WHEN CAN A TAX AUTHORITY RAISE A BEST OF JUDGEMENT (BOJ) ASSESSMENT AGAINST A TAXPAYER?

Based on established legal cases, before a Tax Authority can successfully defend a Best of Judgement (BOJ) assessment, it must prove the following:
1 There is an existence of a trigger for BOJ – See the case of Mobile Oil Nig Ltd V Federal Board of Internal Revenue (2011) 5 TLRN 167 at pages 207 and 231, where the Supreme Court held that a tax authority is empowered to make additional assessments only when there is a discovery of new facts and issues.

2 There is a basis for Tax Authority to reopening of past issues based on new facts such as the discovery of sources of income which were never previously disclosed by the Taxpayer. – See S. E. Ola V Federal Board of Internal Revenue (2011) 5 TLRN, 136 and 138.

3 The Tax Authorities must show that the imposition of the BOJ Assessment is justified – See United Bank for Africa Plc V Kaduna State Internal Revenue Service – TAT/NWZ/KD/WHT/013/22

4 That the BOJ is not arbitrary and should not be based on chance in the case of Federal Board of Inland Revenue Vs J. A. Omotosho (2012) TLRN 88 at page 92, M. B. Belgore, J. (as he then was), held that in reaching an assessment, the tax man “must not act dishonestly, or vindictively or capriciously, because he must exercise judgement in the matter …”.

5 That the BOJ assessment was not appealed and that it had become conclusive because of failure by the Taxpayer to exercise right of appeal. See the case of Ahmadu V Governor of Kogi State (2009) 1 TLRN 319. See also the case Bayelsa State B.I.R. V Specialty Drilling Fluids TAT/SSZ/008/2023 where it was ruled that in line with Section 58(1) of PITA 2011(as amended) “any assessment that has not been duly objected to, within the stipulated 30 days period has become final and conclusive”.