IN THE SUPREME COURT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA In the matter of an application for special leave to appeal to the Supreme Court under and in terms of section 11A(9) of the Tax Appeals Commission Act, No. 23 of 2011, as amended, read with the Constitution of the Democratic Socialist Republic of Sri Lanka.

Seylan Bank PLC, No. 90, Galle Road, Colombo 03.

Appellant SC Appeal No. 46/2016 CA Case No. CA (tax) 23/2013 Vs.

The Commissioner General of Inland Revenue, Department of Inland Revenue, Sir Chittampalam A. Gardiner Mawatha, Colombo 2. Respondent AND NOW BETWEEN Seylan Bank PLC, No. 90, Galle Road, Colombo 03.

Appellant-Appellant Vs.

The Commissioner General of Inland Revenue, Department of Inland Revenue, Sir Chittampalam A. Gardiner Mawatha, Colombo 2.

Respondent-Respondent Before : Priyantha Jayawardena PC, J Yasantha Kodagoda PC, J K. K. Wickramasinghe, J Counsel : F. N. Goonewardena for the appellant-appellant Priyantha Nawana PC, Additional Solicitor-General, with I. Randeny, State Counsel, for the respondent-respondent Argued on : 10^th February, 2021 Decided on : 16^th December, 2021 Priyantha Jayawardena PC, J This is an appeal from a judgment of the Court of Appeal which affirmed the determination of the Tax Appeals Commission, established under the Tax Appeals Commission Act, No. 23 of 2011, as amended (hereinafter referred to as “Tax Appeals Commission”).

Facts of the case The appellant-appellant (hereinafter referred to as “appellant”) is a licensed commercial bank under and in terms of the Banking Act, No. 30 of 1988, as amended. Further, the respondent- respondent (hereinafter referred to as “respondent”) is the Commissioner-General of Inland Revenue.

In terms of section 106(1) of the Inland Revenue Act, No. 10 of 2006 (hereinafter referred to as “principal Act”), taxpayers were required to furnish a return of their income for any year of assessment, commencing on the 1^st day of April of a given year and ending on the 31^st day of March in the immediately succeeding year, on or before the 30^th day of September immediately succeeding the end of that year of assessment.

Therefore, the appellant had furnished a return of its income for the year of assessment, commencing on the 1^st of April, 2007 and ending on the 31^st of March, 2008 (hereinafter referred to as the “year of assessment 2007/2008”), on the 30^th of September, 2008, within the time period stipulated in section 106(1) of the principal Act.

Hence, the assessor of the Department of Inland Revenue (hereinafter referred to as “assessor”) was required to either accept the said return of income, or if he does not accept the said return, estimate the amount of the assessable income of such taxpayer and make an assessment accordingly, under section 163(3) of the said principal Act.

Furthermore, where a taxpayer had furnished a return of his income for a given year of assessment within the time period stipulated in section 106(1) of the principal Act, the assessor was not permitted to make an assessment of income tax for such year of assessment (if any) after the expiry of eighteen months from the end of that year of assessment, in terms of section 163(5)(a) of the principal Act.

Therefore, since the appellant had furnished a return of its income for the year of assessment 2007/2008 within the time period stipulated in section 106(1) of the principal Act, the assessor was required to make an assessment of income tax for such year of assessment (if any) on or before the 30^th of September, 2009, in terms of section 163(5)(a) of the principal Act However, while the said time period given to an assessor to make an assessment of income tax for the year of assessment 2007/2008 (if any) under the principal Act was still in operation, Inland Revenue (Amendment) Act, No. 19 of 2009 (hereinafter referred to as “amending Act”) was enacted by Parliament and certified by the Speaker on the 31^st of March, 2009.

By the said amending Act, inter alia, sections 106(1) and