The Federal Court has dismissed a taxpayer’s claim to have a default assessment matter remitted to the AAT for rehearing.
In April 2012, the Commissioner issued default assessments under s167 of the ITAA 1936 to the taxpayer based on his failure to lodge returns in respect of the 2003, 2004, 2005 and 2006 income years. In total, the taxpayer’s taxable income across those 4 income years was determined to be $2,168,375. His tax liability was assessed accordingly, together with penalties and interest.
The taxpayer’s objections were disallowed and his appeal to the AAT was subsequently dismissed (he argued that he had lodged the relevant returns, but the AAT did not accept that).
The taxpayer then appealed to the Federal Court and lodged a further amended notice of appeal stating what he claimed were 4 questions of law with accompanying grounds of appeal. The taxpayer contended:
- there was no evidence for the Tribunal’s conclusion that the Commissioner had no records of him having lodged the returns;
- the Tribunal overlooked evidence;
- the Tribunal denied the taxpayer procedural fairness;
- the Tribunal denied the taxpayer a reasonable opportunity to present his case.
The Court said the taxpayer, who was self-represented, could not produce any copies of the purported returns or any notices of assessment to support that claim. The taxpayer claimed they had been accidently destroyed but the Tribunal found the Commissioner had no record of the returns being lodged. The Court said it appeared the taxpayer was not aware, until the Tribunal hearing, that he needed to file evidence as to his income and expenses for the relevant years. The taxpayer’s reliance on electronic records from the ATO (printouts from the ATO’s “Integrated Core Processing (ICP) system”) was rejected by the Court as it found that the meaning of “Received” that was applicable to the taxpayer was that default assessments had issued against him for the 4 income years in question. It did not mean that tax returns had been received from him, or on his behalf, for those years, the Court said.
The taxpayer sought to have the matter remitted to the Tribunal, differently constituted, to enable a rehearing of his application, with the opportunity for further evidence to be adduced. The Commissioner contended that the appeal was without any principled foundation and should be dismissed. The Tribunal agreed with the Commissioner and found the taxpayer’s arguments should be rejected and his further amended notice of appeal should be dismissed.
(FCT v Carr [2017] FCA 1486, Federal Court, Bromwich J, 8 December 2017.)
[LTN 237, 11/12/17; Tax Month Dec 2017]
Catchwords
TAXATION – appeal from a decision of the Administrative Appeals Tribunal under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) – where Commissioner had made default assessments of the applicant’s income tax liability – where the Tribunal affirmed the Commissioner’s decision to disallow the applicant’s objections – whether there was no evidence or it was not open for the Tribunal to find that the Commissioner had no record of the applicant having lodged the relevant tax returns – whether the Tribunal failed to exercise jurisdiction by overlooking evidence of the applicant as to the lodgment of the tax returns – where the applicant claims not to have been aware until the hearing of the onus he faced under s 167 of the Income Tax Assessment Act 1936 (Cth) in the review by the Tribunal – whether the Tribunal denied the applicant a reasonable opportunity to make his case by failing to advise the applicant that it would be a matter for him to apply for an adjournment