Bani Samuel Pty Ltd and Commissioner of Taxation (Taxation)
[2025] ARTA 2186
•17 October 2025
Bani Samuel Pty Ltd and Commissioner of Taxation (Taxation) [2025] ARTA 2186 (17 October 2025)
ReviewNumber: 2020/3816 2020/3817, 2020/3818, 2020/3819, 2020/3820, 2020/3821, 2020/3822, 2020/3823, 2020/3824, 2020/3825, 2020/3826, 2020/3827, 2020/3828, 2020/3829, 2020/3830, 2020/3831, 2024/0186, 2024/0327
Applicant:Bani Samuel Pty Ltd
Respondent: Commissioner of Taxation
Tribunal Number: 2020/3816-3831; 2024/0186; 2024/0327
Tribunal:General Member L. McBride
Place:Sydney
Date:17 October 2025
Decision:The Tribunal varies the decision under review and in substitution decides the Notice of Assessments are to be adjusted to reflect the amounts conceded by the Commissioner of Taxation (the Respondent) but otherwise affirms the Respondent’s decisions.
The matter is remitted to the Respondent to amend the assessments and the notices of penalties for the amounts conceded with the following directions:
Bani Samuel Pty Ltd (Bani Samuel) - Application 2020/3816-31
The Income Tax Assessments, and Pay-As-You-Go Withholding Penalty (PAYGW) ,
Bani Samuel: Application 2024/0186:
The Superannuation Guarantee Charge Assessments (SGC) and related penalties:
The objection decision be varied for the financial years below to allow in part Bani Samuel’s objection. The assessed salary and wages expenses of Bani Samuel are reduced by the following amounts:
(i)for the financial year ended 30 June 2014, by $18,430;
(ii)for the financial year ended 30 June 2015, by $10,376, and;
(iii)for the financial year ended 30 June 2016 by $24,494.
(a) The Respondent is to adjust the PAYGW penalty the SGC and additional SGC penalty according to the amendments set out above.
(b) In all other respects the Respondents decision is affirmed.
Application 2020/1482-4: The Income Tax Assessment and Related Penalties for Mr Samuel Attam (Mr Attam) .
(a)the objection decision be varied for the financial years below to allow in part Mr Attam’s objection. The assessed income and expenses for Mr Attam are reduced by the following amounts:
(i)for the financial year ended 30 June 2014 by $18,430,
(ii)for the financial year ended 30 June 2015 by $10,276,
(iii)for the financial year ended 30 June 2016 by $24,494.
(b)The Respondent is to adjust the amount of the penalty to reflect the above reductions.
(c)In all other respects the Respondents decision is affirmed.
....................[SGD]..................................................
General Member L. McBride
Catchwords
Catchwords- income tax – Small Business Tax Division- assessments made under s.166 of the Tax Assessment Act 1936 (Cth)- whether taxpayers had discharged their onus under s 14ZZK(b)(i)of the Taxation Administration Act 1953 (Cth)- whether evidence of the taxpayers was sufficiently reliable to discharge the onus, extraordinary lack of business records- unexplained deposits, admissibility of witness statement if witness not available for cross examination- no evidence of taxpayer ever being registered for Fringe Benefits Tax under the Frings Benefits Tax Assessment Act 1986 (Cth)- administrative penalties – penalty assessment – intentional disregard – false or misleading statements – shortfall interest charge.
