Ketua Pengarah Hasil dalam Negeri v Yeo Siew Hee (Q-01(A)-160-03/2021)

There are three appeals before us, filed by the Appellant, appealing the decision of the learned High Court Judge dated 24.1.2021 in allowing the Respondents' Judicial Review applications. The Appeals are namely: i. Q-01(A)-158-03/2021 (Appeal 158) ii. Q-01(A)-159-03/2021 (Appeal 159) iii. Q-01(A)-160-03/2021 (Appeal 160)

These 3 appeals involve the same facts and are interrelated.

The Appellant is the Director General of Inland Revenue ("the DGIR").

The Respondents, Jeffery Florian (Q-01(A)-158-03/2021 and Q01(A)-159-03/2021) and Yeo Siew Hee (Q-01(A)-160-03/2021) are the taxpayers, challenging the Notices of Additional Assessment for Year Assessment 2014 (hereinafter referred to as "the Notices"). The subject matter in dispute is the Notices of Additional Assessment raised by the Appellant against the Respondents.

Dissatisfied with the Notices, the Respondents filed the Judicial Review Application against the Notices. Essentially, the relief sought in the Judicial Review application applied by the Respondents are as follows: For Appeal 158:

An order for Certiorari to quash the Appellant's Decision in the form of the notice of additional assessment for the year of assessment ("YA") 2014 dated 28.6.2019 ("Decision") on the grounds that the said Decision of the Appellant in this respect was illegal, void, unlawful and/or in excess of authority, had been irrational and/or unreasonable, and resulted in a denial of the Respondents' legitimate expectations;

(ii) A Declaration that the Appellant is bound by and shall give effect to the decision of the Federal Court in Kesatuan Pekerja-Perkerja Bukan Eksekutif Maybank Bhd v Kesatuan Kebangsaan Pekerja-Pekerja Bank & Anor [2017] 4 CLJ 265 which held that it is a settled public law principle and principle of natural justice that a public decision-making body is under a duty to give reasons for its decision;

(iii) A Declaration that the Appellant is bound by and shall give effect to the decision of the Court of Appeal in Majlis Bandaraya Pulau Pinang v Datin Noorzaina Mat Zain & Anor [2019] 4 CLJ 36, adopting Pembinaan Batu Jaya Sdn Bhd v Pengarah Tanah dan Galian, Selangor & Anor [2016] 5 CLJ 250, which held that where a person has some right or interest, or legitimate expectation of which it would not be fair to deprive him without a hearing or reasons given, then these should be afforded him accordingly;

(iv) A Declaration that the Appellant is bound by and shall give effect to the decision of the Federal Court in Kesatuan Pekerja-Pekerja Bukan Eksekutif Maybank Bhd v Kesatuan Kebangsaan Pekerja-Pekerja Bank & Anor [2017] 4 CLJ 265 which held that it is a settled public law principle and principle of natural justice that a public decision-making body is under a duty to give reasons for its decision;

A Declaration that the Appellant is bound by and shall give effect to the decision of the Court of Appeal in Majlis Bandaraya Pulau Pinang v Datin Noorzaina Mat Zain & Anor [2019] 4 CLJ 36, adopting Pembinaan Batu Jaya Sdn Bhd v. Pengarah Tanah dan Galian, Selangor & Anor [2016] 5 CLJ 250, which held that where a person has some right or interest, or legitimate expectation of which it would not be fair to deprive him without a hearing or reasons given, then these should be afforded him accordingly;

(vi) A Declaration that the Appellant is bound by and shall give effect to the decision of B Surinder Singh Kanda v The Government of the Federation of Malaya [1962] 1 MLJ 169 which established that if the right to be heard is to be a real right which is worth anything, it must carry with it a right in the accused man to know the case which is made against him. He must know what evidence has been given and what statements have been made affecting him, and then he must be given a fair opportunity to correct or contradict them, and

(vii) A Declaration that the Appellant is bound by and shall give effect to the decision of the Superior Court in National Land Finance Co-operative Society Ltd v Director General of Inland Revenue [1993] 4 CLJ 339 which ruled that a subject was not to be taxed without clear words." For Appeal 159:

An order for Certiorari to quash the Appellant's Decision in the form of the notice of additional assessment for the year of assessment ("YA") 2014 dated 31.12.2019 ("Decision") on the grounds that the said Decision of the Appellant in this respect was illegal, void, unlawful and/or in excess of authority, had been irrational and/or unreasonable, and resulted in a denial of the Respondents' legitimate expectations;

(ii) That all further proceedings, including the enforcement and effect of the Decision, be stayed until the full and final determination of the application to quash the Decision. For Appeal 160:

An order for Certiorari to quash the Appellant's Decision in the form of the notice of additional assessment for the year of assessment ("YA") 2014 dated 31.12.2019 ("Decision") on the grounds that the said Decision of the Appellant in this respect was illegal, void, unlawful and/or in excess of authority, had been irrational and/or unreasonable, and resulted in a denial of the Respondents' legitimate expectations;

(ii) A declaration that the Respondent is bound by and shall give effect to and honour the Applicant's Surat Aku-Janji Penyelesaian Kebelakangan dated 28.6.2019

