The Tax Appeal Tribunal (TAT), South East Zone, sitting in Enugu has set aside a N36 million demand notice issued against ACCION Microfinance Bank by the Anambra State Internal Revenue Service (AIRS).
In its Judgement on Appeal No: TAT/SEZ/ 001/2023 between ACCION Microfinance Bank and AIRS, the Tribunal overturned the N36 million “Best of Judgement Assessment” imposed on the bank for alleged non-compliance with sections 49 of the Personal Income Tax Act (PITA) regarding the filing of customers’ returns.
The bank, represented by Dr. Nnaemeka Amadi, a law lecturer at Godfrey Okoye University, had appealed the assessment, contesting its validity. Amadi argued that liability for non-compliance with section 49 of PITA did not constitute a tax liability accruable to AIRS upon which an assessment could be made.
He further contended that before the amendment introduced by the Finance Act 2021, non-compliance with section 49 attracted a fine payable upon conviction, rather than a tax assessment, during the period of 2016 to 2021 covered by the assessment.
In its judgement, the Tribunal chairman, Hon. Chukwuemeka Eze, agreed with the appellant’s counsel, setting aside the N36 million assessment. The Tribunal held that banks act as agents of the tax authority, and any fines for their default under section 49 do not constitute a tax liability within the Tribunal’s jurisdiction but rather a criminal liability.
However, the Tribunal noted that section 25 of the Finance Act 2021 has amended section 49 of PITA, removing the criminal liability and replacing it with a civil penalty. Consequently, the Tribunal imposed a N1 million penalty on the bank for its default in 2022 under the amended provision.
