KUALA LUMPUR (Sept 29): The High Court has granted an interim (temporary) stay sought by businessman Datuk Seri Mahmud Abu Bekir Taib, over an order to pay RM41.8 million in additional assessments and penalty imposed by the Inland Revenue Board (IRB) for the years 2021 to 2024 that had been issued on him in June this year.

The interim stay was granted by High Court judge Norliza Othman on Tuesday, pending the inter-partes hearing of the stay application, which has now been fixed for Nov 26.

At the same time, Norliza also fixed Nov 20 to decide on Mahmud Abu Bekir’s application for leave for judicial review to challenge the imposition of the additional taxes and penalty on him by the IRB.

In judicial review proceedings, leave or permission has to be gained first before the merits of the challenge against the government, as in this case the IRB, is heard.

The Sarawak businessman, who is son of the former Sarawak chief minister and governor, the late Tun Abdul Taib Mahmud, had filed the judicial review application on Sept 14, this year, through Messrs Rosli Dahlan Saravana Partnership, to seek a certiorari order to quash the IRB’s decision for the years of assessment 2021, 2022, 2023 and 2024, which he received via a letter dated June 23, this year.

Mahmud Abu Bekir claimed the decision by the IRB is ultra vires, illegal, void, unlawful, without authority, and/or in irrational excess of, and/or unreasonable and constitutes a denial of his legitimate expectations.

Besides this, he is seeking a declaration that the IRB is bound by and shall give effect to Section 3 of the Income Tax Act 1967 (ITA) — that income tax shall be charged for each year of assessment upon the income of any person accruing in or derived from Malaysia or received in Malaysia from outside Malaysia.

In addition, he is also seeking a declaration that the IRB’s powers under Sections 3 and 4 of the ITA are limited to income tax, and not to the assessment of wealth or net worth.

Furthermore, Mahmud Abu Bekir is also seeking a declaration that there is no basis for the IRB to arbitrarily treat a taxpayer’s bank withdrawals as “unexplained expenditure” and deem them as undeclared and chargeable to tax income.

He is further seeking to stay the enforcement of the IRB’s decision pending the full and final determination of his judicial review.

In Tuesday’s proceedings, Mahmud Abu Bekir was represented by Amira Ahmad Azhar.

In his affidavit in support of the judicial review application, the businessman, who is also a Cahya Mata Sarawak director, denied that he had not corresponded with the IRB over his tax matters, as his tax agent, MNS Tax Management Consulting Sdn Bhd, had corresponded on his behalf with the IRB from October 2025 until July this year, during which there had been 20 separate submissions.

Mahmud Abu Bekir claimed that he had submitted his capital statement on June 19, and subsequently the IRB had, four days later on June 23, raised his assessment.

“The assessments cannot simply be raised on the strength of an earlier, superseded proposal. To do so, where a taxpayer has cooperated so extensively is itself indicative of an assessment not properly made in accordance with IRB’s powers and duties under the ITA.

“The IRB has failed to identify any provision whatsoever in the ITA that authorises it to impose tax or to raise an assessment or additional assessment on the basis of a capital statement. Indeed, the ITA contains no provision at all empowering or requiring the IRB to prepare, adopt, or rely upon a ‘capital statement’ as a basis for assessment,” Mahmud Abu Bekir claimed.

He alleged that the IRB had raised the assessments arbitrarily, by simply treating the increase in his overall net worth or wealth as reflected in the capital statement, as if it were itself taxable income.

Mahmud Abu Bekir said this approach adopted by the IRB is impermissible, as the charge to tax under Sections 3 and 4 of the ITA is a tax on income and not a tax on a person’s wealth, capital or net worth.

“For these reasons, I humbly pray the court allow my application and grant leave to commence judicial review proceedings against the IRB, together with an order staying all further proceedings in respect of the assessments, pending the final and full determination of the substantive application,” he said in court documents sighted by The Edge.