(iii) That all further proceedings, including the enforcement and effect of the Decision, be stayed until the full and final determination of the application to quash the Decision. [6] In gist, the Respondents are essentially attempting to quash the decision of the Appellant, which would render the notices void. On 13.9.2019, the learned High Court Judge granted leave for Judicial Review and on 24.2.2021 allowed the Judicial Review application in favour of the Respondents. Salient Facts of the Case [7] To appreciate the issues before us, it is pertinent to note that the facts of each case in these 3 appeals need to be stretched out accordingly. The pertinent facts of the case are based on the affidavits filed and affirmed by Jeffery Florain, Yeo Siew Hee (the Respondents), and the Appellant. Appeal 158 [8] The Respondent (Jeffery Florain) and one Yeo Siew Hee had on 1.8.2013 vide Form 32A, Form of Transfer of Securities acquired 999 ordinary shares and 2,000 ordinary shares respectively in one Acelite Development Sdn Bhd ("Acelite Development") with the company number 849420-H from one Ting Moi Hie for RM1.00 per share. [9] Acelite Development is a company incorporated on 11.3.2009 with the registered address at No.6, 1 $ ^{st} $ Floor, Jalan Kampong Nyabor, 96000 Sibu Sarawak with the nature of business being cultivation of oil palm. [10] The Sarawak Land and Survey Office, Bintulu Division, had on 9.1.2014 offered Acelite Development Sdn Bhd alienation of a land situated at Jalan Bintulu Sibu, Bintulu and described as Lot 1 Block 50 Kemena Land District ("the said land") subject to the terms and express conditions specified below:- Area2597 ha, more or lessTermSixty(60)yearsPremiumRM1,924,377.00Annual RentRM6,493.00Survey FeesRM0.00(including cost of boundary marks), reparation of Title FeesRM6.00Total Deposit RequiredRM1,930.876.00 [11] On 13.5.2014, pursuant to a Sale and Purchase of Shares Agreement ("Share Sale Agreement") dated the same, the Respondent and Yeo Siew Hee as the registered and beneficial owner of all the 3,000 fully paid up ordinary shares of the company had disposed of all their shares in Acelite Development Sdn Bhd (3,000) to one Quality Avenue Sdn Bhd ("Quality Avenue") for RM23,486,878.80. [12] After the Share Sale Agreement was signed on 13.5.2019, Acelite Development Sdn Bhd had, on 22.5.2014, accepted the alienation of the said land with the deposit of RM1,930,876.00 made to the Bintulu Lands and Surveys Office. Quality Avenue, to facilitate the payment of the purchase price of the Share Sale Agreement had obtained Banking Facilities on 9.7.2014 from Malayan Banking Berhad (Maybank) in which the banking facility received by Quality Avenue Sdn Bhd to facilitate the purchase price of the Share Sale Agreement were subjected to Term Loan 1 with the total amount of RM37,800,000.00. The purpose of Term Loan 1 is to part finance the equity stake of Acelite Development and one Solid Continental Sdn Bhd ("Solid Continental") [13] The Respondent had, according to a letter dated 8.8.2014 to Unit Cukai Keuntungan Harta Tanah ("CKHT") / (Real Property Gain Tax RPGT) Lembaga Hasil Dalam Negeri Sibu Branch, informed the Appellant about the disposal of the Respondent's shares in Acelite Development to Quality Avenue. The Respondent had also contended in that letter that from the date of acquisition of the Respondent's shares in Acelite Development to the date of disposal of the shares, Acelite Development did not own any property nor real property shares thus Acelite Development at the date of disposal of shares by the Respondent is not a Real Property Company thus the Respondent did not file in Form CKHT 1B to the Appellant. [14] The Respondent had, on 16.6.2015, submitted Form B for the Year of Assessment 2014. [15] On 28.6.2019, the Appellant raised an Additional Assessment under Section 91(1) of the Income Tax Act 1967 ("ITA 1967") in the amount of RM1,868,186.84 as the Appellant believes that there exists elements of adventure in the nature of trade/badges of trade in the transfer of the said land to Quality Avenue Sdn Bhd reflected in the Share Sale Agreement dated 13.5.2019 as the Respondent had failed to declare the disposal of shares in Acelite Development be it in Form B of the Year of Assessment 2014 filed by the Respondent nor by filing Form CKHT 1B to the Appellant. [16] Dissatisfied with the Appellant's decision, the Respondent had, on 26.7.2019, filed an appeal to the Special Commissioner of Income Tax ("SCIT") in the prescribed Form Q for the Year of Assessment 2014 against the Notice of Additional Assessment for the Year of Assessment 2014 raised on the Respondent. Appeal 159 [17] On 7.1.2014, the Respondent (Jeffery Florain) and one Yeo Siew Hee purchased 1 unit of Ordinary Share each in Solid Continental from Daily Paradise Sdn Bhd with the consideration sum of RM1.00 only. [18] On 9.4.2014, the company Solid Continental Sdn Bhd was offered by the State Government to be alienated a parcel of land known as Lot 7 Block 18 containing an area of 2,633 hectares, more or less in Buan Land District vide the issue of L&S 80 dated 9.4.2014. [19] On 13.5.2014, less than 5 months-time, the Respondent and Yeo Siew Hee disposed of the whole shares owned by them in Solid Continental Sdn Bhd together with interest on land Lot 7 Block 18 to another company Quality Avenue Sdn Bhd, at the consideration sum of RM23,812,472.40 as follows: Solid Continental Sdn Bhd NoNameNo. of SharesHolding Percentage(%)1Yeow Siew Hee150%2Jeffery Florain150%Total2100% [20] On 22.5.2014,9 days after the shares in Solid Continental Sdn Bhd were disposed of by the Respondent and Yeo Siew Hee to Quality Avenue Sdn Bhd, the company Acelite Development had on 22.5.2014 accepted the offer from Jabatan Tanah dan Survei Bahagian Bintulu for land alienation of Lot 7 Block 18 Buan District Land. [21] On 8.8.2014, the Respondent sent a letter to the Appellant's CKHT/RPGT Unit and informed that: i. The Respondent had on 7.1.2014 acquired 1 share of RM1.00 from Daily Paradise Sdn Bhd in Solid Continental Sdn Bhd; ii. the Respondent had on 13.5.2014 disposed all his shares to Quality Avenue Sdn Bhd; and iii. from the date of acquisition to the date of disposal of the shares, Solid Continental Sdn Bhd did not own any real property nor real property shares. Therefore, shares of Solid Continental Sdn Bhd are not considered real property shares, and Form CKHT 1B is not filed to the Appellant. [22] Sometime between 8.8.2014 and 5.8.2915, the Appellant had instructed the Respondent to submit Form CKHT 1B. On 5.8.2015, upon request by the Appellant's Miri Branch, the Respondent, vide a letter dated 5.8.2015, which was received by the Respondent on 1.9.2015, filed the Form CKHT 1B for the disposal of shares in Solid Continental Sdn Bhd. The Respondent also opined that the disposal of shares in Solid Continental Sdn Bhd did not attract real property gains tax as from the date of acquisition of the shares to the date of disposal of shares, Solid Continental Sdn Bhd did not own any real property/ real property shares. [23] On 22.1.2016 and 26.6.2016, the Appellant's Miri Branch had, vide letter dated 22.1.2016, informed the Respondent that the case involving the disposal of shares in Solid Continental Sdn Bhd by Jeffery Florian to Quality Avenue Sdn Bhd will be handled by the Appellant's Kuching Branch. Similarly, the Appellant's Sibu Branch had, vide its letter dated 26.6.2016, informed the Respondent that the CKHT 1B filed by the Respondent with regards to property of Lot 7 Block 18 Buan Land District will be handled by Kuching Branch. [24] On 8.5.2017, the Appellant's Kuching Branch had, vide a letter dated 8.5.2017, informed the Respondent that the disposal of shares by the Respondent in Solid Continental Sdn Bhd and Acelite Development Sdn Bhd were not taxable under the Real Property Gains Tax Act 1967. [25] On 28.6.2019, the Appellant's Kuching Branch had raised an Additional Assessment for YA 2014 on the Respondent amounting to RM1,868,186.84 for the disposal of shares together with interest therein in Acelite Development Sdn Bhd. [26] On 10.7.2019, the Appellant's Miri Investigation Branch informed the Respondent vide its letter dated 10.7.2019 that based on the review of the documents forwarded, the Appellant concluded that the gains from the disposal of shares in Solid Continental Sdn Bhd to Quality Avenue Sdn Bhd are gains that are taxable under the Income Tax Act 1967 wherein gains from disposal under-declared by the Respondent amount to RM10,927,414.00. The Respondent was also given a period of 14 days from the date of the letter to give his reply and failure to do so will attract assessment and penalty under Sections 112(3)/113(2) of the ITA 1967. In the same letter, the Respondent was also informed that the issue on the disposal of shares in Acelite Development Sdn Bhd had been given the same treatment in which it is taxable under the ITA 1967 and Notices of Additional Assessments had been raised by the Kuching Branch on 28.6.2019. [27] On 30.8.2019, the Appellant's Miri Investigation Branch had vide email on 30.8.2019 forwarded the letter dated 10.7.2019 to the Respondent. On 18.9.2019, the letter dated 10.7.2019 issued to the Respondent was returned to the Appellant's Miri Investigation Branch with the note "UNCLAIMED". [28] On 29.10.2029, the Respondent, vide letter dated 29.10.2019, argued that he had never received the physical copy of the letter dated 10.7.2019 and only received the letter vide email on 30.8.2019. The Respondent, vide the same letter, also alleged that the letter dated 10.7.2019 was backdated and denied all the contents of the said letter. [29] On 23.12.2019, the Appellant, vide letter dated 23.12.2019, concluded that the gains from the disposal of shares in Solid Continental Sdn Bhd to Quality Avenue Sdn Bhd were gains that are taxable under Section 4(a) of Income Tax Act 1967 is consistent with the principle of "badges of trade" as there is intention to gain profits, the short term of holding of the shares, nature of asset with commercial value and the method of disposal of shares. The gains under-declared amounted to RM11,906,235.00. [30] On 31.12.2019, the Appellant's Kuching Branch had, vide letter dated 31.12.2019, informed the Respondent that the disposal of shares is not taxable under the Real Property Gains Tax Act 1967. The Appellant's Miri Investigation Branch issued a letter dated 31.12.2019 affirming the decision in letter dated 23.12.2019 and issued Notices of Additional Assessments for YA 2014 on the Respondent. [31] Dissatisfied with the Appellant's decision, the Respondent, on 28.1.2020, filed an appeal against the Appellant's Decision by filing in Form Q dated 28.1.2020 to the SCIT. Appeal 160 [32] On 31.12.2013, the Respondent purchased 1000 units of Ordinary Shares in Acelite Development Sdn Bhd from Patrick Embol Anak Undi with the consideration sum of RM1,000.00 only. The Respondent purchased 1000 units of Ordinary Shares in Acelite Development Sdn Bhd from Peter Anak Mijim with the consideration sum of RM1,000.00 only. [33] On 7.1.2014, the Respondent purchased 1 unit of Ordinary Share in Solid Continental from Daily Paradise Sdn Bhd with the consideration sum of RM1.00 only. [34] On 9.1.2014, the company Acelite Development Sdn Bhd was offered by the State Government to be alienated a parcel of land known as Lot 1 Block 50 containing an area of 2,597 hectares, more or less in Kemena Land District vide the issue of L&S 80 dated 9.1.2014. [35] On 9.4.2014, the company Solid Continental Sdn Bhd was offered by the State Government to be alienated a parcel of land known as Lot 7 Block 18 containing an area of 2,633 hectares, more or less in Buan Land District vide the issue of L&S 80 dated 9.4.2014. [36] On 13.5.2014, less than 5 months' time, the Respondent and less than 10 months' time another named Jeffery Florian disposed of the whole shares owned by them in Acelite Development Sdn Bhd together with the interest on land Lot 1 Block 50 to another company Quality Avenue Sdn Bhd at the consideration sum of RM23,486,878.80. In less than 5 months, the Respondent and another named Jeffery Florian disposed of the whole shares owned by them in Solid Continental Sdn Bhd together with interest on land Lot 7 Block 18 to another company, Quality Avenue Sdn Bhd, at the consideration sum of RM23,812,472.40 as follows: Acelite Development Sdn Bhd NoNameNo. of SharesHolding Percentage(%)1Yeow Siew Hee150%2Jeffery Florain150%Total2100% [37] On 22.5.2014, 9 days after the shares in Acelite Development Sdn Bhd and Solid Continental Sdn Bhd were disposed of by Respondent and Jeffery Florian to Quality Avenue Sdn Bhd, the company Acelite Development Sdn Bhd and Solid Continental Sdn Bhd on 22.5.2014 accepted the offer from Jabatan Tanah dan Survei Bahagian Bintulu for land alienation of Lot 1 Block 50 Kemena Land District and Lot 7 Block 18 Buan District Land respectively. [38] On 8.8.2014, the Respondent's letter to the Appellant's CKHT/ RPGT Unit informed that:

