The North West Zone, Kaduna of the Tax Appeal Tribunal has set aside the additional tax assessment of N195m issued against Sterling Bank Plc by the Kano State Internal Revenue Service covering the period of 2014 to 2019.
The panel led by Umar M. Adamu held that the revenue authority failed to prove concealment, wilful default, or negligence and therefore had no lawful basis to raise the additional assessment.
From facts, the appellant, Sterling Bank, had challenged Kano State Inland Revenue Service’s demand notice of 3 April 2023, which alleged that the bank failed to remit the PAYE amounting to N195,495,619.94. The bank maintained that it had already paid earlier assessments for the relevant years and had supplied the documents used in the previous audits in 2021.
In defense, the respondent, Kano State Inland Revenue Service, argued that the bank had concealed relevant information and relied on the Personal Income Tax Act and several authorities to justify an additional assessment. Kano State Inland Revenue Service relied on alleged failures to provide documents and claimed that the assessment was based on a comprehensive examination of records.
In Opposition, the Learned Counsel for the Sterling Bank argued that his client never concealed nor defrauded or even negligently failed to pay appropriate tax. Counsel further submitted that the basis of the assessment of N195,495,619 was ultra vires the powers of the Kano State Inland Revenue Service, having no statutory backing, as the names trumped up by the Kano State Inland Revenue Service were fictitious, as they were never the staff of the Bank, and as such, the Bank never paid them those emoluments.
In its considered Judgment, the Tribunal Panel, headed by Hon. Umar M. Adamu and four other commissioners, dismissed the Kano State Revenue Service for failing to present concrete, cogent, and compelling evidence to justify its demands under the Personal Income Tax Act.
On the claim that the assessment was a Best of Judgment Assessment, the tribunal, after a thorough examination of the bank’s documents, held that the Kano State Inland Revenue Service did not demonstrate any non-compliance by the Sterling Bank.
In its final decision, the tribunal held that Kano State Inland Revenue Service failed to present concrete and compelling evidence to justify the additional assessment of N195,495,619 levelled against Sterling Bank.
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