Allswell Marketing Pte Ltd v Public Prosecutor: Income Tax Act Penalties for Failure to File Tax Returns

Allswell Marketing Pte Ltd appealed to the High Court of Singapore against the decision of the Magistrate's Court, which convicted them of two offences under s 94A(3) of the Income Tax Act for failing to file income tax returns for the Year of Assessment 2010 and 2011. The High Court, presided over by See Kee Oon J, dismissed the appeal, holding that the penalty order was correctly imposed based on the Comptroller of Income Tax's assessment, even while the assessment was being challenged before the Income Tax Board of Review. The court found the appeal unmeritorious.

1. Case Overview

1.1 Court

High Court of the Republic of Singapore

1.2 Outcome

Appeal dismissed

1.3 Case Type

Criminal

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Appeal regarding penalties under the Income Tax Act for failing to file tax returns. The court dismissed the appeal, upholding the penalty order.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Allswell Marketing Pte LtdAppellantCorporationAppeal DismissedLostLoy Jen Ny
Public ProsecutorRespondentGovernment AgencyJudgment for RespondentWonNorman Yew, Ang Siok Chen

3. Judges

Judge NameTitleDelivered Judgment
See Kee OonJudgeYes

4. Counsels

Counsel NameOrganization
Loy Jen NyIndependent Practitioner
Norman YewAttorney-General’s Chambers
Ang Siok ChenAttorney-General’s Chambers
Joel QuekWong Partnership LLP

4. Facts

  1. Allswell Marketing Pte Ltd failed to file income tax returns for YA 2010 and YA 2011 by the specified deadlines.
  2. The Comptroller of Income Tax assessed the tax payable for YA 2010 and YA 2011.
  3. Allswell Marketing Pte Ltd disputed the Comptroller's assessment and appealed to the Income Tax Board of Review.
  4. The Magistrate declined to adjourn sentencing pending the outcome of the appeal to the ITBR.
  5. The appellant was convicted of two charges under s 94A(3) ITA.
  6. The Comptroller utilized the Bank Deposits Method to reassess the tax payable for YA 2010 due to inadequate record-keeping.

5. Formal Citations

  1. Allswell Marketing Pte Ltd v Public Prosecutor, Magistrate’s Appeal No 9203 of 2018, [2019] SGHC 157
  2. Allswell Marketing Pte Ltd v Public Prosecutor, , [2018] SGMC 48

6. Timeline

DateEvent
Allswell Marketing Pte Ltd was required to submit return of income to the Comptroller for YA 2010.
Allswell Marketing Pte Ltd was required to submit return of income to the Comptroller for YA 2011.
Notice of Assessment issued by Comptroller in respect of YA 2010.
Notice of Assessment issued by Comptroller in respect of YA 2011.
Statement was taken from Ms Loy, who stated that the appellant had not been able to submit the tax returns due to staff turnover.
IRAS informed the appellant to file the income tax returns for YA 2010 and 2011 by 2015-02-28 and 2015-03-31 respectively.
The appellant did not submit the tax return for YA 2010 as required.
The appellant did not submit the tax return for YA 2011 as required.
Ms Loy called IRAS and proposed submitting the tax returns for both financial years by 2015-08-15.
Ms Loy sent an email requesting to submit the tax returns by 2015-09-11 and 2015-09-18. The request was rejected.
IRAS filed two charges against the appellant for offences under s 94A(3) ITA. The summons was issued.
The summons was served on the appellant.
The appellant submitted the income tax return, unaudited accounts and tax computation in respect of YA 2010.
The appellant submitted the income tax return, unaudited accounts and tax computation in respect of YA 2011.
Field visit conducted by the Corporate Tax Division and the appellant’s record-keeping was found to be questionable.
The appellant was informed that there were signs of inadequate record-keeping.
Comptroller re-assessed the tax payable for YA 2010 using the Bank Deposits Method due to inadequate record-keeping.
IRAS officers explained to Ms Loy and the appellant’s accounts representative how the BDM was used.
Ms Loy postponed the meeting with IRAS.
Ms Loy failed to attend the meeting with IRAS.
Ms Loy failed to attend the meeting with IRAS.
Ms Loy called and informed an IRAS officer that she would save the information on a thumb drive and send it over on 2016-12-14.
Ms Loy failed to provide information to IRAS.
IRAS could not contact Ms Loy.
IRAS could not contact Ms Loy.
Ms Loy submitted to IRAS the audited accounts for YA2011.
The appellant was convicted after trial.
The respondent applied for the hearing to be adjourned as IRAS required more time to assess the tax payable.
IRAS issued the amended NOAs for YA 2010 and YA 2011.
Appellant stated at the adjourned sentencing hearing that it was objecting to the NOAs and applied for an adjournment.
The appellant applied to adjourn sentencing as it wanted to submit further documents to IRAS, and IRAS granted it a final extension to 2018-04-27.
At the hearing, the appellant sought a further adjournment. IRAS stated that it had not received anything since 2017-06-27.
The Comptroller issued NRAs for YA 2010 and YA 2011.
The appellant filed its notice of appeal to the ITBR.
The appellant tendered submissions seeking an adjournment of sentencing or a stay of execution pending appeal.
The appellant was sentenced and sentence is stayed pending appeal.
Hearing of the appeal.
Judgment reserved.

