JUDGMENT

Edgar Joseph Jr. SCJ:

This was a case stated by the Special Commissioners of Income Tax ("the Special Commissioners") for the opinion of this Court, pursuant to para 34 of the 5th Schedule of the Income Tax Act 1967 , which arose from a successful preliminary objection taken at the hearing before them, on behalf of the Director General of Inland Revenue ("the Revenue") who is the respondent to the present appeal.

Broadly stated, the preliminary objection taken by the Revenue was that the notice of appeal in Form Q dated 22 January 1985, which had been served upon the Special Commissioners having been followed by a fresh notice of assessment dated 21 November 1987, and the appellant Bank having failed to appeal against the fresh assessment appearing in the fresh notice of assessment dated 21 November 1987, there was in law no appeal before the Court, with the consequence that the notice of appeal dated 22 January 1985, would have to be struck out.

To put the preliminary objection in its correct perspective, it is necessary to set out the background facts and the rival contentions of the parties as they appear in the case stated; they are as follows:

1. At a meeting of the Special Commissioners of Income Tax on 18 April 1989 at Penang, the appellant's appeal against the notice of assessment dated 19 January 1985 showing RM32,012.70 tax payable for the year of assessment 1977 in respect of chargeable gains on disposal of chargeable assets was set down for hearing before us.

2. The following documents were submitted for the hearing:

Exhibit No. Particulars A1 Statement of agreed facts.

A2 Agreed bundle of documents (pages 1 - 102).

3. Encik N.G. Sivanandan assisted by Encik Ranjit Singh, both advocates and solicitors, appeared for the appellant. Cik Patricia Tan Ghee Phaik, Federal Counsel, assisted by Cik Lim Poa Chen, assessment officer, appeared for Revenue. 4. Before the appeal proceeded Federal Counsel on behalf of the Director General of Inland Revenue (Revenue) made a preliminary objection to the hearing of the appeal referred to in paragraph 1 above. After hearing and considering submissions made on behalf of both parties we immediately made an order striking out the said appeal: a copy of our formal Order is appended as Annexure "A". 5. The appellant was dissatisfied with our Order and requested us to state a case for the opinion of the High Court pursuant to paragraph 34 of Schedule 5 to the Income Tax Act 1967 in a letter dated 4 May 1989.

6. The salient facts (found or admitted) on which our Order was based, were as follows:

(a) one Lim Tong Sang was the registered owner of 8 holdings in the Central District of Province Wellesley (hereinafter referred to as "the subject properties"); (b) the subject properties were charged to Standard Chartered Bank, then known as The Chartered Bank (hereinafter referred to as "the Appellant") by the said Lim Tong Sang as security for banking facilities granted by the appellant to Lim Song Wood Moulding Sdn. Bhd.; (c) the appellant was at all material times the nominee of Lim Tong Sang until it was declared the agent of Lim Tong Sang on 22 May 1986; (d) by a sale and purchase agreement dated 30 May 1977 the appellant as nominee of Lim Tong Sang disposed the subject properties to Jurutema Sdn. Bhd. for the sum of RM725,000;

(e) (1) by a notification of disposal of Chargeable Asset dated 14 October 1977 the appellant reported the disposal of the subject properties to the Director General of Inland Revenue (Revenue); (2) Revenue issued a requisition dated 1 October 1980 requesting the appellant as nominee for Lim Song Wood Moulding Sdn. Bhd. to pay real property gains tax amounting to RM32,012.70 in respect of chargeable gains arising on the disposal of the subject properties;

(f) on 24 October 1980 the appellant paid the said tax under protest and at the same time sent a notice of appeal in Form Q dated 23 October 1980 appealing against the requisition dated 1 October 1980;

(g) (1) on 12 Janu