Legislation
Administrative Appeals Tribunal Act 1975 (Cth) s 2A
Administrative Review Tribunal Act 2024 (Cth) ss 9, 56(1)
Administrative Review Tribunal (Consequential and Transitional Provisions No. 1) Act 2024 (Cth), Schedule 16 Part 5 s 24
Corporations Act 2001 (Cth)ss 180,181, 185, 286
Income Tax Assessment Act 1936 (Cth) ss 166,170(1), 262A
Taxation Administration Act 1953 (Cth) ss, 14ZZ, 14ZZK, Schedule 1, 280-100, 280-105, 284-75, 284-80, 284-90, 284-220,Fringe Benefits Tax Assessment Act 1986 (Cth)
The A New Tax System (Family Assistance) Act 1999 Australian Taxation Office, Administration of the false or misleading statement penalty – where there is a shortfall amount (PS LA 2012/5, 23 August 2012)
Cases
Rawson Finances Pty Ltd v Commissioner of Taxation [2013] FCAFC 26
Re Eastwin Trade Pty Ltd and Commissioner of Taxation [2017] AATA 140
ZFPR v Commissioner of Taxation (Taxation and Business) [2025] ARTA 572
Trautwein v Federal Commissioner of Taxation ( No1) (1936) 56 CLR 63
Warner v Hung (No2) [2011] FCA 1123
Melbourne Corporation v Commissioner of Taxation [2022] FCA 972
Commissioner of Taxation v Liang [2025] FCAFC 4
Reliance Finance Corporation Pty Ltd v Federal Commissioner of Taxation(2003)18 ATR 224
Hart v Commissioner of Taxation (2003) 131 FCR 203
Vu v Federal Commissioner of Taxation (2006) 63 ATR 341
Commissioner of Taxation v Ross [2021] FCA 766
Gauci v Federal Commissioner of Taxation (1975) 135 CLR 81
HWFX and Commissioner of Taxation (Taxation) [2025] ARTA 680
Imperial Bottleshops Pty Ltd v Federal Commissioner of Taxation (1991) 22 ATR 148
McPartland v Commissioner of Taxation [2025] FCAFC 23Federal Commissioner of Taxation v Dalco (1990) 168 CLR 614 at 623-624 Gashi v Federal Commissioner of Taxation (2013) 209 FCR 301
Secondary Materials
Australian Taxation Office, Administration of the false or misleading statement penalty – where there is a shortfall amount (PS LA 2012/5, 23 August 2012)
Australian Taxation Office, Penalty relating to statements: meaning of reasonable care, recklessness and intentional disregard (MT 2008/1, 12 November 2008)
Australian Taxation Office, Remission of shortfall interest charge and general interest charge for shortfall periods (PS LA 2006/8, 5 May 2008)
DR IB 2019/1Small Business Taxation Division of the AATStatement of Reasons
The Amended Statement of Facts, Issues and Contentions dated 28 May 2024, filed on behalf of Bani Samuel, the Applicant, in matters 2020/381631 and 2020/0186, summarised the issues the Tribunal was required to consider, which are as follows:
“This proceeding concerns the following matters:
(a)Bani Samuel’s liability to income tax for the financial years ending 30 June 2014, 2015 and 2016 (the Relevant Years);
(b)Bani Samuel’s liability to pay net amounts for the tax periods falling between 1 October 2013 and 30 June 2016 (the Relevant Tax Periods);
(c)Bani Samuel’s liability to administrative penalties in respect of:
(i) (i) its liability to income tax for the Relevant Years;
(ii) (ii) its liability to pay net amounts for the Relevant Tax Periods;
(iii) (iii) its failure to withhold amounts under the Pay As You Go Withholding regime established by the Taxation Administration Act 1953 (Cth) (Administration Act)”
(iv) Bani Samuel’s liability to the Superannuation Guarantee Charge in respect of the Relevant Tax Periods.
The Statement of Facts, Issues and Contentions dated 28 May 2024, filed on behalf of Mr Samuel Attam (Mr Attam), the Applicant in proceedings 2020/1482-4,summarised the issues the Tribunal was required to consider in these proceedings as follows:
“This proceeding concerns the following matters:
(a)Samuel Attam’s liability to income tax for the years ending 30 June 2014, 2015 and 2016 (the Relevant Years); and
(b)Samuel Attam’s liability to administrative penalties in respect of his liability to income tax for the Relevant Years.”
BACKGROUND TO THESE PROCEEDINGS
The Tribunal notes that the Application of Mr Attam was filed in the Tribunal on 13 March 2020. The Application of Bani Samuel was filed in the Tribunal on 25 June 2020. The Application in relation to Bani Samuel’s Superannuation Guarantee charge (SGC) and SGC penalties was filed in the Tribunal on 11 January 2024.
The Applications were filed in the Small Business Taxation Division of the AAT. This Division was created in 2019 as part of the broader government policy to improve access to justice for small business appealing the outcome of a dispute with the ATO. Under that policy the Commissioner of Taxation issued DR IB 2019/1. That policy document provided:
Where the ATO engages an external legal service provider, and the taxpayer does not have equal representation then the ATO will provide to the taxpayer funding for equivalent legal representation.
