Grameen Kalyan wins pause on Tk6.67 billion tax recovery as appeal heads to full bench

Tax collection paused before December hearing

Bangladesh's Supreme Court has paused an instruction to recover Tk6,669,152,370 in disputed income tax from Grameen Kalyan, the charitable organisation founded by Nobel laureate Muhammad Yunus. The Appellate Division's full bench is scheduled to hear the organisation's two petitions seeking permission to appeal on December 13, 2026.

Chamber judge Justice Md Rezaul Haque issued the order on October 18 after hearing Grameen Kalyan's challenge to a High Court judgment covering five tax years, from 2012-13 to 2016-17. The demand is commonly described as Tk666 crore, although the precise figure is about Tk666.92 crore. One crore equals 10 million taka.

The immediate effect is that the National Board of Revenue (NBR) cannot pursue recovery while the stay operates, Deputy Attorney General Md Mehedi Hasan said. The order pauses the High Court's direction for rapid collection; its finding that the tax demand was lawful remains in place as the appeal process continues.

The dispute turns on a practical question: when Grameen Kalyan received money through an investment arrangement with Grameen Telecom, was that money a dividend, or another kind of income subject to ordinary tax? A second question follows closely: could tax paid under another organisation's name count toward Grameen Kalyan's own bill?

Grameen Kalyan says tax had already been deducted from the underlying dividends. The revenue authorities and the High Court treated the organisations as separate taxpayers, making the identity of the recipient and the documents recording payment central to the case.

What the chamber judge's order changes

Grameen Kalyan filed its challenge with the Appellate Division on October 18. Senior lawyer Abdullah Al Mamun represented the organisation before the chamber judge, who handles applications requiring attention before a larger bench considers them.

The organisation has filed two leave to appeal petitions. These ask the Appellate Division for permission to challenge the High Court decisions. The December hearing is therefore the next stage in a legal process that began with two writ petitions in 2017.

Deputy Attorney General Mehedi Hasan described the stay as lasting until December 13. Mamun described the protection as continuing until the appeal is disposed of. Both said the NBR could not collect the disputed amount for now; the December 13 hearing is the next scheduled court date.

For Grameen Kalyan, the immediate change is relief from collection action under the High Court's instruction. The question of how much tax it ultimately owes now goes before the Appellate Division.

Why the High Court upheld the demand

Justices Md Mozibur Rahman Miah and Rezaul Karim dismissed Grameen Kalyan's two writ petitions on September 10, 2026, upholding the reassessment. One procedural chronology gives September 11 for the new bench's rejection; the accounts describing the ruling itself place it on September 10.

The bench's written judgments ran to 15 and 32 pages. They were signed on October 12. Publication dates are given as October 12, 13 and 15, with accounts of the Supreme Court website release placing it on October 12.

The High Court directed the NBR chairman and other officials to recover unpaid tax under the law. In one judgment, the bench set out its instruction:

The respondents are directed to do the needful relating to the unpaid tax from the petitioner by issuing necessary demand notice immediately. Let a copy of this judgment and order be communicated to the respondents forthwith.

The court also lifted an earlier stay. Its collection instruction made the judgment immediately consequential for the organisation, prompting the application that produced the October 18 pause.

How the investment arrangement created the dispute

Grameen Kalyan was established in 1996 and registered under the Companies Act that November. It registered with the NGO Affairs Bureau in July 2002. The organisation was formed to support charitable activities, including hospitals and clinics serving disadvantaged people.

Its connection to Yunus is as founder and former chairman. Lawyer Khaja Tanvir Ahmed said Yunus had not been associated with Grameen organisations since 2024. The tax demand at issue is against Grameen Kalyan.

The financial arrangement involved three organisations: Grameen Kalyan supplied funds to Grameen Telecom, which invested in Grameenphone shares in its own name. Grameen Telecom then agreed to pass a share of the resulting dividend profits to Grameen Kalyan.

The High Court examined an equity participation agreement dated April 13, 2011, under which Grameen Kalyan was entitled to 42.65 percent of the relevant profits. A description of an earlier arrangement in 2004 gives a share of 42.50 percent and funding of Tk532,562,941.

The dispute includes Tk285.58 crore received from Grameen Telecom and declared as dividend income. Grameen Kalyan reported total dividend income of Tk285.83 crore for the relevant tax year, meaning the Grameen Telecom payment accounted for nearly all of that declared income.

A dividend is a payment a company makes to its shareholders from profits. The legal issue was whether Grameen Kalyan's contractual right to receive part of Grameen Telecom's proceeds gave its own receipt the same tax treatment as a dividend paid directly to a shareholder.

Two competing accounts of the same money

The NBR's position was that the payment to Grameen Kalyan was a return on investment, effectively interest or income from other sources, rather than dividend income. The reassessment applied tax at 35 percent to assessed income.

Grameen Kalyan argued that Grameenphone had already deducted tax when paying the dividends that funded the arrangement. Mamun said the deduction was 15 percent and that imposing further tax would charge the same income twice.

