Tax Tribunal Orders Hospital To Pay Lagos State Internal Revenue 2010 – 2015 Tax Liability, Penalty

The Lagos Zone of the Tax Appeal Tribunal has ordered Celian Hospital to pay the Lagos State Board of Internal Revenue the sum of N3,225,069:44 (Three million two hundred and twenty-five thousand sixty-nine Naira and forty-four kobo only) being its assessed liability for personal income taxes of its employees, withholding taxes from its transactions, Development and Business Premises levies covering the 2010 – 2015 years of assessment, due to Lagos State Government.

The Tribunal also ordered Celian Hospital to pay interest and penalty on the assessed liability, based on the relevant provisions of the Personal Income Tax Act, and the sum of N100,000 (One hundred thousand Naira only) as Costs of action.

The Panel led by Hon. Adedapo Sobowale ruled that the Lagos State Board of Internal Revenue has adduced credible evidence to entitle it to judgment and has shown to the satisfaction of the honourable Tribunal that it conducted a tax audit exercise for 2010 – 2015 years of assessment on the Celian Hospital, an assessed liability was raised and served on the Hospital.

From facts, the Appellant- Lagos State Board of Internal Revenue had submitted that an audit exercise was conducted on the books and records of the Celian Hospital and it was subsequently established that the Respondent failed to deduct and remit accurately the personal income taxes of its employees, withholding taxes from its transactions, development levy and business premises levy due to the Lagos State Government.

The Lagos State Internal Revenue averred that as a result of the under deductions and under remittance, the Celian Hospital was served a Demand Notice accompanied by a Notice of Assessment of its established liability for personal income tax, withholding taxes, development levies and business premises renewal covering the period 2010 – 2015 in the sum of N3,225,069:44 (Three million two hundred and twenty-five thousand sixty-nine Naira and forty-four kobo) and the Respondent refused to object or appeal the assessed liability.

However, despite serving the Respondent- Celian Hospital the Hearing notices, and the other processes, the Respondent failed to file a Reply to the Appeal.

The learned counsel to the Lagos State Board of Internal Revenue further averred that the Celian Hospital’s refusal to further participate in the proceedings shows a deliberate ploy to evade its tax and thereby depriving the Lagos State Government of its well-deserved revenue, and urged the tribunal to grant the reliefs sought.

Delivering judgment after careful analysis of the submission of both parties, the tribunal led by Hon. Adedapo Sobowale as Chairman, Hon. Olatunde Balogun, Hon. Ebere Oruche, Hon. A. K. Akinsehinwa, and Hon. Aminu Usman as members held that the evidence adduced by the Lagos State Board of Internal Revenue, in proof of the Notice of Appeal, was neither challenged nor contradicted nor controverted by the Celian Hospital, despite having notification of the hearing of the appeal, and the honourable Tribunal can safely act on it, as unchallenged evidence.

The Tribunal ruled that the Lagos State Board of Internal Revenue has adduced credible evidence to entitle it to judgment and has shown to the satisfaction of the honourable Tribunal that it conducted a tax audit exercise for 2010 – 2015 years of assessment on the Celian Hospital, an assessed liability was raised and served on the Respondent.