KUALA LUMPUR (Oct 13): The government through the Inland Revenue Board (IRB) last month filed an application to strike out Tan Sri Muhammad Shafee Abdullah's counterclaim over a suit filed by the IRB over the notices of additional assessment (NOAAs) against the prominent lawyer for receiving RM9.5 million revenue from former prime minister Datuk Seri Najib Razak.
The IRB filed the application on Sept 28, claiming that Shafee's counterclaim is an abuse of the court process and did not disclose any reasonable cause of action.
The application was filed under Order 18, Rule 19 of the Rules of Court 2012, according to court documents sighted following a file search.
IRB control unit assistant director Shamsul Effendi Khamis, in an affidavit in support of the application, claimed that Shafee did not stipulate any cause of action.
'This is because the said counterclaim is filed with the purpose of disputing the tax assessment raised with basis, which is valid and proper, based on the Income Tax Act 1967. Any dispute as to the assessment of tax such as whether the tax is correct, excessive or not valid should be heard before the Special Commissioners of Income Tax (SCIT).
“The defendant (Shafee) has in fact filed a notice of appeal to the SCIT by filing Form Q against the tax raised and supposedly, all allegations in his counterclaim should be proven before the SCIT,” Shamsul said.
He added that Shafee had a clear forum to hear and prove his appeal over the tax assessment, while the filing of his counterclaim is an abuse of the court's process and would only waste time of all parties.
Shafee filed his defence and counterclaim in August, when he vehemently denied the IRB's claim relating to the NOAAs for the years 2011 to 2016, and said it was inaccurate, unlawful and tainted with mala fide.
The senior lawyer added that he had submitted a revised capital statement as final consideration.
"The defendant's explanation and comparison are made between the capital statement raised by the IRB dated May 30, 2019 and my capital statement dated May 23, 2019," Shafee said in his defence.
He further claimed that the IRB's NOAAs for 2011 and 2012 were time-barred, and that the sum of RM9.5 million he allegedly received from Najib in 2013 was paid for.
"The loan/advance initially received from Najib was unreasonably recognised by the IRB as income for the year of assessment 2013. However, the income of RM9.5 million should be only recognised in the year of Assessment 2018," Shafee said in his defence.
Besides the striking out of Shafee's counterclaim, the IRB wants a summary judgement to be entered on the senior counsel.
The IRB claimed that Shafee did not have a defence against the tax claim and therefore a full trial is not needed.
Shamsul also claimed in an affidavit in support of the summary judgement application that Shafee did not stipulate any cause of action.
The IRB filed the main suit against the senior lawyer in May, saying it sent additional assessment notices to Shafee's Bukit Tunku address between May 27 and May 30, 2019 for the amounts of RM621,191.85 (2011), RM978,854.11 (2012), RM3.58 million (2013), RM1.74 million (2014) and RM1.83 million (2016), but they remained unpaid.
The income tax suit is fixed for case management before High Court deputy registrar Syeela Marlina Uttaman on Nov 5.