The AAT has refused to exercise its discretion to remit a 75% administrative penalty imposed on a taxpayer for unpaid taxes in relation to its failure to lodge BASs and income tax returns for multiple years.
The taxpayer was a property development company and had failed to lodge BASs for the quarters ending 31 March 2008 to 20 June 2010. In addition, it had also failed to lodge income tax returns for the year ending 2007 to 2010 inclusive.
The Commissioner issued default assessments and applied an administrative penalty of 75% of the net shortfall in taxes. The taxpayer did not challenge either the amount of tax or the imposition of the penalty, and had only sought for the AAT to review the Commissioner’s decision not to remit the penalty. Broadly, it argued that its failure to lodge the relevant returns and BASs were due to a dispute with its accountant/tax agent, which limited its access to documents.
The AAT said evidence presented indicated that the taxpayer continually failed to lodge returns on time from 2000 to 2014. It said this showed “not only an absence of reasonable care but also a lack of any genuine attempt to comply”. Further, the AAT said the taxpayer failed to show individual mitigating circumstances for its repeated failures to comply, and the excuses given were false or unproven. As a consequence, it found that the taxpayer had not discharged its onus of proof and refused to exercise its discretion to remit the penalty.
(AAT Case [2014] AATA 743, Re Dewheath Pty Ltd and FCT, AAT, Ref No 2012/5650, Letcher SM, 15 October 2014.)
[LTN 200, 16/10/14]