the Respondent had on 31.12.213 acquired 2,000 shares of RM1.00 each from Peter Anak Mijim and Patrick Ernbol Anak Undi in Acelite Development Sdn Bhd,

(ii) Respondent had on 13.5.2014 disposed all his shares to Quality Avenue Sdn Bhd. And

(iii) from the date of acquisition to the date of disposal of the shares, Acelite Development Sdn Bhd did not own any real property nor real property shares. Therefore, shares of Acelite Development Sdn Bhd are not considered real property shares and Form CKHT 1B is not filed to the Appellant. [39] On 5.8.2015, upon request by the Appellant's Miri Branch, the Respondent had, vide two letters dated 5.8.2015, which was received by the Appellant on 1.9.2015, filed the Form CKHT 1B for the disposal of shares in Solid Continental Sdn Bhd & Acelite Development Sdn Bhd. The Respondent also opined that the disposal of shares in Solid Continental Sdn Bhd did not attract real property gains tax as from the date of acquisition of the shares to the date of disposal of shares, Solid Continental Sdn Bhd did not own any real property/ real property shares. [40] On 21.12.2015, the Appellant's Miri Branch had, vide two letters dated 21.12.2015 for the purpose of audit requested for the Respondent to submit additional documents i.e. company's audited account for year shares acquired, year prior to acquisition of shares and year company turned into real property company ("RPC") within 21 days from date of letter for Acelite Develoment Sdn Bhd and Solid Continental Sdn Bhd. [41] On 29.12.2015, the Respondent's tax agent, Tomax Tax Services Sdn Bhd, forwarded Form 32A and the Director's Resolutions dated 22.8.2014 together with the Sales & Purchase Agreement for Acelite Development Sdn Bhd and Solid Continental Sdn Bhd. [42] On 4.1.2016, the Respondent's tax agent, Tomax Tax Services Sdn Bhd, forwarded the audited financial statements for Acelite Development Sdn Bhd and Solid Continental Sdn Bhd for the year ending 30.6.2014. [43] On 26.6.2016, vide letter dated 20.6.2016, the Appellant had requested for the Respondent to forward documents to show sales of shares between the Respondent and Syarikat Quality Avenue Sdn Bhd with payment of RM23,486,878.80, i.e., Sales and Purchase Agreement. The Respondent was also reminded that any incorrect claim/return made is an offence that will attract penalty of 45% under Section 113(2) of the Income Tax Act 1967. [44] On 1.7.2016, the Respondent had vide email on 1.7.2016 informed the Appellant that vide letter dated 5.8.2015 addressed to Puan Rafidah Mataji the documents requested had been submitted to the Respondent. On 7.9.2016, the Appellant, vide letter dated 7.9.2016, informed that the disposal of shares in Solid Continental Sdn Bhd and Acelite Development Sdn Bhd were not taxable under the Real Property Gains Tax Act. [45] On 1.4.2019, the Appellant's Miri Investigation Branch had, vide letter to the Respondent dated 1.4.2019 to request additional documents under section 81 of the Income Tax Act 1967 had also informed the Respondent that Malaysia is one of the Contracting Party/Country to the Automatic Exchange of Information Agreement hence Inland Revenue Board of Malaysia has received complete information relating to the financial statements of Malaysian citizens deposited/saved in the financial institutions outside Malaysia. As part of the investigation process, the Appellant had, vide the same letter, requested the Respondent to be present at the Appellant's Miri Investigation Branch for a discussion session on 15.4.2019. On 14.6.2019, the Respondent's tax agent, Deloitte Tax Services Sdn Bhd, forwarded the documents. [46] On 28.6.2019, the Respondent made a voluntary disclosure for Y/A 2012-2017 that he had under-declared his income with an under-declared tax liability of RM250,459.10 for the period of 2012-2017. [47] On 3.7.2019, the Appellant's Miri Branch issued a computer-generated letter informing that there is an outstanding tax amounting to RM250,458.74. On 10.7.2019, a discussion was held between the Respondent's tax agent and the Appellant's Miri Investigation Branch in which the Appellant informed the Respondent's tax agent that his SVDP was not considered. The Appellant's Miri Investigation Branch had informed the Respondent vide letter dated 10.7.2019 that based on the review of the documents forwarded, the Appellant concluded that the gains from the disposal of shares in Acelite Development Sdn Bhd and Solid Continental Sdn Bhd to Quality Avenue Sdn Bhd are gains which are taxable under the Income Tax Act 1967 wherein gains from disposal under declared by the Respondent amount to RM25,296,083.00. The Respondent was also given a period of 14 days from the date of the letter to give his reply and failure to do so will attract assessment and penalty under section 112(3)/113(2) of the ITA 1967. [48] On 13.8.2019, the Respondent, vide letter dated 13.8.2019, argued that the disposal was not an adventure to trade. Again, on 12.9.2019, there was a discussion between the Respondent's representatives, Deloitte Tax Services Sdn Bhd, and the Appellant's Miri Investigation Branch. [49] On 23.12.2019, the Appellant, vide letter dated 23.12.2019, concluded that the gains from the disposal of shares in Acelite Development Sdn Bhd and Solid Continental Sdn Bhd to Quality Avenue Sdn Bhd were gains that are taxable under Section 4(a) of Income Tax Act 1967 and the gains under-declared amounting to RM27,562,154.00. [50] On 30.12.2019, the Respondent, vide letter dated 30.12.2019, objected to the Applicant's letter and stated that the gains from the disposal were not subjected to income tax. The Respondent also states that he had made a Special Program for Voluntary Disclosure ("SVDP") in good faith. On 31.12.2019, the Appellant issued a letter dated 31.12.2019 and informed that the Respondent's SVDP had not been considered as informed to the Respondent's tax agent during the meeting on 10.7.2019. The Appellant affirmed the decision in letter dated 23.12.2019 and issued Notice of Additional Assessment for YA 2014 on the Respondent. [51] Dissatisfied with the Appellant's decision, the Respondent, on 28.1.2020, filed an appeal against the Appellant's Decision to the SCIT by filing in Form Q on 28.1.2020. FINDINGS BY THE HIGH COURT [52] The learned High Court Judge made 3 separate Grounds of Judgment for the three appeals in which the issues addressed by His Lordship were similar and elaborated based on the fact of each case. [53] For Appeals 158 and 159, the learned High Court Judge made his findings as follows: a. There is a duty on the Appellant to provide reasons for its decision. The Appellant, as a public decision-maker and an important part of the Government, has a public interest duty to abide by the principles of fairness, and the absence of reasons may warrant the drawing of a clear inference that there are no good reasons for the impugned Decision. b. The right to be heard should be accorded to the Respondent by the Appellant, which is a public decision-maker and not at another forum, at the SCIT. Denying the Respondent of the right to be heard, the Appellant has breached the doctrine of