[2025] KETAT 65 (KLR)

Munyi v Commissioner of Domestic Taxes (Tax Appeal E1279 of 2024) [2025] KETAT 65 (KLR) (24 January 2025) (Ruling)

Neutral citation: [2025] KETAT 65 (KLR)

Republic of Kenya

In the Tax Appeal Tribunal

Tax Appeal E1279 of 2024

RO Oluoch, Chair, G Ogaga & Cynthia B. Mayaka, Members

January 24, 2025

Between

Phinears Njagi Munyi

Applicant

and

Commissioner of Domestic Taxes

Respondent

Ruling

1. The Appellant vide a Notice of Motion application dated 5th day of November, 2024 and filed on the 8th day of November, 2024 sought for the following Orders:-a.That the Applicant be granted leave to file the Memorandum of Appeal out of time to enable it challenge the Objection decision dated 4th May 2022. b.That the Honorable Tribunal be at liberty to make any such orders as it deems necessary in the circumstances.

2. The application which was supported by an Affidavit sworn by the Appellant himself on the 4th day of November, 2024 is premised on the following grounds:-a.That the delay in filing the Appeal within the statutory timeline was occasioned by the misunderstanding on the persons to file the appeal, that is whether the partnership or the individual, following the issuance of the objection decision.b.That the Respondent was supposed to raise an assessment in the partnership account as per the ADR progress Meeting in the partnership’s previous case (660 of 2021). The Respondent has not yet raised the assessment.c.That whereas the delay is admitted, the Appellant had expressed his intention to appeal the matter but could not file without guidance from the Commissioner since there was no assessment in the partnership iTax portal. Whereby the Respondent had stated that they would raise the assessment so the Appellant being a partnership can object on the partnership. Upon receiving directions by the KRA Debt Managers, action was taken without undue delay.d.That the intended appeal raises arguable issues to the extent that the Respondent’s objection decision is not correct.e.That the Respondent does not stand to suffer any loss or harm should the Tribunal grant orders

Analysis and Findings 3. The Tribunal notes that the Respondent did not, despite having been availed sufficient opportunity, file any response to the Appellant’s application.

4. The Tribunal on the 17th day of October, 2024 directed the parties to file and serve their written submissions by the 21st of November, 2024. The Respondent did not comply with the directions.

5. Inspite of the application being unopposed on the part of the Respondent the Tribunal retains the residual authority to determine if the application satisfies the legal threshold for the grant of the orders sought on the part of the Appellant.

6. In determining whether to extend time, the Tribunal was guided by the decision in the case of Leo Sila Mutiso -vs- Rose Hellen Wangari Mwangi - Civil Application No. Nai. 255 of 1997 (unreported), where the Court expressed itself as thus:-“It is now well settled that the decision whether or not to extend the time for appealing is essentially discretionary. It is also well settled that in general the matters which this court takes into account in deciding whether to grant an extension of time are: first, the length of the delay; secondly, the reason for the delay; thirdly (possibly), the chances of the appeal succeeding if the application is granted; and, fourthly, the degree of prejudice to the respondent if the application is granted.”

7. On the criteria of the issues to be considered when granting an extension to file an appeal out of time, the Tribunal referred to the case of Odek, JJ. A in Edith Gichugu Koine vs. Stephen Njagi Thoithi [2014] eKLR, where the Court laid out the factors as thus:-“Nevertheless, it ought to be guided by consideration of factors stated in many previous decisions of this Court including, but not limited to, the period of delay, the reasons for the delay, the degree of prejudice to the respondent if the application is granted, and whether the matter raises issues of public importance, amongst others...” (Emphasis added)

8. The Tribunal was further guided by the principles set out in John Kuria v Kelen Wahito, Nairobi Civil Application Nai 19 of 1983 April 10, [1984] where the court used the following criteria to consider the application:-a.Whether there is a reasonable cause for the delay?b.Whether the appeal is merited?c.Whether the application for extension has been brought without undue delay?d.Whether there will be prejudice suffered by the Respondent if the extension is granted?

a. Whether there is a reasonable cause for the delay 9. The Tribunal is enjoined to determine the length and reason for the delay when considering an application for the extension of time to appeal out of time. The power to extend time is discretionary and unfettered but the same must be exercised judiciously and it is not a right to be granted to an Applicant.

