https://new.kenyalaw.org/akn/ke/judgment/ketat/2026/245

 REPUBLIC OF KENYA IN THE TRIBUNAL OF KENYA AT NAIROBI COUNTY COURT NAME: TAX APPEALS TRIBUNAL CASE NUMBER: TATC/E286/2026 SOLTEK BUILDERS LIMITED VS KENYA REVENUE AUTHORITY RULING 1. The Applicant moved the Tribunal vide a Notice of Motion Application dated 6th March, 2026 and filed on even date seeking the following Orders; 1. Spent 2. THAT this Honourable Tribunal be pleased to extend the time within which the Applicant is to file the Memorandum of Appeal, the Statement of Facts, and the Appeal arising from the Respondent’s Objection Decision dated 18th October 2021. 3. THAT consequently, the Memorandum of Appeal, Statement of Facts, and Appeal be deemed to have been duly and properly filed within time. 4. THAT this Honourable Tribunal be pleased to direct the Respondent to withdraw the agency notice issued against the Applicant pending the hearing and determination of this Application and the Appeal. 5. THAT the Applicant be at liberty to apply for such further orders as this Honourable Tribunal may deem just and fit to grant. * 1. THAT the costs of this Application be in the cause. Which Application is based on the following grounds: 1. THAT the Respondent rendered an Objection Decision dated 18th October 2021, which was communicated to the Applicant via email and confirmed on the iTax system on 12th March 2025. 2. THAT the additional income assessed is fictitious, as the amount included in the assessment does not reflect the actual income earned by the Applicant. 3. THAT the Applicant fully declared and correctly filed all income for the relevant period, and supporting documents are available. 4. THAT the disputed income does not arise from any business activity, the Applicant’s business operations being construction, with no other revenue stream capable of generating the alleged additional income. 5. THAT the said assessment distorts the Applicant’s tax liability and imposes an unjustified financial obligation on the Applicant. 6. THAT the intended Appeal raises arguable issues of both law and fact which merit determination on their merits. 7. THAT no prejudice shall be suffered by the Respondent if the orders sought are granted, whereas the Applicant stands to suffer substantial and irreparable loss through enforcement measures, including agency notices, without being afforded an opportunity to be heard. 8. THAT the Applicant is willing to abide by any reasonable conditions that this Honourable Tribunal may impose in allowing this Application. 9. THAT it is in the interest of justice that the prayers sought herein be granted. 1. The Application was supported by a Sworn Affidavit of **Abdi Ahmed Madey**, the Applicant, dated 6th March, 2026 and filed 12 th March, 2026 citing the following grounds; * 1. THAT, I am a Director Soltek Builders Limited, the Applicant herein and I am duly authorized and competent to swear this Affidavit on its behalf. 2. THAT Soltek Builders Limited is a limited liability company duly incorporated under the Companies Act, and its principal business activity is construction. 3. THAT, AY Adan & Ibrahim LLP are our appointed Tax Agents and are duly authorized to handle the Appellant’s tax, audit and business advisory matters. 4. THAT, the company was issued with an Additional Assessment notice on 23rd August, 2021 on Income Tax for the period January to December 2020. 5. THAT, the Appellant, through its tax agents, AY Adan & Ibrahim LLP, lodged an objection to the said assessments on 30th August, 2021 clearly stating our grounds for objection and amendments required to be made to correct the decision. 6. THAT the Objection was deemed invalid by the Commissioner of Legal Services & Board Coordination on 18th October, 2021 and the Appellant thereafter provided all documents and explanations requested during the objection review process. 7. THAT on 18th October, 2021, the Commissioner issued an Objection Decision rejecting the Appellant’s Objection and reaffirming the Additional Assessments, which decision was communicated to the Appellant via email and uploaded on the iTax system on 12th March, 2025. * 1. THAT the said assessment is incorrect, excessive and not supported by the actual financial records and transactions of the business. 2. THAT the additional VAT assessed does not correspond with the actual taxable supplies made by the business during the relevant tax period, as evidenced by the company’s sales records, invoices and bank statements 3. THAT the business maintains proper accounting records including sales invoices, purchase invoices, bank statements and tax returns filed through the iTax system, which accurately reflect the business transactions for the relevant period which is January to December 2020. 4. THAT no prejudice shall be suffered by the Respondent if the orders sought are granted and it is in the interest of justice, fairness and equity that this Honourable Tribunal exercises its discretion in favour of the Appellant. 5. THAT, the appellant is willing to abide by any reasonable and just conditions this Honourable Tribunal may impose in allowing this application. 6. THAT, what is deponed to herein is true to the best of my knowledge, information and belief. 1. In Response to the Application, The Respondent filed the following grounds of opposition dated and filed on 2nd April, 2026. 1. THAT in absence of any Appeal against the Objection decision dated 18th October 2021, it is within the Respondent’s mandate to enforce collection of the outstanding confirmed tax liabilities, including by way of Agency Notices. 2. THAT the Applicant has not demonstrated to be within the ambit of Sections 13(3) and (4) of the Tax Appeals Tribunal Act and is undeserving of the discretionary Orders sought 3. THAT the inordinate delay of over 5 YEARS in making this Application has not been satisfactorily explained and/or at all. 4. THAT it would highly be prejudicial to the Respondent to defend such a late Appeal, and fail to collect the aforesaid much needed taxes that are due and payable for the public good. 5. THAT the Application herein is therefore frivolous, un merited and liable for striking out with costs in the first instance. 