procedural fairness. To support the learned High Court Judge's decision, His Lordship made several references to several decided cases, such as Yusuf bin Sudin v Suruhanjaya Perkhidmatan Polis & Anor [2011] 3 CLJ 471, FC, Kesatuan Pekerja-Pekerja Bukan Eksekutif Maybank Bhd v Kesatuan Kebangsaan Pekerja-Pekerja Bank & Anor [2017] 2 ILR and Pembinaan Batu Jaya Sdn Bhd v Pengarah Tanah dan Galian, Selangor & Anor [2016] 5 CLJ 250. c. The mere fact that Section 91 of the ITA 1967 did not require reasons to be given does not exempt the Appellant from such duty as held in Kesatuan Pekerja-Pekerja Bukan Eksekutif Maybank Bhd (supra). d. The Appellant's decision carries with it a substantial financial impact on the Respondent; as such, the Respondent has a legitimate expectation to be furnished with the reasons for the Decision and also an opportunity to make representation. There is an inference of no good reasons that can be drawn upon the Decision made by the Appellant as it is clear that the circumstances in the Respondent's application warrant reasons to be furnished. e. As a result of the Appellant's failure to furnish reasons, the Respondent was unable to rebut, rectify and contradict the evidence that was made against him. As such, the Appellant has denied the Respondent the right to be heard (see Majlis Bandaraya Pulau Pinang v Datin Noorzaina Mat Zain & Anor [2019] 4 CLJ 36). [54] In addition to the same reasons as stated above, the learned High Court Judge in Appeal 160 also made the following findings; a. that the Appellant has no legal and factual basis to impose a total additional income tax of RM11.465,856.06 for the said impugned Year of Assessment on the Respondent and that a public authority such as the Appellant has no jurisdiction to commit an error of law, and that such an error would give rise to a clear lack of jurisdiction such that the Decision would be vulnerable judicial review. b. In arriving at its Decision in the form of Notice of Additional Assessment for the Year of Assessment 2014 all dated 31.12.2019 for notice of additional assessment for the year of assessment ("YA") 2014 dated 31.12.2019 for RM 11,465,856.06, the Appellant had clearly rescinded its own finding, including its own computation, as stated in its letter dated 3.7.2019. Further, the Appellant provided no valid justification or reasons for its revocation. Thus, His Lordship found that the Appellant should not act arbitrarily by revoking its own findings, including its own computation, and subsequently make the impugned Decision without any justification. Such actions on the part of the Respondent are made with a clear lack of jurisdiction. c. Since, the Appellant had decided and had accepted the Respondent's voluntary disclosure on 3.7.2019 and asked for payment of the sum of RM250,458.74 in accordance with the Respondent's disclosure under the SVPD, thus, there is no legal basis or jurisdiction for the Appellant to subsequently revoke its own determination, including its own computation as stated in its letter dated 3.7.2019. There is legitimate expectation on the SVDP on the Respondent's part that the Appellant's decision and acceptance is final and conclusive. The denial of legitimate expectations that have properly arisen would be oppressive and an abuse of power. In such circumstances, the Appellant had acted without jurisdiction. THE APPEALS BEFORE US [55] For Appeals 158,159,and 160,the Memorandums of Appeal represent similar grounds as follows: i. The Learned Judge had factually and legally failed to adopt the legal principles outlined by the Supreme Court in Government of Malaysia & Anor v. Jagdis Singh [1987] 2 MLJ 187, Ta Wu Realty Sdn Bhd v. Ketua Pengarah Hasil Dalam Negeri [2009] 1 MLJ 555 and recent case of Federal Court in Bintulu Lumber Development Sdn Bhd v Ketua Pengarah Hasil Dalam Negeri (Rayuan Civil No. 01(f)-28- 10/2019(Q) which held that when there exists alternative remedy provided under the law, the Respondent must show exceptional circumstances to justify the Judicial Review Application against the Ketua Pengarah Hasil Dalam Negeri. ii. The Learned Judge had erred in fact and law in allowing the Respondent's application for Judicial Review against the Ketua Pengarah Hasil Dalam Negeri when there were no exceptional circumstances to justify the decision. iii. The Learned Judge had erred in law after failing to consider the relevant cases regarding Judicial Review in tax cases as was decided by the Federal Court in Ketua Pengarah Hasil Dalam Negeri v Alcatel-Lucent Malaysia Sdn Bhd [2017] 2 CLJ 1. iv. The learned Judge had erred in law and facts after failing to consider that whether the gains from disposal of shares should be subjected to Income Tax Act 1967 or Real Property Gain Tax Act 1976 does not form exceptional circumstances and it goes to the merits of the assessment and should be dealt by the Special Commissioners of Income Tax as was decided by the Court of Appeal in Ta Wu Realty Sdn Bhd v. Ketua Pengarah Hasil Dalam Negeri [2009] 1 MLJ 555. v. The Learned Judge had erred in law and in fact in failing to consider the decision in the case of Ketua Pengarah Hasil Dalam Negeri v. Mudah. my Sdn Bhd [2017] 2 MLJ 197 where when the merits of an application for judicial review involve disputes of fact, it should go before the tribunal i.e. Special Commissioners of Income Tax which is established under the Income Tax Act 1967. vi. The Learned Judge had erred in law and fact after failing to consider the fact that the Respondent had filed an appeal to the Special Commissioners of Income Tax through the Form Q under Section 99 of the Income Tax Act 1967 and since the Respondent had filed an appeal to the Special Commissioners of Income Tax, it is an abuse of the court process to maintain the application for judicial review as was decided in the case of Keysight Technologies Malaysia Sdn Bhd v. Ketua Pengarah Hasil Dalam Negeri Malaysia [2018] MLJU 66. [56] Though there are 6 grounds of appeal stated in the Memorandum of Appeal, for the purpose of these 3 appeals, the Appellant is raising a preliminary point towards the learned High Court Judge's decision on 3 issues; i. Availability of alternative remedy of appeal under Section 99 of the ITA 1967; ii. The Respondents' application involved questions of fact; and iii. The Respondents had failed to prove exceptional circumstances warranting the grant of certiorari. ANALYSIS AND FINDINGS ISSUE 1 - AVAILABILITY OF ALTERNATIVE REMEDY OF APPEAL UNDER SECTION 99 OF THE ITA 1967. WHETHER THE JUDICIAL REVIEW APPLICATION OVERCOMES THE AVAILABLE STATUTORY APPEAL PROCEDURE. [57] Section 99 of the ITA 1967 provides that a person aggrieved by the assessment of the Director General of Income Tax ("DGIR") may appeal to the Special Commissioners of the Income Tax ("SCIT") and therein further provision to appeal from the deciding order of the SCIT to the High Court pursuant to para 34 of Schedule 5 of the ITA 1967. Section 99 here provides a remedy of appeal to any taxpayer who is aggrieved by an assessment by way of filing an appeal to the Special Commissioners of Income Tax. Section 99 reads: "Right of appeal