The amount of funding will be equal to the taxpayers’ reasonable costs of it's legal practitioners. The reasonable costs will be calculated consistent with the calculation of reasonable costs already paid by the ATO under the ATO’s Test Case Litigation program.
The Applicants were the beneficiaries of this policy. Mr Adam Ahmed and Mr David Gordon of Amhed & Co were engaged by the Applicants to prepare substantial evidence for use in these proceedings. At the hearing, the Applicants were represented by Mr Diaz of counsel. The material filed in the proceedings by the Applicants was voluminous. It was evident an enormous amount of time had been spent by both parties in preparation for these proceedings.
The history of the proceedings, both prior to the above referred Applications being filed in the Tribunal and during the case management of these proceedings before various Members of the Tribunal over a five-year period, was convoluted. More than 6,000 pages of material were filed in the Tribunal. Numerous extensions of the timetable for further evidence and submissions to be filed were granted to the Applicants. The Applicants and their solicitors were given every opportunity to put on all material that would assist the Applicants to meet the case they had to answer, that is, the statutory requirements imposed on the Applicants to discharge the burden of proof imposed by section 14ZZK of the Taxation Administration Act 1953 (Cth) (TAA).
At the commencement of the hearing, to assist the Tribunal member hearing the matter, the Respondent provided the Tribunal with a potted history of the audit of Mr Attam and Bani Samuel. As the history of the audit and the various adjustments made to the Respondent’s Amended Assessments were not disputed, the Respondent’s summary is extracted and reproduced below, as it provides a useful background to the various concessions made by the Respondent prior to the hearing of these proceedings.[1]
[1] Respondent’s History of Proceedings and Relevant Documents – 13 February 2025 the document references have been omitted.
“HISTORY OF THE PROCEEDINGS”
Bani Samuel's income tax returns
3Bani Samuel provided income tax returns to the respondent for the financial years ending 30 June on each of 2014, 2015 and 2016.
Samuel Attam's income tax returns
4Mr Attam provided income tax returns for the financial years ending 30 June on each of 2014, 2015 and 2016.
5On about 2 February 2016 and 2 March 2017 the respondent issued notices of assessment to Mr Attam.
Bani Samuel's audit
6On about 8 December 2016 the respondent commenced an audit of Bani Samuel (Bani Samuel Audit) which was initially confined to the financial year ending 30 June 2015.
7On about 16 February 2017 the scope of the audit was extended to include the financial year ending 30 June 2016 and on about 19 June 2017 the scope was again extended to include the financial year ending 30 June 2014.
8On 12 December 2017 the respondent concluded the Bani Samuel audit and reported the outcome in the Audit Position Paper.
9On 14 February 2018 a letter advising the consequent amendments arising from the audit was issued to Bani Samuel.
10On about 18 January 2018 to 21 February 2018 the respondent relevantly issued to Bani Samuel:
(a)income tax notices of amended assessment for the financial years ending 30 June on each of 2014, 2015 and 2016 (Bani Samuel Audit IT Amended Assessments)
(b)income tax notices of assessment of shortfall penalty for the financial years ending 30 June on each of 2014, 2015 and 2016 (Bani Samuel Audit IT Penalty Assessments); and
(c)a notice of shortfall penalty (Bani Samuel PAYGW Penalty Notice).
11On 16 March 2018 the respondent issued assessments to Bani Samuel for SGC for the periods from 1 October 2013 to 30 June 2016 (SGC Assessments) and SGC penalties for the periods from 1 October 2013 to 30 June 2016 (SGC Penalty Assessments).
Samuel Attam's audit
12On 23 November 2017 the respondent commenced an audit of Mr Attam for the financial years ending 30 June on each of 2014, 2015 and 2016.
13On 12 December 2017 the respondent concluded the audit of Mr Attam and reported the outcome in the Audit Position Paper.
14On 15 February 2018, a letter advising the consequent amendments arising from the audit was issued to Mr Attam.
15On 22 February 2018, as a result of the respondent amending Mr Attam's income tax assessments, the respondent issued the following notices for the financial years ending 30 June of each of 2014, 2015 and 2016:
(a)notices of amended assessment (Attam Audit IT Amended Assessments); and
(b)notices of assessment of shortfall penalty (Attam Audit IT Penalty Assessments).
