal. In the instant Appeal, the Appealable Decision referred to in the Notice of Appeal is not on record, and therefore the Tribunal has been deprived of the opportunity to interrogate it. It goes without saying that the instant Appeal, is therefore, incompetent. 43. In this regard, the Tribunal is guided by the holding in the case of Kariinya Mukiira vs Middle East Bank Limited (2018) eKLR where it was stated: - “That procedure in my view, is not there for no reason, it is there for parties to abide. The importance of following laid down procedure was considered in the case of Moses Mwicigi where the Supreme Court stated: “This court has on a number of occasions remarked upon the importance of rules of procedure in the conduct of litigation. In many cases, procedure is so closely intertwined with the substance of the case, that it benefits not the attribute of a mere technicality. The conventional wisdom indeed, is that procedure is the hand maiden of justice. Where a procedural motion bears the ingredients of just determination and yet it is overlooked by a litigant, the court would not hesitate to declare the attendant pleadings incompetent” b) Whether the Respondent’s decision to decline amendment of Appellant’s self-assessment for 2018 is justified. Judgment TAT No. E261 of 2026 – Josiah Muli Wambua -vs- Commissioner of Legal Services & Board Coordination Page 11 of 12 44. Having determined the Appel to be incompetent, the Tribunal considers the second issue for determination to be moot at this stage. DISPOSITION 45. The upshot of the foregoing analysis is that the Tribunal find and holds that the Appeal is incompetent and proceeds to issue the following orders: - a. The Appeal be and is hereby struck out. b. No orders as to costs. 2. It is so ordered. DATED and DELIVERED at NAIROBI this 21st Day of AUGUST 2026 ................................................................ DR. ERICK KOMOLO CHAIRMAN ……………………………. ……..............…………….. ABDULLAHI M. DIRIYE CYNTHIA MAKAYA MEMBER MEMBER Judgment TAT No. E261 of 2026 – Josiah Muli Wambua -vs- Commissioner of Legal Services & Board Coordination Page 12 of 12