(1) A person aggrieved by an assessment made in respect of him may appeal to the Special Commissioners against the assessment by giving to the Director General within thirty days after the service of the notice of assessment made under section 92, within the first three months of the year of assessment following the year of assessment for which the assessment was made (or within such extended period as regards those days or months as may be allowed under section 100) a written notice of appeal in the prescribed form stating the grounds of appeal and containing such other particulars as any be required by that form". [58] The position of disallowing judicial review application where there is availability of domestic remedy has long been dealt with by the courts in Malaysia, and it is settled law. In the case of Government of Malaysia & Anor v Jagdis [1987] CLJ (Rep) 110, the judicial review application for certiorari to quash a notice of assessment raised under Section 91 of the ITA was dismissed by the Supreme Court. The court held that even though the discretion is still with the court to act by way of judicial review in revenue cases, certiorari will not normally be issued unless there is shown a clear lack of jurisdiction or blatant failure to perform some statutory duty or there is serious breach of principles of natural justice. Hashim Yeop Sani SCJ had reviewed a number of British cases in the said case and, in the course of it, agreed with them. His Lordship approvingly said at page 189- "A clear principle is reiterated here, i.e., it is not a rigid rule that whenever there is an appeal procedure available to the Appellant, he should be denied judicial review. Judicial review is always at the discretion of the court but where there is another avenue or remedy open to the Appellant, it will only be exercised in very exceptional circumstances. In Re Preston was a tax case. It was quite clear from the speeches of their Lordships of the House of Lords that the Inland Revenue Commissioners were not immune from the process of judicial review. But what was also made clear is that remedy by way of judicial review is not to be available where an alternative remedy exists except in very exceptional cases". (Emphasis added) [59] The decision of the above Supreme Court's case was followed by another Revenue case in Ta Wu Realty Sdn Bhd v Ketua Pengarah Hasil Dalam Negeri & Anor [2009] 1 MLJ 555. In the said case, the application for leave to commence judicial review for certiorari to quash a notice of assessment under the ITA was rejected by the Court of Appeal. The principle of Jagdis's case (supra) was cited as follows (at page 567); [21] The Supreme Court has in Jagdis Singh had held that the discretion is still with the courts to act by way of judicial review, but where there is an appeal procedure available to the Appellant, certiorari should not normally issue save in exceptional circumstances (see also R v Chief Constable of Merseyside Police, ex parte Calveley & Ors [1986] QB 424). [22] To repeat the guidelines of Jagdis Singh, the exceptional circumstances in the circumstances of this appeal required to be established by the appellant were that: i. the first respondent had a clear lack of jurisdiction; or ii. there was blatant failure by the first respondent to perform some statutory duty; or iii. There was a serious breach of the principles of natural justice." [60] The guiding principles enunciated in the above cases shall apply since both cases dealt specifically in revenue matters where an alternative remedy is available. We are of the view that courts should be reluctant to allow judicial review application or to grant leave to commence in revenue cases as the ITA has specifically provided the avenue for the aggrieved taxpayer to appeal against the Appellant's decision unless in very exceptional circumstances. [61] The Federal Court had in Ketua Pengarah Hasil Dalam Negeri v Alcatel-Lucent (M) Sdn Bhd & Anor [2017] 2 CLJ 1 decided on the issue of domestic remedy whereby Suriyadi Halim FCJ has commented at page 18 and 22:- [60] Had the respondents filed an appeal before the Special Commissioner, where the onus is on the respondents to establish their position, they will be accorded every opportunity to show where the appellant went wrong. The respondents may request for the attendance of witnesses to give evidence on oath and request any witness to produce any books, papers, or documents which is in his custody or his control necessary for the purpose of appeal. Therefore, before the Special Commissioners, the respondents will have all opportunity to undo what the appellant determined (see Director-General of Inland Revenue v Lahad Datu Timber Sdn Bhd [1978] 1 MLJ 203). [61] At the completion of the hearing of the appeal, the Special Commissioners shall give their decision in the form of an order known as a deciding order, and which in certain circumstances may be final. Either party to the proceedings before the Special Commissioners may appeal on a question of law against a deciding order or may request the Special Commissioners to state a case (generally known as case stated) for the opinion of the High Court. Any dissatisfied party may appeal only up to the Court of Appeal (Tio Chee Hing v United Overseas (Malaysia) Bhd [2013] 2 CLJ 910; Koperasi Jimat Cermat dan Pinjaman Keretapi Bhd v Kumar Gurusamy [2011] 3 CLJ 241; Ketua Pengarah Hasil Dalam Negeri v Syarikat Jasa Bumi (Woods) Sdn Bhd (Civil Application No.8-31-99(S) (Unreported). [62] By filing an appeal before the Special Commissioners, the respondents would have had the opportunity to challenge the decision of the appellant as to whether the payments were indeed royalty. [63] By circumventing the Special Commissioners from resolving these issues and unwittingly leaving the deeming provision unrebutted, the first respondent's payments to the second respondent are thus income derived from Malaysia. [81] The relevant question that must follow is, did the appellant make an assessment, i.e., carry out an official administrative act, when he ordered the first respondent to make payments of the withholding tax? Without a doubt, the answer is in the affirmative. That being so, with the imposition of withholding tax being an assessment, it is thus subject to the Special Commissioners under section 99." [62] Further, Zainun Ali FCJ, in her Ladyship's supporting judgment in the Alcatel-Lucent case (supra), has also held on the same note that: [127] A party who is dissatisfied with an assessment or administrative decision issued by the Revenue under section 109 or 109B is not left without any remedy. In the circumstance of this case, if it is dissatisfied with assessment or notice of the assessment issued by the appellant, the $ 1^{\mathrm{st}} $ Respondent ought to have exercised its right to appeal under section 99 of the Act. Before the Special Commissioners, the $ 1^{\mathrm{st}} $ Respondent would have an opportunity to make known its dissatisfaction. It will have the opportunity to tender exhibits and give evidence if necessary". (Emphasis added) [63] Ketua Pengarah Hasil dalam Negeri v Mudah.My Sdn Bhd [2017] 5 CLJ 283 had also decided the following: [22] The decision in Jagdis Singh thus laid down a lucid and an authoritative guiding principle enunciated by none other than the highest court of the land, which this court was bound to follow. Therefore. The principle remains a good law here that the way is open for this court to hold that the above case authorities should apply to the appeal before us, especially when these authorities deal specifically in revenue matters where an alternative and specific remedy is expressly provided under s.190H of Act 53. It is beyond question that this position is not an option but the law that ought to be complied with and applied to the instant application. [27] The respondent was not justified when it wrongly chose the court as a forum before which it could ventilate its grievances whilst there was in existence the specific remedy of appeal before the Special Commissioners of Income Tax...". [64] The Federal Court in Bintulu Lumber Development Sdn Bhd v Director General of Inland Revenue Rayuan Civil No. 01(f)-28 10/2019(Q) has strengthened the rule of law that when there is a domestic remedy available to a taxpayer under the statutory provision of the ITA, the Respondent must demonstrate "exceptional circumstances" before the court would intervene to review the decision-making process by the DGIR. Otherwise, the court would not intervene, and the taxpayer should challenge the notice of assessment before the SCIT. [65] In this present case, it is not disputed that the Respondents on 26.7.2019 (Appeal 158) and on 28.1.2020 (Appeal 159 and 160) had filed their Form Q under Section 99 of the ITA 1967. The Respondents were fully aware of their rights under the ITA 1967 and chose to submit their dissatisfaction with the Appellant's decision by filing the appeal before the SCIT. [66] Since the Respondents had exercised their rights to appeal under section 99 of the ITA 1967, the Respondents cannot now make a U-Turn to state that the filing of the judicial review was based on the question of law or even as an abundance of caution. Even if the Respondents claimed that it was a question of law, the Federal Court in Alcatel-Lucent (supra) has put in place the proper process for revenue matters to be dealt with by the parties i.e. either party to the proceedings before the Special Commissioners may appeal on a question of law against a deciding order or may request the Special Commissioners to state a case (generally known as case stated) for the opinion of the High Court. [67] The validity of