S Saravana Kumar, representing the widow of Daim Zainuddin, said his client was being double taxed on her income.

He said Section 45(2)(a) of the Income Tax Act 1967 allows a wife to be jointly taxed with her husband. Imposing the same tax on Naimah would constitute double taxation, he added.

The section provides that a “wife may elect in writing that her total income shall be aggregated with the total income of her husband and assessed in his name for that year of assessment”.

“They (LHDN) taxed the applicant’s late husband for the shares she owned, and he had already reached a settlement with LHDN when he paid the taxes.

“(Naimah) has always elected to pay taxes jointly with her husband. Taxing her again is not right. It amounts to double taxation, which is why we have filed for a judicial review,” he said.

Saravana told the court that LHDN sent a letter to Daim dated June 12, 2023, stating that his wife had acquired an additional 350,266,407 shares in Ilham Baru Sdn Bhd in 2018.

He claimed that although Daim and LHDN had reached a settlement, the tax authority later issued a separate letter to Naimah dated Jan 18, 2024, on the same subject matter.

Naimah filed her application for leave to commence judicial review proceedings in August last year. She is seeking to quash LHDN’s demand for RM313.8 million in tax arrears.

She contends that LHDN cited the wrong provisions of the law when issuing its notice for tax assessment for 2018.

Saravana was assisted by Amira Azhar and Dharshini Sharma, while federal counsel Sheryn Yong represented the Attorney-General’s Chambers.

Justice Shahnaz Sulaiman fixed April 22 for the decision.