Bani Samuel's objection
16On 16 April 2018 Bani Samuel lodged an objection to the Bani Samuel PAYGW Penalty Notice.
17On 23 April 2018 further objections relating to the Bani Samuel Audit IT Amended Assessments and the Bani Samuel Audit IT Penalty Assessments were lodged.
18On 12 June 2020 the respondent issued a partly favourable decision on the PAYGW Objection, and the Bani Samuel IT Objection (Bani Samuel Objection Decision), with the following outcomes:
(a)financial year ending 30 June 2014 - allowed in part;
(b)financial year ending 30 June 2015 - disallowed in full; and
(c)financial year ending 30 June 2016 - allowed in part.
19On 18 June 2020 the respondent issued notices of amended assessments to Bani Samuel for the financial years ending 30 June 2014 and 30 June.
20As a result of the partly favourable Bani Samuel Objection Decision, income tax shortfall penalties for the financial years ending 30 June 2014 and 30 June 2016 and PAYGW penalties were recalculated due to the reduction in shortfall amounts.
Samuel Attam's objection
21On 23 April 2018 Mr Attam objected to the Attam Audit IT Amended Assessments and Attam Audit IT Penalty Assessments (Attam Objection).
22On 21 January 2020 the respondent completed the Attam Objection and issued to Mr Attam the reasons for the objection decision (Attam Objection Decision), with the following outcomes:
(a)financial year ended 30 June 2014 - allowed in part;
(b)financial year ended 30 June 2015 - allowed in part; and
(c)financial year ended 30 June 2016 - disallowed in full.
23On 29 January 2020 the respondent issued further notices of amended assessments for the financial years ending 30 June on each 2014 and 2015 (Attam Objection IT Amended Assessments).
24As a result of the Attam IT Objection Amended Assessments, relevant income tax shortfall penalties were recalculated due to the reduction in shortfall amounts.
Bani Samuel's SGC objection
25On 14 May 2018 Bani Samuel made an objection to the SGC assessments (SGC Objection).
26On 8 December 2023 the respondent issued the partly favourable decision on Bani Samuel's SGC Objection and on 15 December 2023 the respondent issued:
(a)Notices of amended assessment of superannuation guarantee charge for the periods from 1 July 2013 to 30 June 2013 (SGC Amended Assessments); and
(b)Notices advising the superannuation guarantee additional charge had reduced for the periods from 1 July 2013 to 30 June 2016 (SGC Amended Penalty Assessments).
Samuel Attam's application to the Tribunal
27On 13 March 2020 Mr Attam applied to the Administrative Review Tribunal ( AAT) for a review of the Attam Objection Decision in respect of his income tax and penalties. By the Administrative Review Tribunal (Consequential and Transitional Provisions No 1) Act 2024 (Cth) schedule 16 transitional provision’s part 5 proceedings in progress item 24 the proceeding before the AAT must be continued and finalised by this Tribunal in a manner that this Tribunal considers is efficient and fair and as far as possible under the ART Act.
Bani Samuel's application to the Tribunal
28On 25 June 2020 Bani Samuel applied to the AAT for a review of the Bani Samuel Objection Decision in respect of the income tax, income tax shortfall penalties and the failure to withhold PAYGW penalties on the basis that it was incorrect and should have been allowed in full. That application must be continued and finalised by this Tribunal.
29The Bani Samuel audit and objection also considered Bani Samuel's goods and services tax reported (net amount) obligations and amended assessments (which included related penalties) were issued. These aspects are no longer in issue for the present review before the Tribunal.
Bani Samuel's SGC application to the Tribunal
30On 11 January 2024 Bani Samuel applied to the AAT for a review of the SGC Objection decision in respect of the SGC and SGC penalties. That application must be continued and finalised by this Tribunal.
ASSESSMENTS IN DISPUTE
31The respondent changed the following notice, assessments or amended assessments as a result of the Objection Decisions (Notice and Assessments in Dispute).