otherwise of the impugned notice of assessment or the existence or otherwise of an error of law may be raised as an issue in the hearing of the Respondents' appeal before the SCIT under Section 99 as extensive provisions have been enacted from Sub-Sections 99 to 102 and Schedule 5 to the ITA which establish adequate machinery for the disposal of the Respondents' complaint by way of due process of law. [68] Additionally, the hearing of the Respondents' appeals before the SCIT is indeed an additional platform or forum for the Respondents to ventilate their views, in line with the fundamental rules of natural justice whereby the Respondents are given every opportunity to present their case in the tribunal of the first instance. [69] It is our respectful view that the Respondents, having decided to file the appeals before the SCIT, no longer have the option to enter into another forum to challenge the impugned notices of assessment. The court should not be influenced by the fact that the process by way of judicial review could be resorted to when the ITA had provided for a specific remedy in the form of an appeal process under Section 99 of the ITA. [70] The ITA has specifically provided comprehensive provisions on the right and procedure of appeal for the taxpayers to avail themselves to in the event they were aggrieved by the act of the Appellant. Parliament would not have enacted in vain without any real significance such comprehensive provisions on appeal. It is income tax legislation that allows any person aggrieved by an assessment to appeal before a body that is dedicated specifically to hear such appeals. It would indeed be an exercise in futility to create such a mechanism of appeal if it is not to be complied with. [71] The present case is a perfect example of a disagreement or dispute over facts and interpretation of law and how taxation or assessment should be done. The Respondent has the statutory right of appeal envisaged under the ITA 1967. To ignore the specific appeal machinery under ITA 1967 and replace it with judicial review when there are no exceptional circumstances goes against the intention of Parliament in providing the appeal provisions under the Act and would render the Act of the Parliament to be in vain. Since the Respondents have filed an appeal to the SCIT under Section 99 of the Act, it is our considered view that it is an abuse of the court process to maintain the judicial review application. ISSUE 2: WHETHER THE RESPONDENTS' APPLICATIONS INVOLVED QUESTIONS OF FACT [72] The Appellant contends that the Additional Assessment was raised on the Respondents through the Appellant's Affidavit in Reply and Additional Affidavit in Reply. The Appellant had in-depth explained in the Affidavit in reply how the Additional Assessment came about. The Appellant further submits that the land transaction held between the Respondents and Quality Avenue Sdn Bhd pursuant to the Share Sale Agreement amounts to an adventure in the nature of trade/badges of trade and therefore falls under Section 4(a) of the ITA 1967. The Appellant further submits that the issue of whether gains from disposal are taxable under or subjected to ITA 1967 or RPGTA 1976 is not an error of law. It goes to the merits of the assessment, which ought to have been dealt with by the SCIT as has been decided by the Court of Appeal in Ta Wu Realty (supra). [73] It is trite law that a Judicial review is a court proceeding where a challenge is made on the decision of the relevant authority or entity, i.e., by challenging the lawfulness of the decision-making process. Generally, the court, when dealing with the judicial review application in a supervisory capacity, is not to delve into the merit of the case. In other words, the evidence is not reassessed. The court is merely to quash the decision of the relevant authority, if need be, and not to substitute with what it thinks is the correct decision. The Court is not to usurp the powers of the designated authority (see Alcatel-Lucent case, supra). [74] In the present case, to state that impugned Form J is invalid, void and that it contains an error of law on the face of that Form J is a question pertaining to the merits of the assessment which in our opinion, a matter better reserved for the SCIT or a matter to be transmitted as a case stated to the High Court for determination. [75] The Decision itself is centered on the dispute of facts. In determining whether there is an intention to trade, one must look at the totality of facts surrounding the disposal and is guided by the elements of "badges or trade" as has been decided by apex courts in many cases. The question of whether a disposal is taxable under or subjected to ITA 1967 or RPGTA requires the determination of whether there is an intention to trade and will depend on the totality of facts of the case. The establishment of facts and onus is on the Respondents. Hence, the right forum to hear the matter is the SCIT as judges of facts. [76] Cases relied on by the Respondent, i.e., Alf Properties, Lower-Perak Co-Operative Housing, and Hypergrowth Sdn Bhd were all cases which had gone through the correct process of appeal by way of domestic appeal to SCIT and decision was made in that case by SCIT by looking at the totality of facts surrounding the disposal and guided by elements of badges of trade. [77] The Respondents contended that the issue before the High Court was not a question of fact but a question of law and kept arguing that the Appellant had failed to state its reasons in raising the Additional Assessment, where in fact, no such statutory duty existed in the first place upon the Appellant. [78] The Respondents further argued that Form J should not have been issued in the first place as it was wrong in law. Assuming that the Respondents' allegation was true, the failure of the Appellant to state its reasons for raising the Additional Assessment also falls within the four corners of a question of fact and law. It is within the purview of the SCIT as judges of facts to determine whether there is an intention to trade or not based on the surrounding circumstances of the case. [79] It is also pertinent to note that the Respondent in Appeal 160 had raised several provisions of the Operational Guidelines No.1/2019 ("the Operational Guidelines"), Special Program for Voluntary Disclosure ("SVDP"), and the impugned letters issued by the Appellant. The Respondents argued that the Appellant has breached several provisions of the Guidelines and SVDP. The Respondent's sole contention is that the Appellant has failed to give reasons for rejecting the SVDP, whereas there was no duty on the Appellant to do so. It is our considered view that the interpretation and applicability of the provisions are questions of fact. It is our respectful view that the issue, whether it was properly raised or without reason given, falls under a question of fact, and again, it needs to be proven before the SCIT. Based on the facts of the case, we opined that the issues involved are not purely of law but mixed facts and law, which ought to have been decided by the SCIT and not in a judicial review application. [80] Hence, without the Respondents' appeal being heard at the Special Commissioners of Income Tax, the fact that was enlisted by the Appellant in the Appellant's Affidavit in Reply and Appellant's Additional Affidavit in Reply remains unrebutted and unchallenged. It is pertinent to note that all the contentions involved degrees of facts, and the right forum would be of the SCIT. The Respondents, in their Affidavit in Reply, merely denied the statements in the Appellant's Affidavit in Reply and Additional Affidavit in Reply without its veracity being tested before the SCIT. ISSUE 3: THE RESPONDENTS HAD FAILED TO PROVE EXCEPTIONAL CIRCUMSTANCES WARRANTING THE GRANT OF CERTIORARI [81] Applying the principle laid down in the Jagdis Singh case, remedy by way of judicial review is not to be available where an alternative remedy exists, except in very exceptional cases. In this instant case, the Respondent must show "very exceptional circumstances" that warrant certiorari. [82] In Iskandar Coast Sdn Bhd v Ketua Pengarah Hasil Dalam Negeri [2019] 5 MLJ 236, His Lordship Abdul Rahman Sebli, JCA (now the Rt Hon. Chief Judge of Sabah & Sarawak) had defined "exceptional" as- [17] Exceptional means unusual; not typical": see Concise Oxford English Dictionary 11th Edition. Very exceptional circumstances, therefore, means very unusual circumstances. What amounts to very exceptional must depend on the factual matrix of each case." [83] The only dispute raised by the Appellant in the judicial review application is the failure of the Appellant to provide reasons for raising the additional assessment. Therefore, the impugned Decision ought to be quashed on the grounds of illegality, irrationality, or unreasonableness. A certiorari application will not normally be granted unless the Respondents can show that there is a clear lack of jurisdiction, blatant failure to perform some statutory duty or there is a serious breach of the principle of natural justice by the Appellant as decided in Jagdis Singh (supra). [84] The Appellant contended that the Additional Assessment was raised under Section 91(1) of the ITA 1967, which provides for' the Appellant to raise additional assessment within 5 years when it appears to the Appellant that no sufficient assessment had been raised on the Respondents. The Appellant is also empowered to raise additional assessments when it appears that no or no sufficient assessment has been made on the Respondents based on Section 91(1) of the ITA 1967, which states: "Assessments and additional assessments in certain cases

