Former Lembaga Tabung Haji (TH) chairman Datuk Seri Abdul Azeez Abdul Rahim has applied for leave to commence a judicial review against the Inland Revenue Board (LHDN) over its decision to cancel a RM4.8 million tax and penalty settlement reached four years ago.
The 60-year-old former Baling MP filed the application at the High Court on Sept 6, seeking to overturn LHDN’s decision to cancel the settlement dated Feb 9, 2022, as well as composite assessment notices issued on March 22, 2022, for assessment years 2011 to 2020.
He is also seeking a court order compelling LHDN to honour the settlement, which he claims he had fully complied with by paying the agreed amount through instalments.
According to court documents, Abdul Azeez said LHDN had conducted a tax investigation into his affairs in late 2021 or early 2022 before both parties reached the settlement.
Under the agreement, he was required to pay RM4.8 million in taxes and penalties for assessment years 2011 to 2020. Abdul Azeez claims he subsequently completed the payments as agreed.
However, he said he received a letter dated Aug 7 from LHDN Negeri Sembilan’s Strategic Compliance Division informing him that the settlement and composite assessment notices had been cancelled.
He also received notices requiring him to attend an interview and provide information relating to assessment years 2014 to 2025. Abdul Azeez further claimed that LHDN issued several additional notices under the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act (AMLA).
The Attorney General’s Chambers (AGC) is opposing his application, arguing that the challenge was premature as LHDN’s investigation is still ongoing.
During proceedings before Judge S Indra Nehru, Abdul Azeez’s lawyer Nicholas Mark Pereira argued that the cancellation could be challenged because Section 96A(6) of the Income Tax Act 1967 provides that a composite assessment is final and conclusive.
“My client has paid the RM4.8 million as agreed, but the agreement was cancelled without a detailed explanation of the alleged new facts discovered by LHDN,” he said.
Pereira also sought a temporary stay to prevent LHDN from continuing its investigation or enforcement action relating to the matter pending the outcome of the judicial review.
Another lawyer representing Abdul Azeez, Datuk Amer Hamzah Arshad, said the status quo should be maintained, arguing that the legal provision allowing the settlement to be cancelled after a composite assessment had been agreed was being challenged.
However, Senior Federal Counsel Ng Siew Wee argued that Abdul Azeez had not been ordered to pay any additional tax and that no new or additional assessment had been issued when the judicial review application was filed.
He said Abdul Azeez’s application was based on an assumption that the cancellation of the settlement and composite assessment would eventually lead to a new or additional assessment and enforcement action.
“The cancellation of the settlement may be an administrative action, but it does not mean that Abdul Azeez currently has a tax liability that must be paid,” he said.
Ng added that the new notices issued by LHDN were only for information-gathering and investigative purposes and did not determine the amount of tax Abdul Azeez would be required to pay.
Senior Revenue Counsel Marina Ibrahim appeared for LHDN.
After hearing submissions from both sides, Indra Nehru fixed Nov 11 for a decision on Abdul Azeez’s application for leave to commence the judicial review.