32Income tax amended assessments issued to Bani Samuel for each of the financial years ended 30 June 2014, 30 June 2015 and 30 June 2016 (Bani Samuel IT Amended Assessments);
33Income tax shortfall penalties issued to Bani Samuel for each of the financial years ended 30 June 2014, 30 June 2015 and 30 June 2016; income (Bani Samuel IT Shortfall Penalty Notices);
34Shortfall penalties issued to Bani Samuel for failing to withhold Pay As You Go Withholdings for the periods from 1 July 2013 to 30 June 2016 (Bani Samuel PAYGW Penalty Assessments);
35Superannuation Guarantee Charge assessments issued to Bani Samuel for the periods from 1 July 2013 to 30 June 2016 (Bani Samuel SGC Amended Assessments);
36Superannuation Guarantee Charge Penalty assessments issued to Bani Samuel for the periods from 1 July 2013 to 30 June 2016 (Bani Samuel SGC Penalty Amended Assessments);
37Income tax amended assessments issued to Mr Attam for each of the financial years ended 30 June 2014, 30 June 2015 and 30 June 2016 (Attam IT Amended Assessments);and
38Income tax shortfall penalties issued to Mr Attam for each of the financial years “ended 30 June 2014, 30 June 2015 and 30 June 2016 (Attam IT Shortfall Penalty Assessments).”
Concessions Made by the Respondent after the Applicants commenced proceedings in the Tribunal under Part IVC TAA
During the course of these proceedings, the Respondent made further concessions as a result of the evidence filed by the Applicants to substantiate the contentions made in the Applicants’ Amended Statement of Facts, Issued and Contention dated 25 July 2024.
At the end of the second day of the hearing, the Tribunal Member asked the Respondent to clarify its position in respect of the concessions referred to in paragraph [8] above. The Member asked the Respondent the following question:[2]
“The decision before me is the objection decision. There have been some concessions made, I assume, on the evidence filed in these proceedings and before cross examination. You might like to get some instructions on whether you still agree that those concessions were appropriately made because they are not a formal position. You may want to reconsider those concessions.”
[2] At transcript P-189 [17]-[23].
On the final day of the hearing, the Respondent’s counsel, in answer to the above question from the Tribunal, provided the following answers[3]:
“The power to review is to review assessments that have been issued… so you are really looking at the most recent assessments….
…so it's those amended assessments that arise from the objection decision and notices of penalty….I can explain to you that the Respondent’s view has been to look at the evidence that was presented, that's the hard documents…
The contemporaneous documents including bank statements and assessed what should be the position. So, it hasn't really been built on what witnesses have indicated they might say, whether they came up to scratch or not, but it has been based upon another review of the documents that are compiled. So, it wasn't the kind of concession that the Commissioner thought he could walk back [from],… it's still on the evidence. We made concessions on documentary evidence. We think it would be the correct or preferable decision to make those concessions at the conclusion of this hearing.
… in the concessions document, if you are minded to make a concession the Respondent has suggested, we have given a form of words that would appear in your order and that order of this Tribunal would then be the direction to the Respondent to make further amended assessments because that will have a trickledown effect.”
[3] At transcript P-245 [.37] - [.43], P -244 [.15]-[.23], [.44]-[.47], P-245 [.1]-[.2].
In the Respondent’s Amended Responsive Statement of Facts, Issues and Contentions dated 27 June 2024 at [28][4], it articulated its position in respect of the concessions as follows:
“Save as identified below, the Respondent joins issue with the Applicant on each and every one of its contentions and says:
“Pursuant to section 14ZZK(b) of the TAA, on an application for review of a reviewable objection decision, the Applicant has the burden of proving that the relevant assessments are excessive or otherwise incorrect and what the assessments should have been” (citing Bosanac v Commissioner of Taxation [2019] FCAFC 116)”
‘“unless expressly admitted, the Respondent puts the applicant to proof of all facts set out in the Applicants SFIC”
“The Respondent contends that, save for the concessions expressly made, each of the amended assessments and penalty assessments set out at paragraph 54-57A in the Applicants SFIC are not excessive.”
[4] TB 2106.
