The commissioner audited the respondent for the period 2011 to 2015 and raised an assessment of Kshs.190,833,899/- as tax liability for Corporation Tax, Vat and Withholding Tax. This was objected but the commissioner rejected the objection.
The taxpayer had not maintained records for 5 years as required under Tax procedures act sec 23. The respondent explained that the documents had been destroyed by a fraudulent employee. They further requested KRA to provide them with returns filed earlier to enable them reconstruct their accounts. The appellant failed to provide such information.
According to the court, the commissioner accepted the explanation of the taxpayer and therefore could not come back to claim the applicability of the 5year rule and on the production of the records
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