The Federal Court has dismissed a taxpayer’s application for interlocutory injunctive relief that sought to restrain, until further order, the Commissioner from issuing amended assessments to the taxpayer. The taxpayer claimed that the Commissioner was going to apply, retrospectively, a changed view on the law relating to Overseas Banking Unit expense allocations.

The Court said the taxpayer was told, in effect, that the ATO would apply retrospectively the Commissioner’s changed view on the law concerning the allocation of OBU expenses. The Court said the issue related to what is said to be a change of policy or change of view by the Commissioner as to the accounting methodologies which are acceptable for the purpose of s 125EF of the ITAA 1936. The Court said the Commissioner proposed to issue the taxpayer with amended assessments, covering at least 5 taxation years, and that the time limit for issuing those assessments would expire at the end of February 2013 in the case of the first 2 income tax years and sometime in April 2013, insofar as the third of those taxation years is concerned. The taxpayer argued that the indication given by the Commissioner as to his change of view was in breach of the ATO practice statement PS LA 2011/27, which sets out certain procedures which the ATO is required to undertake if it changes its mind on relevant taxation issues.

The Court dismissed the taxpayer’s interlocutory application (even though the taxpayer had offered to consent to an extension of the time period for issuing the amended assessments), but granted an abridgement of time to enable the matter to come back before Edmonds J.

(Macquarie Bank Limited v FCT [2013] FCA 96, Federal Court, Griffiths J, 12 February 2013.)

[LTN 37, 25/2/13]