Benjamin v FCT – Court confirms AAT’s decision to refuse extension of time to challenge objection decisions – 7 years out of time: ‘rested on his rights’

On 23.9.2016, the Federal Court dismissed a taxpayer’s appeal from the decision in Re Benjamin v FCT [2015] AATA 923 in which the AAT refused to allow an extension of time for the taxpayer to lodge an application for review of the Commissioner’s decision to disallow his objection to assessments for the income years ended 30 June 2000 to 2005 (which involved a liability of some $2.7m in total). The Court noted that the taxpayer was some 7 years out of time in which to file an application to review the disallowance of his objections to the assessments, and that he claimed that he never received notification of the disallowance which had been sent to his former tax agent.

In dismissing the taxpayer’s appeal, the Court found

1. that the AAT had not breached s 29(9) of the AAT Act 1975 as the AAT had given notice of the taxpayer’s application for an extension of time to the Commissioner, and that the AAT had also advised the taxpayer’s solicitor that it had done so.
2. It also found that the taxpayer’s claim that he had been denied procedural fairness in not being given a proper “hearing” in an interlocutory hearing conducted over the phone had no grounds to it because the taxpayer was given a full and proper opportunity to present his cases at that hearing.
3. The Court also found that the AAT had applied the correct principles in determining that an extension of time should not been granted as the AAT had given sufficient attention to the substantive merits of the taxpayer’s case and that in the circumstances it was reasonable for the AAT to conclude that an arguable case had not been made out.
4. Finally, the Court found that contrary to the taxpayer’s contention, the AAT had given proper and due consideration to the issue of the prejudice the taxpayer would suffer if an extension of time was not granted.
5. In this regard, the Court also found that the AAT had correctly stated that the taxpayer had lost the right to have an independent merits review many years ago and that the evidence before the AAT pointed to the taxpayer “having rested on his rights or simply ignored his income tax liabilities” following [the] issue by the Commissioner of his objection decision”.

(Benjamin v FCT [2016] FCA 1157, Federal Court, Davies J, 23 September 2016.)

[LTN 185, 23/9/16]