The AAT has determined that it has the jurisdiction to review an objection decision made by the Commissioner in relation to both amended assessments of primary tax and assessments of penalties issued to husband and wife taxpayers who were beneficiaries of a family trust. This was despite the fact that their objections to the assessments of primary tax were lodged before the actual amended assessment notifying them of the increase in their assessable income (and the resulting primary tax liability) were issued to them (following letters sent to them by the Tax Office advising them that the amended assessment were soon to be issued for undeclared income from the trust).

In finding that it had the jurisdiction to review the objection decisions against the amended assessments for primary tax, the AAT ruled that under the relevant provisions of the TAA, it clearly had the power to review an assessment and to decide whether it was excessive, and there was nothing in the TAA that suggested that a properly made objection was an essential requirement of the exercise of the AAT’s power of review. Instead, it found the AAT’s power of review centred on the Commissioner’s assessment and that this was a power to affirm, vary or set aside the assessment – independently of the validity of the events that preceded the objection decision.

(AAT Case [2013] AATA 151, Re Walters and FCT, AAT, Ref Nos 2012/4900 & 2012/4902, Forgie DP, 20 March 2013.)

[LTN 55, 21/3/13]