https://new.kenyalaw.org/akn/ke/judgment/ketat/2026/120

Ngeru Holdings Ltd v Commissioner of Domestic Taxes (Miscellaneous Tax Appeal E036 of 2026) [2026] KETAT 120 (KLR) (26 June 2026) (Ruling) Neutral citation: [2026] KETAT 120 (KLR) Republic of Kenya In the Tax Appeal Tribunal Miscellaneous Tax Appeal E036 of 2026 RM Mutuma, Chair, G Ogaga, T Vikiru & JM Malla, Members June 26, 2026 Between Ngeru Holdings Limited Applicant and Commissioner of Domestic Taxes Respondent Ruling 1.The Applicant filed a Notice of Motion dated and filed on 24th April 2026 seeking the following Orders: -a.Spent.b.That the Applicant be allowed to file his appeal out of time.c.That pending hearing and determination of this Application and Appeal, conservatory orders be issued staying the implementation of the Objection decision dated 16th June 2025.d.That this Honourable Tribunal be pleased to issue such further or other orders as it may deem just and expedient for the ends of justice. 2.The Application which is supported by an Affidavit sworn by Eunice Njango Ngeru, the Applicant’s managing director on 24th April 2026 and filed on the same date, is premised on the following grounds: -a.That the Appellant’s lead director was adversely sick and hospitalized.b.That the Commissioner issued an Objection decision dated 16th June 2025 rejecting the objection raised on Company Income Tax and VAT Additional Assessments for the years 2019 to 2022, for an incremental amount of Kshs. 36,807,352.66 (exclusive of interest and penalties) and Kshs. 57,451,871.04 (inclusive of interest and penalties).c.That the Commissioner did not give the Applicant a proper opportunity to file its response to the Assessment, as the Managing Director, who is a person living with a disability, was at the material time unable to effectively engage in the process.d.That due to the Director’s condition the Applicants day to day transaction were quite slowed and unfortunately response to the Assessment was one of the affected areas.e.That the Applicant stands to suffer an injustice if the prayed for orders are not given. 3.The Respondent did not file a response to the Application. 4.Both Parties did not file written submissions. Analysis and Findings 5.The Tribunal notes that the Notice of Motion Application is for Appellant/Applicant primarily seeking leave of the Tribunal to file its appeal out of time. 6.The Appellant/Applicant received the Objection decision dated 16th June 2025 on the same date, which it intended to Appeal against. Having failed to file its Notice of Appeal and substantive Appeal within the statutory timelines, the Appellant/Applicant filed this Application on 24th April 2026. 7.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 the Applicant. 8.In determining whether to extend time, the Tribunal was guided by the decision of the Court in Charles Karanja Kiiru v Charles Githinji Muigwa [2017] eKLR, where the learned Judge stated that:-“It is trite that extension of time is not a right of a party. It is an equitable remedy that is only available to a deserving party, at the discretion of the Court.” 9.On the criteria of the issues to be considered when granting an extension to file an appeal out of time, the Tribunal, guided by the principles set out in John Kuria v Kelen Wahito, Nairobi Civil Application Nai 19 of 1983 April 10, 1984, referred to by the Judges in the case of Wasike V Swala [1984] KLR 591, Sammy Mwangi Kiriethe & 2 others v Kenya Commercial Bank Ltd (supra) and Section 13 of the Tax Appeals Tribunal Act 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 there will be prejudice suffered by the Respondent if the extension is granted. a. Whether there is a Reasonable Cause for the Delay 10.In considering what constitutes a reasonable reason for delay, the court in Balwant Singh v Jagdish Singh & Ors (Civil Appeal No.1166 of 2006), held that: -“The test is whether or not a cause is sufficient to see whether it could have been avoided by the party by the exercise of due care and attention.” 11.The statutory timelines and provisions to file an appeal have been clearly set out in the Tax Appeal Tribunal Act. Section 13 of the Act provides as follows with regard to the statutory timelines in commencing an appeal process:-“13.(1)A notice of appeal to the Tribunal shall—(a)be in writing;(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 make a decision on the appeal.” 12.For a taxpayer who has not met the timelines as provided in the above provision of the law, Section 13(4) of the Tax Appeals Tribunal Act provides the conditions that the taxpayer ought to meet to enable the Tribunal to exercise its discretion to extend time to appeal under Section 13(3) which provides as follows: -“13.(3)The Tribunal may, upon application in writing or through electronic means, extend the time for filing the notice of appeal and for submitting the documents referred to in subsection (2).(4)An extension under subsection (3) may be granted owing to absence from Kenya, or sickness, or other reasonable cause that may have prevented the applicant from giving notice of appeal within the specified period.” 13.Regarding the reasons for the delay, the Appellant stated that its managing director was, who is a person living with disability, had limitations which materially affected her ability to effectively handle the dispute. 14.The Tribunal notes that the Appellant cited illness of its director as the cause for its delay in filing the Appeal. To support this reason, the Appellant attached documents from the director’s certificate of registration for persons with disability and a medical report dated 12th July 2025 detailing medical examinations undertaken and treatment for the diagnosed condition. 15.The Objection decision was issued by the Respondent on 16th June 2025. It is the Tribunal’s view that although the duration and the level of indisposition of the director could not be determined, based on the evidence adduced, it is persuaded that the managing director had indeed suffered critical ill health. 16.Consequently, the Tribunal determined that the Appellant had demonstrated reasonable cause for the delay in lodging the Appeal within the statutory period. b. Whether there will be Prejudice Suffered by the Respondent if the Extension is Granted 17.The courts have held that in considering whether to extend time, due regard must be given to whether the extension will prejudice the opponent. In determining this, the Judge in Patrick Maina Mwangi v Waweru Peter [2015] eKLR quoted the decision in United Arab Emirates V Abdel Ghafar & Others 1995 IR LR 243 in finding that: -“…a plaintiff should not in the ordinary way be denied an adjudication of his claim on its merits because of a procedural default, unless the default causes prejudice to his opponent for which an award of cost cannot compensate…” 18.The test, therefore, as set out in the case above is whether the Respondent will suffer irreparable prejudice if the application is granted. It is the Tribunal’s view that the Appellant/Applicant’s recourse to justice lies in an appeal to the Tribunal. Thus, the Appellant/Applicant would suffer prejudice if it is not granted leave to file its appeal. The Respondent, on the other hand, will not suffer prejudice since it will still be able to collect the taxes plus interest and penalties should the Appellant be found to be at fault. 19.The Tribunal, therefore, finds that the Respondent will not suffer prejudice if the extension is granted. Disposition 20.The Tribunal finds that the Application is merited and accordingly proceeds to issue the following Orders: -a.The Notice of Motion Application dated and filed on 24th April 2026 be and is hereby allowed.b.Leave be and is hereby granted for the Appellant to file its Notice of Appeal, Memorandum of Appeal, Statement of Facts and tax decision out of time.c.The Appellant to file and serve its Notice of Appeal, Memorandum of Appeal, Statement of Facts, Appealable decision and supporting documents within 14 days of delivery of this Ruling.d.The Respondent be and is at liberty to file and serve its response to the Appeal within thirty (30) days of being served with the Appeal documents.e.No orders as to costs. DATED AND DELIVERED AT NAIROBI THIS 26TH DAY OF JUNE 2026.……………………………..….ROBERT M. MUTUMACHAIRMAN……………………………… ……..….……..……………..GLORIA A. OGAGAMEMBER……………………………… ……..….……..……………..DR. TIMOTHY B. VIKIRUMEMBER………………………………JIMMY M. MALLAMEMBER………………………………