A charitable institution's tax exemption rights are preserved despite amendments to tax legislation unless explicitly revoked.

[1] This was an appeal by the Society of La Salle Brothers (the appellant) against the decision of the High Court in refusing the appellant's application for judicial review. The application was, among others for certiorari, to quash the notices of assessment dated 16 March 2015 for the years of assessment 2004, 2006, 2007, 2010, 2011, 2012 and 2013 (the years in dispute) issued by the Ketua Pengarah Hasil Dalam Negeri (the respondent).

[2] We heard the appeal and had unanimously allowed the same. Our reasons now follow.

The Background Facts

[3] The background facts as appeared in the affidavit in support of the appellant's judicial review application are as follows.

[4] The appellant, also known as the Visitor in the Federation of the Malaya of the Christian's Brothers School, has been in Malaysia for more than 160 years and has been instrumental in establishing a number of La Salle schools in Malaysia. 39 such schools are still in operation where the appellant continues to be involved with these schools alongside the Ministry of Education.

[5] The appellant's sole objective is to ensure that education is accessible to Malaysian of all races, religions and creed. The appellant has been and still is a charitable institution. It only holds investments in the form of fixed deposits, unit trust and securities. The returns from these investments generate sufficient income for the appellant to be self financing. This position has been consistent for the years in dispute, except for the year of assessment 2004 where the appellant had a higher return gain due to the disposal of its property in Penang.

[6] By a letter dated 26 January 1970, the respondent confirmed that the appellant enjoys tax exemption status. The said letter amongst others, states that the appellant is a charitable institution and is therefore not liable to income tax. The said letter was never withdrawn by the respondent.

[7] By virtue of the tax exemption, the appellant did not subject any of its investment returns to income tax, and the appellant has never paid any income tax on its returns.

[8] By a letter dated 25 July 1995, the respondent informed the appellant of the requirement to re-apply the tax exemption status. The appellant failed to do so.

[9] On 27 March 2015, the appellant was served with the notices of assessment dated 16 March 2015 with penalties for the years of assessment 2004, 2006, 2007, 2010, 2011, 2012 and 2013 (collectively referred to as "notices of assessment"). The assessment raised (including the penalties) were more than RM40 million.

The Income Tax Ordinance 1947 /The Income Tax Act 1967

[10] Before the Income Tax Act 1967 ( ITA 1967) came into effect, the Income Tax Ordinance 1947 (the 1947 Ordinance) was in force where s 13(1)(g) provides:

"13. (1) There shall be exempt from tax:

(g) the income of any charitable institutions or of any body of persons or trust established for charitable purposes only:

Provided that where a trade or business is carried on by any such institution, body of persons or trust, the income derived from such trade or business shall be exempt from tax only if such income is applied solely for charitable purposes and either:

(i) the trade or business is exercised in the course of the actual carrying out of a primary purpose of such institution, body of persons or trust; or

(ii) the work in connection with the trade or business is mainly carried on by persons for whose benefit such institution, body of persons or trust was established."

[11] When the whole of the 1947 Ordinance was repealed and replaced by the ITA 1