The Federal Court has remitted a matter to be heard and decided again by the AAT after finding that the AAT had made an error of law amounting to a constructive failure to exercise its jurisdiction by substantially reproducing the Commissioner’s written submissions verbatim and without attribution in its reasons for its decision.
The substantiative issue in the case concerns the taxpayer’s appeal from the decision in AAT Case [2011] AATA 638, Re Thorpe and FCT. In that case, the AAT held that a taxpayer had failed to discharge the onus of proof that amended assessments to include amounts from the sale of units in a property investment were excessive. The Tribunal also affirmed the tax shortfall penalty imposed for the relevant years. The taxpayer then appealed to the Federal Court.
The taxpayer and the Commissioner filed with the Court a memorandum of consent orders which provided for the amendment of the taxpayer’s notice to appeal to include as a ground the constructive failure by the Tribunal to exercise its jurisdiction by reason of the unattributed reproduction of a substantial part of the Commissioner’s submissions.
The Court said based on the submissions from the parties, “about 95% of the reasons for [the AAT] decision comprise an unattributed reproduction of the Commissioner of Taxation’s submissions before the Tribunal”. Therefore, the Court held the extent of the unattributed reproduction was sufficient to conclude that “the Tribunal did not bring to bear its own mind on the issues before it, and so constructively failed to exercise its jurisdiction”. Accordingly, the Court ordered the appeal be allowed, and the matter remitted back to a differently constituted Tribunal to be heard and decided again with the hearing of further evidence.
(Thorpe v FCT [2012] FCA 997, Federal Court, Siopis J, 7 September 2012.)
[FJM Note: this case is similar to Palassis & Ors v FCT (No 2) [2012] FCA 955 – reported immediately above.]
[LTN 176, 11/9]