10. The Appellant contended that the delay in filing an appeal was occasioned by the misunderstanding on the persons to file the appeal, that is whether the partnership or the individual, following the issuance of the objection decision.

11. The Appellant further contended that the Respondent was supposed to raise an assessment in the partnership account as per an ADR progress meeting in the partnership’s previous case (TAT No. 660 of 2021). That the Respondent has not yet raised the assessment as against the partnership.

12. The Appellant also argued that whereas the delay is admitted, the Appellant had expressed its intention to appeal the matter but could not file without guidance from the Commissioner since there was no assessment in the partnership iTax portal. That thereby the Respondent had stated that it would raise the assessment so the Appellant being a partnership can object on the partnership and upon receiving directions by the KRA Debt Managers, action was taken without undue delay.

13. In considering what constitutes a reasonable reason for the delay, the court in Paul Wanjohi Mathenge v Duncan Gichane Mathenge [2013] eKLR, held that:-“...it is clear that the discretion to extend time is indeed unfettered. It is incumbent upon the applicant to explain the reasons for delay in making the application for extension and whether there are any extenuating circumstances that can enable the Court to exercise its discretion in favour of the applicant.”

14. It is interesting that whilst the Appellant provided his grounds for filing a late appeal as a misunderstanding as to the person that was to respond to the Commissioner and file the Appeal, the only document he attached to the application to confirm any correspondence between the parties is a progress report for a virtual ADR Meeting held on 31st January, 2022 relating to Skylimit Academy Kutus.

15. Further, the progress report depicted the objection date for the subject matter of the Meeting, Skylimit Academy Kutus, to be 29th May, 2021, the objection decision date to be 18th August, 2021, Notice of Appeal date to be 10th June, 2021 and the Appeal number to be TAT No. 660 of 2021.

16. The Tribunal notes that the said progress report stated, under a heading “Commissioner’s Position” that the Commissioner would issue an assessment to the partnership and the same would be regularized in iTax.

17. In relation to the current Appeal and related application, the Appellant filed an Affidavit sworn by the Appellant himself, a Memorandum of Appeal and a Statement of Facts dated 4th November and 5th November 2024, respectively. The Appellant further attached two Assessment Orders issued to Phinears Njagi Munyi dated 19th January, 2021 and 26th January, 2021, two Objection Application Acknowledgement Receipts dated 15th March, 2021 and a Notice of Intention to Appeal dated 6th November, 2024. The Appellant further annexed to the application an objection decision issued on 4th May, 2022.

18. In essence therefore, there was a delay of over 2 years and 6 months from 4th May, 2022 when the objection decision was issued to 5th November, 2024 when the Appellant filed the application under consideration. The delay in filing the Appeal is obviously inordinate and with no reasonable explanation therefor.

19. The Tribunal in its finding is persuaded by the Ugandan case of Ojara vs. Okwera (Miscellaneous Civil Application 2017/23) [2018] VGHCCD 42 where it was stated as thus:-“An order for enlargement of time to file the appeal should ordinarily be granted unless the applicant is guilty of unexplained and inordinate delay in seeking the indulgence of the court.”

20. The Appellant did not provide documents to support his averment that the delay in filing the Appeal was occasioned by a misunderstanding between himself and the Respondent as to who should file an Appeal before this Tribunal. It is therefore the Tribunal’s finding that the Appellant has not established any reasonable cause for the delay.

21. Having found as above, it is the Tribunal’s finding that there is no need in analysing the remaining factors for consideration as doing so would be an exercise in futility and a waste of the Tribunal’s time.

22. The Tribunal in the circumstances finds that the application lacks merit and finds in favour of the Respondent.

23. With the application for leave to file an appeal out of time having failed the Notice of Appeal and the Appeal documents filed simultaneously with the application have no legal foundation and the Appeal is thus unsustainable in law.

Disposition 24. The Tribunal in the circumstances finds that the application lacks merit and the Appeal filed therewith is incompetent and the Orders that accordingly recommend themselves to the Tribunal are as follows:-a.The application for extension of time be and is hereby dismissed.b.The Appeal be and is hereby struck out.c.No orders as to costs.

DATED AND DELIVERED AT NAIROBI THIS 24TH DAY OF JANUARY, 2025. DR RODNEY O. OLUOCH - CHAIRPERSONGLORIA A. OGAGA - MEMBERCYNTHIA B. MAYAKA - MEMBER