PUTRAJAYA: The Federal Court has ruled in favour of the Inland Revenue Board (IRB) in a RM1.8 billion tax dispute with Tenaga Nasional Berhad (TNB) for the 2018 assessment year.
A five-member bench, led by Court of Appeal President Tan Sri Abang Iskandar Abang Hashim, unanimously overturned previous High Court and Court of Appeal decisions that had sided with TNB.
The court found that TNB had wrongly claimed reinvestment allowance (RA) under Schedule 7A of the Income Tax Act 1967 (ITA), which is intended for manufacturing companies. Justice Rhodzariah Bujang stated that TNB, as a service provider, should have applied for investment allowance under Schedule 7B instead.
The dispute arose after TNB filed a judicial review in 2020 challenging IRB’s rejection of its RM1.81 billion RA claim.
The High Court and Court of Appeal initially ruled in TNB’s favour, but the Federal Court reversed those decisions, stating that TNB’s operations fall under the services sector, not manufacturing.
Despite the legal battle, TNB has already paid the assessed tax amount. The IRB was represented by Datuk Dr Cyrus Das and senior revenue counsel Ashrina Ramzan Ali, while TNB’s legal team included Datuk D. P. Naban and S. Saravana Kumar.
