Not satisfied with the IRB’s decision, the university later filed in a notice of appeal against the notifications of non-chargeability issued under Section 97A of the Act to the Special Commissioners of Income Tax (SCIT). — Malay Mail photo
KUCHING (July 10): The Inland Revenue Board (IRB) has allowed an appeal by a university in Sarawak against the notifications of non-chargeability issued under Section 97A of the Income Tax Act 1967.
Tax consultant Lam Kam Wing, in a statement made available today, said the local university had undergone tax-auditing by the IRB and consequent to that exercise, it was found that as the costs of scholarship awarded to its students did not fulfil the stipulated conditions under Section 34 (6) (l) of the Act, the IRB did not allow these costs for tax deduction.
Not satisfied with the IRB’s decision, the university later filed in a notice of appeal against the notifications of non-chargeability issued under Section 97A of the Act to the Special Commissioners of Income Tax (SCIT).
The university subsequently, through its appointed tax agent, submitted a long written legal representation, contending that Section 34 (6) (l) is not the applicable provision to disallow the claim of the costs of scholarship for tax deduction.
The claim of the university for deduction was made under Section 33 (1) of the Act, which it is contended that the costs of scholarship incurred by the university are outgoings or expenses wholly and exclusively incurred in the production of its gross income and therefore, should be allowed for tax deduction.
“After having gone through the written legal representation over roundtable discussion held with the dispute Resolution Proceeding Unit of IRB Putrajaya, it is finally agreed and decided that the appeal of the university is allowed, resulting its past years’ accumulated unutilised substantial amount of cost of provision of scholarship be allowed for tax deduction in future years,” the statement said.
The appeals were eventually recorded as settled before the SCIT by way of settlement agreement.
The university was represented by Lam, who was assisted by tax agents Toh Yong Lai and Thian Chiat Loo of JK Tax Services Sdn Bhd of Kuching.