LAM KAM WING v KETUA PENGARAH HASIL DALAM NEGERI

q-01a-461-06-2022 Court of Appeal (Mahkamah Rayuan) 22 May 2025 • Q-01(A)-461-06/2022 • 28 min read

5 cases cited (0 SG, 5 foreign)

Catchwords

The appellant challenged the High Court’s decision affirming SCIT’s dismissal of his appeal on additional tax assessments for YA 2011 and 2012. Issue 1: Taxability of Allowances – The appellant claimed his allowances were tax-exempt under the Income Tax (Exemption) Order 2009 – However, he held 30% of the company’s shares—the largest among nine shareholders – The court agreed with the SCIT that he had "control" under Section 139 ITA 1967, disqualifying him from the exemption – Appeal on this ground was dismissed. Issue 2: Penalty Under Section 113(2) ITA 1967 – The appellant also contested a 45% penalty, arguing there was no intent to mislead and the issue involved legal interpretation – The court found his conduct was bona fide and the penalty excessive – The DG had discretion to reduce the penalty under Section 124(3), even without an admission of guilt – Penalty was set aside. Conclusion – Appeal on tax liability dismissed – Penalty under Section 113(2) ITA 1967 set aside.

Practice Areas

Judges (3)

Ahmad Zaidi bin Ibrahim Coram Alwi bin Abdul Wahab Coram Mohamed Zaini bin Mazlan Delivered

Counsel (5)

Battenberg & Talma Firm Ashrina binti Ramzan Ali Counsel Respondent Chew Peng Hui Counsel Appellant George Lim Counsel Appellant Surani binti Che Ismail Counsel Respondent

Parties (2)

Ketua Pengarah Hasil Dalam Negeri Respondent Lam Kam Wing Appellant

Case Significance

LAM KAM WING v KETUA PENGARAH HASIL DALAM NEGERI is a Court of Appeal (Mahkamah Rayuan) decision dated May 22, 2025 (citation: q-01a-461-06-2022). <p>A tax consultant holding 30% of his company's shares challenged additional tax assessments for 2011 and 2012, claiming his allowances were exempt under the Income Tax (Exemption) Order 2009. The Court of Appeal dismissed the appeal on taxability, finding the appellant had 'control' under s.139 ITA 1967 disqualifying him from the exemption, but set aside the 45% penalty under s.113(2) ITA 1967, finding his conduct was bona fide with no intent to deceive.</p> The panel comprised Ahmad Zaidi bin Ibrahim, Alwi bin Abdul Wahab and Mohamed Zaini bin Mazlan, with Mohamed Zaini bin Mazlan delivering the judgment. Counsel appearing: Ashrina binti Ramzan Ali (counsel for respondent), Chew Peng Hui (counsel for appellant), George Lim (counsel for appellant), Surani binti Che Ismail (counsel for respondent).

Key issues: The appellant challenged the High Court’s decision affirming SCIT’s dismissal of his appeal on additional tax assessments for YA 2011 and 2012..

Summary

A tax consultant holding 30% of his company's shares challenged additional tax assessments for 2011 and 2012, claiming his allowances were exempt under the Income Tax (Exemption) Order 2009. The Court of Appeal dismissed the appeal on taxability, finding the appellant had 'control' under s.139 ITA 1967 disqualifying him from the exemption, but set aside the 45% penalty under s.113(2) ITA 1967, finding his conduct was bona fide with no intent to deceive.

What was the outcome of LAM KAM WING v KETUA PENGARAH HASIL DALAM NEGERI?

<p>A tax consultant holding 30% of his company's shares challenged additional tax assessments for 2011 and 2012, claiming his allowances were exempt u...

Statutes Cited

Evidence Act 1950 (Cap 56)

s 103

Income Tax Act 1967 (Cap 53)

Cases Cited (5)

MY (5)

[1982] 1 MLJ 235 [2011] 9 MLJ 479 [2015] 5 CLJ 923 [2023] 6 CLJ 350 [2024] 2 CLJ 519