The ATO on Tue 21.1.2014, released a Decision Impact Statement on the Full Federal Court’s decision in FCT v Cancer and Bowel Research Association Inc as Trustee for the Cancer and Bowel Research Trust [2013] FCAFC 140.
In that case, the Full Court had unanimously dismissed the Commissioner’s appeal from a “decision” of the AAT to remit to the ATO for reconsideration the objection decision in respect of the revocation of the charitable institution status of an entity. Before the Full Court, the Commissioner argued that the AAT had made a decision under s 43 of the Administrative Appeals Tribunal Act 1975 (AAT Act) that had incorrectly narrowed the application of s 426-55 of the TAA. The Full Court held the Commissioner’s appeal was incompetent as no appealable decision had been made by the AAT (only that the matter be reconsidered).
Among other things, the ATO said:
- it accepts the Full Court’s decision that the AAT had correctly exercised its power under s 42D of the AAT Act when remitting the matter to the Commissioner.
- The ATO also noted that the Full Court found that s 42D does not permit the AAT to remit a matter back to the Commissioner with a direction as to how he must reconsider the objection decision under s 426-55 of the TAA.
- Furthermore, the ATO said it accepts the Court’s view in relation to the construction of s 426-55 of the TAA ie that s 426-55 requires the condition for revocation to exist both at the date of the decision by the Commissioner to revoke and from any earlier period the Commissioner may consider to revoke the endorsement.
[LTN 13, 21/1/14]
s426-55 of the Taxation Administration Act 1953, First Schedule
426-55 Revoking endorsement
(1) The Commissioner may revoke the endorsement of an entity if:
(a) the entity is not entitled to be endorsed; or
(b) the Commissioner has required the entity under section 426-40 to provide information or a document that is relevant to its entitlement to endorsement and the entity has not provided the required information or document within the time specified in the requirement; or
(c) in the case of an entity endorsed under section 30-120 of the Income Tax Assessment Act 1997 –the entity has contravened Subdivision 30-CA of that Act (which requires the entity to ensure that certain things are stated in any receipts it issues for certain gifts).
Note: The conditions for an entity to be entitled to be endorsed are set out in:
(a) subsections 176-1(2) of the GST Act; and
(b) subsections 58PB(4) and (4A), 123C(2), 123D(2) and 123E(2) of the Fringe Benefits Tax Assessment Act 1986 ; and
(c) sections 30-120 and 50- 105 of the Income Tax Assessment Act 1997 .
(2) The revocation has effect from a day specified by the Commissioner (which may be a day before the Commissioner decided to revoke the endorsement).
(3) However, if the Commissioner revokes the endorsement because the entity is not entitled to it, the Commissioner must not specify a day before the day on which the entity first ceased to be entitled.
(4) The Commissioner must give the entity written notice if the Commissioner revokes its endorsement.
(5) The Commissioner may give the notice by way of electronic transmission. This does not limit the ways in which the Commissioner may give the notice.