A taxpayer has been unsuccessful before the Full Federal Court in a matter concerning default assessments that had been issued under s 167 of the ITAA 1936 for the 1994 to 2001 income years.
In an earlier decision, the Federal Court had remitted the matter to the AAT for redetermination. The Federal Court held the taxpayer had failed to discharge the burden of proof that the assessments were excessive. The taxpayer’s central argument before the Full Federal Court was that the primary judge had mischaracterised both the substance and effect of the “concession” made before the AAT. That “concession” concerned the taxpayer’s acceptance of the Commissioner’s estimate of his income thereby leaving only the issue of the taxpayer’s depreciation claims for decision. The AAT had allowed to an extent the taxpayer’s claims for depreciation for certain items of plant and equipment used in a partnership business. It was argued that the AAT’s decision to accept the concession engaged the power and authority conferred by s 43(1) of the Administrative Appeals Tribunal Act 1975 and that the AAT was exercising a merits review as distinct from judicial power.
However, the Full Federal Court held that the reasoning and conclusions of the primary judge were “entirely correct” and dismissed the taxpayer’s appeal. It also dismissed the Commissioner’s cross-appeal against the primary judge’s orders to remit the matter to the AAT for redetermination. In doing so, it added a supplementary order to the Federal Court’s orders that “subject to any order of the Tribunal for proper cause, the remitted proceeding be heard and determined on the evidence which was before the Tribunal in the proceeding which resulted in its decision of 1 November 2012”.
(Rigoli v FCT [2014] FCAFC 29, Full Federal Court, Edmonds, Jessup and McKerracher JJ, 18 March 2014.)
[LTN 53, 19/3/14]
Catchwords from [2014] FCAFC 29
INCOME TAX – appeal from the Administrative Appeals Tribunal – objection decisions – whether the taxpayer discharged the burden of proving assessments made pursuant to s 167 were excessive within the meaning of s 14ZZK(b)(i) of the Taxation Administration Act 1953 (Cth) – taxpayer does not discharge burden of proof by merely challenging the basis upon which the assessment was based – “concession” by taxpayer does not amount to probative evidence to discharge the burden of proof – burden of proof to be discharged by proving actual taxable income to establish excessiveness of assessment under s 167 – applicant did not provide AAT with a probative foundation upon which factual conclusions could be reached
PRACTICE AND PROCEDURE – whether remittal of the proceeding to the AAT was futile – remittal of the proceeding to the AAT was expressly within the statutory discretion under s 44(4) and (5) of the Administrative Appeals Tribunal Act 1975 (Cth) – no submissions arguing against remittal were made before the primary judge – proceeding to be remitted to the AAT – proceeding to be heard and determined on the evidence before the AAT in the proceeding which resulted in the original decision.