6. THAT the Respondent pray that the Application herein be struck out with costs to the Respondent. # Analysis and Findings 1. The Tribunal has carefully considered the Notice of Motion Application dated 6th March, 2026, the Supporting Affidavit, the Grounds of Opposition filed by the Respondent. 2. The dispute herein arises from a tax assessment issued against the Applicant in respect of its income tax obligations for the period January to December 2020. On or about 23rd August 2021 the Respondent issued an Additional Assessment to the Appellant alleging the existence of undeclared income. 3. Being dissatisfied with the said assessment the Applicant through its appointed tax agents lodged a Notice of Objection on 30th August 2021 setting out the grounds of objection and providing the necessary explanations in support of its position. Subsequently on 18th October 2021 the Commissioner rendered an Objection Decision declaring the objection invalid and reaffirming the Additional Assessment. Although the decision was made on that date it was only communicated to the Appellant via email and uploaded onto the iTax system much later on 12th March 2025. 4. The Applicant contends that it had duly declared all its income for the relevant period and maintains proper accounting records to support its position. However, in the absence of a filed Appeal within the prescribed statutory timelines owing to the delayed communication of the Objection Decision the Respondent proceeded to enforce collection measures including the issuance of agency notices. 5. Faced with imminent enforcement and substantial financial prejudice the Appellant moved the Tribunal by way of a Certificate of Urgency and Notice of Motion dated 6th March 2026 seeking among other orders extension of time to lodge its Appeal out of time, validation of the intended Appeal documents and interim relief to suspend enforcement measures pending the hearing and determination of both the Application and the intended Appeal. 6. Under Rule 10 of the Tax Appeals Tribunal Procedure Rules and Section 13(3) and (4) of the Tax Appeals Tribunal Act, the Tribunal is vested with discretionary power to extend time where sufficient cause is shown. While absence from Kenya and sickness are expressly listed, the inclusion of “**any other reasonable cause**” is deliberately broad and intended to accommodate circumstances that do not neatly fall within the enumerated categories but nonetheless justify departure from strict timelines. 1. In the present circumstances, the delay attributable to the Respondent is itself substantial, being a period of approximately 3 years, 4 months and 22 days before communication of the Objection Decision through the Applicant’s official channels. Equally, the Applicant’s delay of 11 months and 22 days in moving the Tribunal after such communication is, on its face, inordinate. 2. However, the Tribunal is not confined to a mechanical computation of time but is required to interrogate the surrounding conduct and context of both parties. The fact that the Respondent, a public authority charged with continuous engagement with taxpayers, issued and communicated its decision after such a prolonged period introduces an element of procedural inequity which cannot be ignored. 3. As in the case of **Nicholas Kiptoo Arap Korir Salat v Independent Electoral and Boundaries Commission & 7 Others [2014] eKLR** The Supreme Court stated, Extension of time is not a right of a litigant but an equitable remedy available at the discretion of the court. 1. The Tribunal’s appreciation of the Appellant’s business model as one that is not necessarily engaged in continuous daily transactions provides context, though not a full excuse, for the lapse in promptly detecting the communication. While taxpayers bear a duty to monitor their official communication channels, the Respondent bears an equal obligation to act with timeliness and procedural fairness in issuing and communicating its decisions. 2. Where both parties demonstrate comparable laxity, the scales of justice shift from strict compliance toward substantive fairness, more reason why the Tribunal on this particular case departs from the case of **Lamrinet Kenya Limited v** **Commissioner of Domestic Taxes (TAT Case),** where the court held that Communication through iTax/email constitutes valid service, and failure to monitor does not amount to reasonable cause. 1. It is in this narrow but critical space that “any other reasonable cause” may properly be invoked. The cumulative effect of a significantly delayed communication by the Respondent, coupled with the nature of the Appellant’s operations and the absence of demonstrated bad faith, constitutes a reasonable cause sufficient to justify the exercise of the Tribunal’s discretion. Denying extension in such circumstances would elevate one parties indolence against the other, while granting it preserves the principle that disputes should, where possible, be determined on their merits. 2. Accordingly, the Tribunal reasonably find that the interests of justice are best served by granting the extension of time, thereby affording both parties a fair and balanced opportunity to ventilate their respective positions, notwithstanding the evident delays on both sides. # Disposition 1. From the foregoing, the Tribunal accordingly makes the following Orders: - 2. The Application be and is hereby Allowed 3. Appellants Notice of Appeal, Memorandum of Appeal and statements of facts are deemed to be properly filed 4. Respondent to file reply to the Statement of facts within 14 days. 5. No orders as to costs. 6. It is so ordered. **DATED** and **DELIVERED** at **NAIROBI** on this 19TH DAY OF MAY **2026.** SIGNED BY/FOR: HON. EUNICE NJERI NGANGA HON. BONIFACE KIBIY TERER HON. BILLY GRAHAM OKUMU MIJUNGU **★ TH E JUDICIAR Y O F KENY A ★** **HON. EUNICE NJERI NGANGA HON. BONIFACE KIBIY TERER HON. BILLY GRAHAM OKUMU MIJUNGU** Tax Appeals Tribunal Tribunal Date: 2026-05-19 16:27:59