KUALA LUMPUR (May 26): The High Court on Monday granted Berjaya Group Bhd leave (permission) to challenge the additional assessment of RM428.04 million imposed by the Inland Revenue Board for the years 2018 to 2023. Berjaya Group is a wholly owned subsidiary of Berjaya Corp Bhd (KL:BJCORP).

Judge Alice Loke Yee Ching also granted an interim stay sought by Berjaya Group over the IRB’s decision dated July 30, 2025, to impose the additional assessment, pending the disposal of the judicial review.

She fixed June 16, 2026, for an inter partes stay application hearing.

Berjaya Group filed its judicial review application on Aug 19 last year, where it named the director general of the IRB as the sole respondent.

The company is seeking a certiorari order to quash the IRB’s decision to issue the notices of additional assessment for the years of assessment 2018 to 2023, dated July 30, 2025, on the grounds that the imposition of the RM428.04 million assessment is ultra vires the Income Tax Act (ITA), void, unlawful, made in excess of authority, irrational, and in breach of the company’s legitimate expectation.

Further, it is seeking a declaration that Section 140A of the ITA, read conjunctively with the Income Tax (Transfer Pricing) Rules 2012 and 2023, the Inland Revenue Board Transfer Pricing Guidelines 2017, and the Organisation for Economic Co-operation and Development (OECD) Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations 2017 and 2022, permits the variation of interest rates in intra-group financing arrangements.

Berjaya Group is also seeking a declaration that the IRB misinterpreted and misapplied Sections 140A(2) and 140A(3) of the ITA in making the transfer pricing adjustments, as it failed to establish a reason to believe that variations in interest rates are not permitted under the law.

The company is also seeking a declaration that the IRB erred in excluding the zero-interest loan from Berjaya Corp in calculating the cost of funds, as well as a declaration that the advances do not constitute financial assistance under Rule 12(2) of the 2012/2023 Transfer Pricing Rules, for which interest would otherwise have been chargeable.

In addition, Berjaya Group is seeking a declaration that the IRB failed to properly apply the economic substance test required under the OECD Guidelines and the IRB Transfer Pricing Guidelines 2017 in determining whether the advances constituted financial assistance.

The company is also seeking a declaration that the IRB failed to comply with the statutory precondition under Section 140A(3) of the ITA, which requires the existence of a reason to believe before any transfer pricing adjustments may be made, and a declaration that the imposition of the surcharge under Section 140A(3C) of the ITA was erroneous.

Berjaya Group was represented by Datuk S Saravana Kumar and Tan Jia Hua or Messrs Rosli Dahlan Saravana Partnership, while senior federal counsel Mohd Isa Mohamed appeared for the Attorney General Chambers, who objected to the leave application.

Before the court can hear the full judicial review, permission (leave) must first be granted. Saravana Kumar argued that there are legal questions that need to be decided by the court and that the threshold for obtaining leave is low.

When contacted by The Edge, Saravana Kumar confirmed Monday’s outcome.