KUALA LUMPUR (July 30): The High Court on Thursday granted Berjaya Group Bhd a stay of the Inland Revenue Board’s (IRB) RM428.04 million additional tax assessment for the 2018-2023 assessment years, as well as any further assessments, pending the disposal of its judicial review challenging the tax bill.
High Court judge Alice Loke Yee Ching granted the stay pending the judicial review in a decision via Zoom on Thursday.
“It is hereby ordered that the stay application in Enclosure 28 is hereby allowed until the full and final disposal of this judicial review proceedings with costs in the cause,” she said.
Berjaya Group, a wholly owned subsidiary of Berjaya Corp Bhd (KL:BJCORP), 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 2018 to 2023 assessment years, dated July 30, 2025, on the grounds that the imposition of the RM428.04 million assessment is ultra vires (going beyond its powers) 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 of Messrs Rosli Dahlan Saravana Partnership, while the senior revenue counsels for IRB were Marina Ibrahim and Nur Farzana Mohammad Puat.
The leave for the judicial review was granted on May 26 this year. Before the court can hear the full judicial review, permission (leave) must first be granted.
When contacted by The Edge, Saravana Kumar confirmed Thursday’s outcome.
A case management has been set for Sept 8 to fix hearing dates.