7. Legal Issues

  1. Failure to File Income Tax Returns
    • Outcome: The court held that the appellant did not have a reasonable excuse for failing to file income tax returns and that the penalty was correctly imposed based on the Comptroller's assessment.
    • Category: Substantive
    • Sub-Issues:
      • Reasonable excuse for non-compliance
      • Validity of Comptroller's assessment
  2. Interpretation of s 94A(3) of the Income Tax Act
    • Outcome: The court interpreted s 94A(3) as requiring a literal reading, with the penalty ordered based on the Comptroller's assessment, but with consideration for any revised assessments by appellate bodies.
    • Category: Procedural
    • Sub-Issues:
      • Court's power to impose penalty
      • Relevance of appellate body assessments
      • Discretion to adjourn proceedings

8. Remedies Sought

  1. Appeal against the penalty order

9. Cause of Actions

  • Violation of s 94A(3) of the Income Tax Act

10. Practice Areas

  • Tax Law
  • Criminal Enforcement

11. Industries

  • No industries specified

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Allswell Marketing Pte Ltd v Public ProsecutorMagistrate's CourtYes[2018] SGMC 48SingaporeThe judgment being appealed from.
Poh Boon Kiat v Public ProsecutorSingapore Court of AppealYes[2014] 4 SLR 892SingaporeCited for the principle that courts should consider the textual and legislative context of penal provisions introduced with the phrase 'shall be liable' in determining whether they confer a discretion.
Tan Cheng Bock v Attorney-GeneralSingapore Court of AppealYes[2017] 2 SLR 850SingaporeCited for the principle that primacy should be given to the text of the provision and its statutory context when ascertaining the legislative purpose or object of the statute.
Attorney-General v Ting Choon Meng and another appealSingapore Court of AppealYes[2017] 1 SLR 373SingaporeCited for the principle that the purposive approach does not allow the court to construe the provision in a manner that would do violence to the express wording.
JD Ltd v Comptroller of Income TaxSingapore High CourtYes[2006] 1 SLR(R) 484SingaporeCited for the principle that s 14(1)(a) ITA, which requires the Comptroller to be 'satisfied that the interest was payable', conferred administrative discretion on the Comptroller that had to be exercised in good faith and in the interests of good administration.
Associated Provincial Picture Houses, Limited v Wednesbury CorporationEnglish Court of AppealYes[1948] 1 KB 223England and WalesCited for the Wednesbury standard of unreasonableness.
Commissioners of Income Tax, United and Central Provisions v Badridas Ramrai ShopPrivy CouncilYesCommissioners of Income Tax, United and Central Provisions v Badridas Ramrai Shop (1937) 64 LR Ind App 102IndiaCited for the principle that the 'best judgment' standard requires that the Comptroller must have made what he honestly believes to be a fair determination of the taxpayer’s chargeable income based on the material available to him.
Argosy Co Ltd (In voluntary liquidation) v Inland Revenue CommissionerJudicial Committee of the Privy CouncilYes[1971] 1 WLR 514UnknownCited for the principle that the 'best judgment' standard requires that the Comptroller must have made what he honestly believes to be a fair determination of the taxpayer’s chargeable income based on the material available to him.
Comptroller of Income Tax v S & Co (Pte) LtdHigh CourtYes[1971-1973] SLR(R) 592SingaporeCited for the principle that the appellant would have needed to show how the Comptroller’s assessment was erroneous.
Public Prosecutor v Donohue EniliaHigh CourtYes[2005] 1 SLR(R) 220SingaporeCited for the threshold for appellate intervention in respect of the exercise of judicial discretion.
Kee Leong Bee and another v Public ProsecutorCourt of AppealYes[1999] 2 SLR(R) 768SingaporeCited for the threshold for appellate intervention in respect of the exercise of judicial discretion.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Income Tax Act (Cap 134, 2008 Rev Ed) s 94A(3)Singapore
Income Tax Act (Cap 134, 2008 Rev Ed) s 62(1)Singapore
Income Tax Act s 80(14)Singapore
Income Tax Act s 95(1)Singapore
Income Tax Act s 72(3)Singapore
Income Tax Act s 85(1)Singapore
Income Tax Act s 80(10)Singapore
Income Tax Act s 91(2)Singapore
Income Tax Act ss 76(4)Singapore
Income Tax Act ss 79(11)Singapore
Income Tax Act ss 81(1)Singapore
Income Tax Act ss 81(2)Singapore
Criminal Procedure Code (Cap 68, 2012 Rev Ed) s 228(6)Singapore
Criminal Procedure Code s 238(1)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Income Tax Act
  • Penalty
  • Failure to file tax returns
  • Comptroller of Income Tax
  • Year of Assessment
  • Reasonable excuse
  • Bank Deposits Method
  • Income Tax Board of Review
  • Assessment
  • Chargeable income

15.2 Keywords

  • Income Tax
  • Tax Returns
  • Penalty
  • Singapore
  • Criminal Law

16. Subjects

  • Taxation
  • Criminal Procedure

17. Areas of Law

  • Criminal Law
  • Statutory Offences
  • Income Tax Law