Special Commissioners of Income Tax (SCIT)

The situations in which a taxpayer can appeal include:

• when he or she believes that tax relief is not given correctly,

• the taxpayer forgets to claim certain fees and expenses, and

• when the taxpayer is dissatisfied with the income tax assessment made by the Inland Revenue Board (IRB).

If taxpayers receive a notice of assessment and disagree with it, they allow appealing; there are two ways for taxpayers to dispute tax assessments by the IRB:

• They may appeal to the Special Commissioners of Income Tax (SCIT); or

• Undergo judicial review.

The vision of Special Commissioners of Income Tax

To be a credible, impartial and competent body in determining income tax disputes while complying faithfully with the Federal Constitution and related tax laws.

The Objective of Special Commissioners of Income Tax

Hearing and deciding income tax appeal issues of facts and law under:

1. Income Tax Act 1967 [Act 53];

2. Petroleum (Income Tax) Act 1967 [Act 543];

3. Real Property Gains Tax Act 1976 [Act 169]; and

4. Labuan Business Activity Tax Act 1990 [Act 445].

What is the Office of the Special Commissioners of Income Tax?

1. The Office of the Special Commissioners of Income Tax hears appeals from taxpayers dissatisfied with the income tax assessment made by the Director General of Inland Revenue (DGIR).

2. A taxpayer dissatisfied with the income tax assessment by the DGIR can lodge an appeal in Form Q, which can be obtained from any office of the Inland Revenue Board (IRB).

3. If the DGIR agrees with the dispute, the case is settled. If not, the case is forwarded to the Office of the Special Commissioners of Income Tax for hearing.

Is the Office of the Special Commissioners of Income Tax under the Inland Revenue Board?

The Special Commissioners of the Income Tax Office are not under the IRB.

Since the Special Commissioners of Income Tax hear appeals against the decision of the DGIR, it has to be independent, and thus, it is placed under the Federal Treasury.

Who can represent the taxpayer for the appeal?

An advocate, a tax agent or both or the taxpayer himself can appear in the proceedings.

Who hears the appeals?

The cases are heard by a panel of three persons.

The Chairman must be:

• an officer of the Judicial and Legal Service,

• a holder of an office to which the Judges Remuneration Act 1971 applies; or

• an advocate.

The other two members are persons appointed on contract from various fields:

• taxation,

• accounts,

• law and others.

How are the appeal proceedings conducted?

The appeals are heard "in camera", and only those involved can be present.

The general public is not permitted to attend and witness these proceedings.

The proceedings do not follow the rigid procedures as in Court; there is flexibility.

Where are these appeal proceedings held?

Usually, these proceedings are held in the town where the IRB office handling the taxpayer's file is located.

After hearing an appeal, the Special Commissioners must give their decision in the form of a deciding order (Grounds of Decision).

The deciding order must either confirm or discharge the assessment to which the appeal relates or direct the DG to amend the assessment.

Suppose the Special Commissioners believe an appeal was made in bad faith or for no valid reason (vexatious or frivolous).

In that case, they have the authority to compel the taxpayer to pay an amount of money (not to exceed RM 5,000) as costs to the Special Commissioners.

Is the decision of the Special Commissioners of Income Tax final?

The decision of the Special Commissioners of Income Tax is not final.

Any party not satisfied with the decision of the Special Commissioners of Income Tax which is issued as a Deciding Order, can appeal to the High Court.

Further appeal may be made from the decision of the High Court to the Court of Appeal.

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