What is the constitutional issue raised regarding Section 106(3) of the Income Tax Act?

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Court of Appeal Affirms Constitutionality of Section 106(3) of the Income Tax Act

The Court of Appeal has dismissed appeals by Datuk Seri Najib Razak and his son, Datuk Mohd Nazifuddin, upholding the constitutionality of Section 106(3) of the Income Tax Act. The appellants had argued that this section was unconstitutional, but the appellate court found no merit in their claims, affirming previous High Court and Federal Court determinations on the matter. This ruling allows the Inland Revenue Board (IRB) to proceed with recovering RM1.69 billion from Najib and RM37.6 million from Nazifuddin in tax arrears.
Appellants' Constitutional Challenge Dismissed

The core of the legal challenge by Najib and Nazifuddin centred on the constitutionality of Section 106(3) of the Income Tax Act. They contended that the provision itself was unconstitutional. However, a three-member bench of the Court of Appeal, led by Datuk Abdul Karim Abdul Jalil, unanimously found these arguments to be without legal standing. The court's opinion was that Section 106(3) is not unconstitutional, a stance that aligns with consistent rulings from both the High Court and the Federal Court.
Legal Status of Section 106(3) Consistently Upheld

The appellate court emphasised that the legal status of Section 106(3) of the Income Tax Act has been clearly and consistently determined by higher courts. This established legal precedent formed a significant basis for the Court of Appeal's decision to dismiss the appellants' arguments. The judges found no misdirections by the High Court judges who had previously ruled in favour of the IRB, leading to the summary judgments against Najib and Nazifuddin.
Dismissal of Appeals and Costs Awarded

Consequently, both appeals brought by Najib and Nazifuddin were dismissed by the Court of Appeal. Each appellant was ordered to pay costs of RM10,000. This decision underscores the appellate court's agreement with the High Court's findings, which had allowed the IRB's applications for summary judgments to recover substantial tax arrears from the father and son. The court found no grounds to overturn the previous rulings.

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What is the constitutional issue raised regarding Section 106(3) of the Income Tax Act?

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