Mamun, explaining Grameen Kalyan's objection to the tax treatment, said:

Why should additional tax be imposed after that tax has already been paid? That is the question that brought us to court. Yet the matter was reported as a tax evasion case,

The High Court focused on who owned the shares and whose tax had been paid. It found that Grameen Kalyan was not a shareholder in Grameenphone under the agreement and had no claim to ownership of those shares. It therefore accepted treating the payment from Grameen Telecom as income from other sources.

The court also said it had found no evidence of tax deducted in Grameen Kalyan's name or valid treasury payment documents establishing payment on its behalf. Documents in Grameen Telecom's name, it ruled, could not serve as Grameen Kalyan's own tax payment.

How much is claimed for each year?

Deputy Attorney General Abdus Samad Azad provided the breakdown of the NBR's demand across the five assessment years. The figures total Tk6,669,152,370:

• 2012-13: Tk1,892,525,466, approximately Tk189.25 crore.
• 2013-14: Tk1,327,746,012, approximately Tk132.77 crore.
• 2014-15: Tk1,140,282,574, approximately Tk114.03 crore.
• 2015-16: Tk1,152,296,625, approximately Tk115.23 crore.
• 2016-17: Tk1,156,301,693, approximately Tk115.63 crore.

The first year's demand is the largest, accounting for about 28.4 percent of the total. It is roughly Tk75.22 crore higher than the smallest annual demand, for 2014-15.

The Tk285.58 crore payment discussed in the investment dispute and the Tk666.92 crore tax demand refer to different measures. The former is an income receipt examined in the case; the latter is the tax authority's combined demand across five assessment years.

Why the reassessment could be challenged

The NBR's Central Intelligence Unit reopened Grameen Kalyan's tax files in 2017. A decision dated September 26, 2017, treated the disputed receipts as income from other sources under the reassessment process.

Section 120(1) of the Income Tax Ordinance, 1984, was relevant to the supervisory authority's power to revise an order made by a subordinate tax authority. Grameen Kalyan challenged the legality of the decisions through two writ petitions and also sought reconsideration before the tax commissioner.

The High Court said the reconsideration application failed because Grameen Kalyan had not paid the admitted tax liability required by section 121A(4)(b). It also referred to sections 74 and 75(2)(d)(iii) when explaining the obligation to pay tax associated with the returns.

Section 173 featured in the court's discussion of correcting mistakes. The bench said the commissioner had made a correction within 13 days of an earlier order, after giving notice and an opportunity to be heard.

The judgment also referred to Grameen Kalyan's treatment of similar income in later assessment years when assessing its position in the current dispute. The organisation continues to contest the demand through its applications to the Appellate Division.

A case repeatedly sent back for hearing

Grameen Kalyan initially obtained a High Court decision allowing it to pursue a tax appeal subject to conditions. The NBR challenged that outcome, leading to further hearings and a judgment later withdrawn because of a judge's previous involvement in the litigation.

The main procedural steps were:

• 2017: Grameen Kalyan filed two writ petitions challenging the reassessed tax demands.
• October 17, 2023: The High Court set aside the commissioner's order and allowed a conditional opportunity to appeal within 60 days.
• March 11, 2024: The Appellate Division set aside that outcome and directed fresh High Court hearings on the substance of the dispute.
• August 4, 2024: A High Court bench dismissed the writ petitions.
• 2024: The judgment was withdrawn and the cases were sent for assignment to another bench.
• September 10, 2026: The new High Court bench dismissed the petitions.
• September 14, 2026: Chamber judge Justice Farah Mahbub declined to intervene before publication of the full judgments.
• October 18, 2026: Justice Rezaul Haque paused the collection instruction and set December 13 for the full bench hearing.

The withdrawal date in 2024 is given as August 29 in the detailed procedural histories and October 4 in other accounts. The explanation given for withdrawal was that a judge on the earlier bench had previously represented the government in the same litigation as a deputy attorney general.

What collection would involve

Before the October stay, Deputy Attorney General Azad said the deputy commissioner of taxes for Taxes Zone 14 would issue a demand notice under sections 214 or 221 of the Income Tax Act, 2023. He said the notice would give Grameen Kalyan 30 days to pay, with simple interest calculated from 2017.

A different description of the judgment gives a payment period of three fiscal years. The quoted collection directions call for prompt action, while Azad described a 30 day notice. The October 18 order has now paused recovery ahead of the December hearing.

Azad said nonpayment could lead to action against bank accounts and other property under section 221. For a charitable organisation operating health services, the ability to access funds is a concrete concern, although no operational effect on its hospitals or clinics has been specified.

The Appellate Division's next task is to consider the two petitions seeking permission to appeal. Grameen Kalyan will press its argument about tax already deducted, while the High Court's reasoning centres on separate legal entities, share ownership and proof of payment.

Key Points

• The Supreme Court paused rapid recovery of Tk6,669,152,370 from Grameen Kalyan on October 18, 2026.
• The High Court's finding upholding the tax demand remains in place while the challenge proceeds.
• The demand covers five assessment years, from 2012-13 to 2016-17.
• Grameen Kalyan says tax was already deducted from the underlying dividends; the High Court found that another organisation's payment could not count as its own.
• The Appellate Division's full bench is scheduled to hear the two leave to appeal petitions on December 13, 2026.