(1) The Director General, where for any year of assessment is appears to him that no or no sufficient assessment has been made on a person chargeable to tax, may in that year or within five years after its expiration make an assessment or additional assessment, as the case may be, in respect of that person in the amount or additional amount of chargeable income and tax or in the additional amount of tax in which, according to the best of the Director General's judgment, the assessment with respect to that person ought to have been made for that year" [85] The Appellant further submitted that the reason the Additional Assessment was raised was because it appears to be no or not sufficient tax that had been raised on the Respondents since the Respondents had failed to declare the disposal of shares to the Appellant be it in the prescribed Form 1B or in the Respondents' Tax returns for the Year of Assessment 2014. [86] The Additional Assessment arises pursuant to the disposal of the said land vide the sale of shares by the Respondents in Acelite Development and Solid Continental to Quality Avenue pursuant to the Share Sale Agreement dated 13.5.2014. To the Appellant, the disposal of the said land is taxable under Section 4(a) of the ITA 1967 as it amounts to adventure of nature of trade/badges of trade; thus, the Additional Assessment was raised on the Respondents. The arguments and allegations raised by the Respondents are premised on the decision made by the Appellant after the audit review and the Appellant had taken into account all the relevant provisions and considered the facts and circumstances of the case before issuing the notices on the Respondents. Hence, by virtue of Section 91(1) of the ITA 1967, we find that the Appellant is well within the statutory authority to raise the Additional Assessment and had acted in accordance with the law. Appellant Is Duty Bound To Give Reason For Its Decision [87] The Respondents' primary issue raised before the learned High Court Judge was whether the Appellant, as a public office, was under the obligation to provide reasons for its decision. The Respondents in Appeals 158 and 159 complained that the Appellant failed to provide any reason for its decision to raise the Additional Assessment. The Respondent had filed the income tax return for the YA 2014 on 16.6.2015 and paid the income tax amounting to RM73,386.00. The Respondent believes that he had no outstanding tax owed to the Appellant and neither was the Respondent under any tax audit or tax investigation. Aside from that, the Respondent also averred that he was not in the business trading shares and did not have any means, knowledge or expertise in share trading. All of a sudden, the Appellant issued a Notice of Assessment for the YA 2014 dated 28.6.2019 for the sum of RM1,868,186.84 ("1st impugned Assessment") without any prior warning, notice, or explanation as to the reason, basis, and/or transaction for which the 1st Impugned Assessment was allegedly raised. [88] Further, on 20.10.2019, the Respondent issued a letter to the Appellant denying having received an original copy of the Appellant's letter backdated to 10.7.2019. Subsequently, the Appellant issued a letter stating that the gains from the disposal of shares should be subject to income tax. Thereafter, on 21.12.2019, the Appellant issued a letter together with the impugned Notice of Additional Assessment for YA 2014 to RM4,952,993.76 (" $ 2 ^{nd} $ Impugned Assessment"). The failure of the Appellant to provide any valid reason for its Decision had improperly exercised its statutory authority and acted arbitrarily in arriving at its decision. [89] As a result of the Appellant's failure to furnish reasons for its Decision, the Respondents complained that the Appellant had denied the Respondents the right to be heard and failed to comply with the principles of procedural fairness. [90] As for the Respondent (Yeo Siew Hee), it is not disputed that the Respondent disposed of the Shares to Quality Avenue Sdn Bhd on 13.5.2014. The Appellant issued a letter dated 7.9.2016, stating that the disposal of Shares is not subject to tax under the RPGT Act 1976. On 28.6.2019, the Respondent submitted Surat Akujanji ("Undertaking Letter") to the Appellant for the YAs 2012 to 2017. The Respondent accepted the Applicant's Undertaking Letter on 3.7.2019 and requested for the payment of the sum of RM 250,458.74 in accordance to the Applicant's disclosure under the SVDP. To the Respondent's surprise, the Appellant, on 10.7.2019, issued a letter alleging that the proceeds from the disposal of the Shares are subject to income tax. The Appellant, on 31.12.2019, issued a letter stating that the Respondent's disclosure under the SVDP cannot be considered and arrived at its Decision by raising the impugned Form JA for the YA 2014 for additional assessment amounting to RM11,465,85606. [91] The Respondent contended that his voluntary disclosure in the Undertaking Letter under the SVDP was accepted by the Appellant by its letter dated 3.7.2019. The Appellant then revoked its acceptance, findings and computation in its letter dated 3.7.2019. The Respondent averred that there is no legal or valid reason for such revocation. [92] Further, the Respondents submitted that the conduct of the Appellant has raised a legitimate expectation to the Respondents that the earlier decisions by the Appellant were final and conclusive and, therefore, the Appellant is estopped from issuing further additional assessments without any justification. The Appellant cannot exercise its power arbitrarily. [93] Again, we reiterate that Section 91(1) of the ITA empowers the DGIR to make assessment and additional assessment for any year of assessment where it appears to him that no or no sufficient assessment has been made on a person chargeable to tax, in the amount or additional amount of chargeable income and tax or in the additional amount of tax in which, according to the best of the Director General's judgment, the assessment with respect to that person ought to have been made for that year. [94] Having perused the Appellant Affidavit in Reply and Additional Affidavit in Reply in the judicial review application, we note that the Appellant had eloquently explained the reasons on why the Appellant raised the Additional Assessment on the Respondents in which Additional Assessment was raised after the disposal of the said land vide the sale of shares by the Respondents in Acelite Development and Solid Continental to Quality Avenue that was carried out pursuant to a Share Sale Agreement dated 13.5.2014. In fact, the Respondents did not declare the disposal made to the Appellant via filing Form 1B nor in the Respondents' tax returns for the Year of Assessment 2014. Instead, the Respondents had merely wrote to the Appellant on 8.8.2014 regarding the disposal of the shares in Acelite Development and Solid Continental. [95] We also observed that the Respondents did not reply or rebut what has been said by the Appellant regarding the reasons for raising the additional assessment on the Respondents. [96] The impugned Notice of Additional Assessment was raised under Section 91(1) of the ITA 1967, whereby nowhere does it state expressly nor impliedly that any particulars, reasons, or justifications needed to be given with the notice of assessment or before the notice of assessment were issued out to the Respondents by the Appellant. The only provision that requires the Appellant to give reason for the assessment raised is Section 140(5) of the ITA. The Respondents' case here is not related to Section 140 of the ITA 1967. [97] It is abundantly clear that Section 91(1) of the ITA does not require the Appellant to provide reasons for raising additional assessments on the Respondents. The Appellant's power to raise assessment and additional assessments under Section 91(1) of the ITA can be described in MR Properties Sdn Bhd V Ketua Pengarah Hasil Dalam Negeri [2005] 7 MLJ 260, Raus Sharif J (as he then was) held that: "(2) The respondent was not precluded from raising the assessment under ITA after reviewing the earlier assessment made under the RPGT. The respondent was empowered to review or revise an assessment. This power would include vacating an assessment on the ground that no real property gain tax was payable on the gains. Thus, where an assessment for RPGT was made and subsequently, it was discovered that there was no chargeable gain within the meaning of the RPGT and thus no real property gain tax is payable, the respondent can and must discharge the assessment. In the instant case, the respondent, after imposing tax on the appellant under RPGT, discovered that the sale of the subject lands should be subjected to ITA and informed the appellant accordingly. Thus, the assessment to income tax by the respondent was not in law null and void (see para 14)." The law is clear that the Appellant here is not required under the ITA to give reasons for raising the additional assessment toward the Respondents. (Alcatel-Lucent case) and in fact, it is its statutory duty to give a correct assessment of tax. [98] We agree with the learned counsel for the Appellant's submission that the Federal Court in Alcatel-Lucent (supra) had held that the Appellant's action in not giving reasons did not render the decisionmaking process illegal. In fact, the Appellant is not statutorily bound to provide reasons for its Decision in raising the Additional Assessment. The relevant grounds by the Federal Court at pages 586-588 are produced hereunder for ease of reference: [87] The Court of Appeal criticized the appellant for not providing reasons for its decisions to the respondents, and opined that such failure to be open, the court could conclude that the Appellant had no good reasons in making the impugned decision. This strong view came about after the Court of Appeal had referred to the decision of Pahang Omnibus Co. Bhd v Minister of Labour and Manpower & Anor (1981) 2 MLJ 199 which endorsed Lord Denning MR's remarks in General Electric Co Ltd v Price Commission (1975) 1 ICR 1. Lord Denning MR opined: "If the decision making body comes to its decision on no evidence or comes to an unreasonable finding so unreasonable that a reasonable person would not come to it then again the courts will interfere ... If it gives no reasons in a case when it may be reasonably be expected to do so, the courts may infer that it has no good reason for reaching its conclusion and act accordingly. [88] Having perused the above remarks, it is obvious that if the circumstances warrant it, and after having considered all the relevant factors, judicial interference is permissible. Putting aside the obvious that Malaysia suffers different challenges due to its complex populace, enforcing a blanket view that silence by a decision maker implies lack of good reasons may be too strong a stance and must be treated with considerable reserve. [89] For purposes of this appeal, the case of Stefan v General Medical Council (1999) 1 WLR 1293 and A.B.C v The Comptroller of Income Tax, Singapore (supra) are of great help. Lord Clude in Stefan v General Medical Council had occasion to state: "The trend of the law has been towards an increased recognition of the duty upon decision-makers of many kinds to give reasons. This trend is consistent with current development towards an increased openness in matters of government and administration." But the trend is proceeding on a case-by-case