Aeon Credit goes to Court of Appeal over RM96.9m income taxes

Its job scope for the contract involves supplying concrete cement and metal for the upgrading of the Train Cargo Terminal at Padang Besar, Perlis, Dolphin said in a filing with Bursa Malaysia.

KUALA LUMPUR: Aeon Credit Service (M) Bhd has filed an appeal to the Cout of Appeal after its judicial review of additional assessments and penalities by the taxman totalling RM96.81mil was dismissed by the High Court.

It said on Tuesday it had filed a for a formal application on March 5 for a stay against the enforcement of the notices of additional assessment to the High Court pending the disposal of its appeal.

To recap, Aeon Credit announced on Dec 13, 2017 that the Director General of Inland Revenue (DGIR) had imposed additional assessment with penalties for the year of assessments for 2010 to 2016 totalling RM96.81mil.

Following this development, Aeon Credit initiated proceedings to challenge the validity and legality of the said notices of additional assessment. 

It said the DGIR had varied the loan transaction collaterised by receivables undertaken by the company with a local financial institution to that of a sale of receivables. 

The company had also said the DGIR did not specify which provision of the Income Tax Act 1967 in making this variation.

The DGIR also raised time barred assessments for the years of assessment 2010 and 2011. The DGIR also did not provide any reason for raising the time barred assessments.

The DGIR also imposed penalties for alleged submission of incorrect returns. 
 
On Jan 5, Aeon Credit filed notices of appeal to the Special Commissioners of Income Tax with the DDIR to appeal against the notices of additional assessment.
 
 Aeon Credit also applied to the High Court for judicial review and stay of proceedings. 

On March 5,  the High Court dismissed the application for judicial review. 

However, the High Court granted an interim stay against the enforcement of the notices of additional assessment pending the filing and hearing of the formal application for a stay from the Court.

Aeon Credit said there are reasonable grounds to challenge the validity of the said notices of additional assessment raised by the DGIR and the penalties imposed. 

This is especially when at all material times, the Company had sought professional advice from an independent firm of tax consultants on the tax treatment and that the notices of additional assessment for the years of assessment 2010 and 2011 are time barred.