basis ... and has not lost sight of the established position of the common law that there is no general duty, universally imposed on all decision makers (Emphasis added) [99] The learned High Court Judge at paragraph 29 of His Lordship's Grounds of Judgment makes a finding that the Appellant is not compelled to give reasons for the Decision on every occasion, but reasons should be given where the circumstances warrant it. Further, in paragraph 33 of the same Grounds of Judgment, the learned High Court Judge also stated that the mere fact that Section 91 of the ITA did not require reasons to be given does not exempt the Appellant from such duty. Be as it may, the requirement of giving reason is not provided under the ITA, specifically under Section 99(1) and in the absence of any reason given by the Appellant, it does not render the Decision invalid, illegal, or void in nature. Without establishing a specific provision under the statute that proves the Appellant owes a statutory duty to the Respondent, the Respondent had failed to prove that the Appellant had breached any statutory duty to give reasons for its decision. [100] It is the statutory duty of the Appellant under s.91(1) of the ITA to raise the Additional Assessment. The continued correspondence between the Appellant and Respondents proved that the Respondents were informed about the tax assessment before the Appellant finalized the decision to raise the tax assessment on the Respondent. The Notice of Additional Assessment raised is correct and legally binding. The Respondents, in fact, had filed an appeal by way of Form Q to question the Notice of Assessment. [101] The Taxpayer is presumed to be generally acquainted with his own affairs and should be able to discharge the burden of proving that the assessments were wrong as all facts are within the Taxpayer's knowledge (see ABC V CIT, Singapore [1959] 2 MLJ 162). Following the decision in ABC (supra), the Federal Court in Alcatel-Lucent (supra) had decided that judicial interference on this point, therefore should be on a case-by-case basis. [102] The Respondents relied heavily on the decision of Kesatuan Pekerja-Pekerja Bukan Eksekutif Maybank Bhd v Kesatuan Kebangsaan Pekerja-Pekerja Bank & Anor (supra) on the duty to give reason. We are of the considered view that Kesatuan Pekerja-Pekerja Bukan Eksekutif Maybank Bhd (supra) can be distinguished from the present case before us. Kesatuan Pekerja-Pekerja case did not decide on a tax matter, whereas in the present case, there had existed decisions regarding the duty to give reasons in tax cases. [103] The arguments and allegations raised by the Respondent are premised on the decision made by the Appellant after the audit review. The Appellant had taken into account all the relevant provisions, considered the facts and circumstances of the case, and had acted in accordance to the law. [104] In reference to the above, what is disputed by the Respondents is the absence of reasons from the Appellant in raising the Additional Assessment and just because the Respondents are disputing the said assessment, it does not make it exceptional circumstances or very exceptional circumstances. [105] In the case before us, there are no defects in jurisdiction and no breach of natural justice. If remedy of declaration is sought by the Respondent, the same should not be granted as there is no very exceptional case to warrant such a declaration. Right To Be Heard And Procedural Fairness [106] The Respondents complained that as a result of the Respondent's failure to furnish reasons for its Decision, the Appellant had denied the Respondents the right to be heard and failed to comply with the principles of procedural fairness. [107] It is our respectful view that the Respondents' complaints are without basis. Section 99 of the ITA provides the right of appeal to the Special Commissioners of the Income Tax by filing Form Q. The Respondents had, in fact, filed Form Q, and Form Q is still not being heard until today pending the outcome of the Respondents' appeal before us. [108] There is no breach of procedural fairness. The Respondents will be given ample opportunity to explain and prove on substance that the Additional Assessments raised were factually and legally wrong. Without the matter being reverted to the SCIT, who is the judge of fact in tax matters, the legality and correctness of the additional assessment remain intact. We find that the findings by the learned High Court Judge that the right to be heard should be accorded to the Respondents by the Appellant as a public decision-maker and not at SCIT is misplaced. Legitimate Expectation [109] The Respondents contended that there is an abuse of power on the Appellant by denying their legitimate expectation, which has properly arisen, would be unduly oppressive and an abuse of power. [110] The voluntary disclosure made by the Respondents cannot be said to be final and conclusive especially when audit and investigation both have been initiated on the Respondents even before the voluntary disclosure made and paragraph 5.3.4 is very clear to state that the SVDP can apply to cases which are already under audit and investigation but the voluntary disclosure will be subjected to the findings of the audit and investigation done. [111] Paragraph 5.9 of the Operational Guideline clearly stated that the voluntary disclosure made will be checked on the accuracy of reporting. The Appellant found that the voluntary disclosure made that the taxable income on the gains from disposal of Respondents' shares in Acelite Development Sdn Bhd and Solid Continental Sdn Bhd are RM0.00 was incorrect and inaccurate and that the Respondents had come to the SVDP with unclean hands. The rejection of the SVDP by the Appellant was not an afterthought but rather a correct application of the law, especially considering there was an audit conducted prior to the SVDP. The subsequent audit/investigation referred to was not conducted after the SVDP but was based on findings from audits conducted before the voluntary disclosure. Therefore, it does not indicate a lack of good faith in accepting the disclosure but rather a thorough examination of the Respondent's affairs. In our view, the learned High Court Judge has erred in his Lordship's decision to decide that the Appellant's reliance on Paragraph 5.10 of the Operational Guidelines applies to a situation where no audit has been carried out, is an afterthought and/or without basis. [112] Added to that, the Appellant's acceptance of the voluntary disclosure and subsequent payment demanded by the Applicant does not preclude the Respondent from revisiting its determination, especially if new information or circumstances arise. Therefore, the subsequent decision to revoke its determination is within the Appellant's authority and jurisdiction. [113] We agree with the Appellant's counsel submission that the issue of legitimate does not apply in the instant case as the Appellant is carrying out its responsibility under the Act when issuing the notice as decided by the High Court in Dalat School Sdn Bhd v. Ketua Pengarah Hasil Dalam Negeri [Rayuan Civil No.16-3-2005] at pages 15-16: "The issue of legitimate expectation does not arise in this case as the DGIR was just carrying his duties as provided for under the Act. The DGIR is statutorily empowered to raise additional assessments where it appears to him that no sufficient assessment has been made on a person chargeable to tax...". [114] Further, the Court of Appeal in Hotel Sentral (JB)Sdn Bhd v Pengarah Tanah Dan Galian Negeri Johor, Malaysia & Ors [2017] 6 CLJ, 161 held that; [27] The general rule appears to be doctrine of estoppel and legitimate expectation is not ordinarily available against the Government nor is the Government bound by any representation which may have been made expressly or by conduct which if needed to be acted upon would invoke a breach of statute." CONCLUSION [115] In conclusion, having perused the entire Records of Appeal and submission by the parties, we are of the considered view that the Appellant has merit in the appeals on the following grounds; i. The Respondent must exhaust the statutory appeal process as no exceptional circumstances existed or are being proven by the Respondents and thus avail themselves to the appeal filed by them through Form Q. ii. The dispute was over the decision of the Appellant to issue the Notice of Assessment for YA 2014, for which the Respondents' remedy lies in appealing to the SCIT in accordance with Section 99 of the ITA. That would be the proper avenue for the Respondent to challenge the decision of the Appellant. iii. The case involves mixed question of fact and law which requires determination of fact through examination of witnesses before the SCIT, and the SCIT is the right forum to determine the questions of fact and decide on the merit of the Additional Assessment; iv. The failure of the Respondent to bring the appeal before the SCIT renders the facts and conclusions by the Appellant on the Respondents' additional assessment for YA 2014 are unrebutted and unchallenged, which formed the decision of the Appellant unassailable; v. Just because the Respondents do not agree with the Appellant's decision and the assessment made against the Respondent, it does not make the Appellant's decision-making process tainted to warrant a judicial review. vi. The judicial review application filed before the High Court is an abuse of the process of the court. vii. The Appellant does not have a statutory duty to provide reasons for raising the Additional Assessment towards the Respondents based on the decision of Alcatel-Lucent and A.B.C. v The Comptroller of Income Tax [1959] 1 MLJ 162. viii. The Appellant was correct in raising the tax under the ITA 1967 for the gains or profits from the disposal of land vide the sale of shares by the Respondents to Quality Avenue. ix. No issue of lack of jurisdiction when the Appellant decided to raise an assessment on the disposal of Shares under the ITA 1967 and not the RPGTA 1976. The Appellant had acted within his jurisdiction and had not occasioned any breach of statutory duty or natural justice. Thus, the Respondents had failed to discharge the burden of proving exceptional circumstances existed. Therefore, no issue of legitimate expectation exists in the Respondents' case. x. The Appellant had taken into account all the relevant provisions, considered the facts and circumstances of the case, and had acted correctly within the parameters of the law in raising the Additional Assessment on the Respondents. [116] In the light of this Court's above findings, we find that the learned High Court Judge has erred in fact and law in granting the Respondents' judicial review application in Appeals 158,159, and 160. There is an error in the High Court's decision that warrants our appellate intervention. Our Decision [117] We, therefore, unanimously allow the Appellant's appeals in Appeals 158,159,and 160. We ordered no costs, and the High Court's decisions dated 24.2.2021 are hereby set aside. Dated this: 14 Mac 2025. MARIANA BINTI HAJI YAHYA Judge Court of Appeal Malaysia PUTRAJAYA Counsel (s): For the Appellant Ahmad Isyak Mohd Hassan together with Mohamad Asyraf Bin Zakaria. Special Appeal Division, Legal Department, Ibu Pejabat LHDN Cyberjaya, Selangor. For the Respondents Sim Hui Chuang together with Lim Lip Sze and Wilian Yeo. Messrs. JM Lim & Co Advocates, Jalan Petanak, Kuching, Sarawak.