Before dealing with the closing submissions of the parties, it is worth reiterating the well settled position that the Respondent does not bear the responsibility of sustaining the assessments issued by him. Under s 166 of ITAA 1936, the Respondent must make an assessment of the amount of taxable income of a taxpayer, the amount of tax payable thereon from the returns, and from any other information in the Respondent’s possession. The Respondent’s is not required to advance a positive case.[5] (emphasis added)
[5] See Vu v Federal Commissioner of Taxation (2006) 63 ATR 341; Galea v Federal Commissioner of Taxation (1990) 21 ATR 1108 at 1116 per Hill J; Federal Commissioner of Taxation v Dalco (1990) 168 CLR 614 at 623-624 per Brennan J; Gashi v Federal Commissioner of Taxation (2013) 209 FCR 301 at [61].
If the Applicants cannot satisfy the Tribunal that the assessments issued by the Respondent to them were excessive, the Tribunal must dismiss the application for review “irrespective of the Tribunal being satisfied or not satisfied that the facts as found by the Tribunal give rise to the amount of the liability in the impugned decision”[6]. This is because s 14ZZK(b)(i) gives rise to what has been described as “a rebuttable presumption of law that an assessment is not excessive”[7]. Assessments made by the Respondent are “prima facie right” and “remain right” until the taxpayer shows they are “wrong”.[8]
[6] Re Eastwin Trade Pty Ltd and Commissioner of Taxation [2017] AATA 140 at [79] (per SM Taylor SC) citing Rawson Finances Pty Ltd v Commissioner of Taxation [2013] FCAFC 26; at [111] (per Jagot J, as her Honour then was).
[7] McCormack v Federal Commissioner of Taxation (1979) 143 CLR 284 at 314 (per Jacobs J).
[8] Trautwein v Federal Commissioner of Taxation (No 1) (1936) 56 CLR 63 at 88 (per Latham CJ).
The Respondent is under no obligation to tender evidence in support of his assessments[9]. To persuade the Tribunal that the assessments are excessive or otherwise incorrect, the Applicants must identify a coherent factual and legal position and persuade the Tribunal that their position is correct[10].
[9] Gauci v Federal Commissionerof Taxation (1975) 8 ALR 155 at 160 (per Mason J).
[10] Warner v Hung (No 2) [2011] FCA 1123).
The Closing Position of the Parties
The Respondent contended that it had made appropriate concessions, which were set out in the Respondent’s Responsive Statement of Facts, Issues and Contentions, and the Tribunal should find there were no further concessions that were appropriate[11].
[11] TB 2106, at pp. 2112, 2115, 2118, 2122, 2123, 2125, 2128.
The Applicants contended the Tribunal should find that Mr Attam’s assessable income for the year ended 30 June 2014 ought to be reduced by $19,500 and Bani Samuel’s liability to PAYGW, administrative penalty, SCG, and related penalty should be reduced accordingly.
That the amount Bani Samuel paid towards Mr Attam’s private expenses for the year ended 30 June 2014 ought to be reduced by $4,964, and that Bani Samuel’s liability to PAYGW, administrative penalty, SCG, and related penalty should be reduced accordingly.
That the unexplained payments included in Mr Attam’s assessable income for the year ended 30 June 2015 ought to be reduced by $25,550, and that Bani Samuel’s liability to PAYGW, administrative penalty, SCG, and related penalty should be reduced accordingly.
That the amount Bani Samuel paid towards Mr Attam’s private expenses for the income year ended 30 June 2015 ought to be reduced by $10,624, and that Bani Samuel’s PAYGW, administrative penalty, SCG, and related penalty should be reduced accordingly.
That the unexplained payments included in Mr Attam’s assessable income for the year ended 30 June 2016 ought to be reduced by $6,786, and that Bani Samuel’s liability to PAYGW, administrative penalty, SCG, and related penalty should be reduced accordingly.
That Mr Attam and his wife, Ms Siti Ruqaiyah Talah (Siti Talah), did not receive unexplained deposits into their joint account in the year ended 30 June 2016. That no deposits were made into Mr Attam’s wife’s account. The unexplained payments of $127,681 included in Mr Attam’s assessable income had been overstated by $8,450. That amount was paid into the Commonwealth Bank account only in the name of Siti Talah. Consequently, Mr Attam’s assessable income for the year ended 30 June 2016 ought to be reduced by $8,450, and Bani Samuel’s liability to PAYGW, administrative penalty, SCG, and related penalty should be reduced accordingly.
That the 2016 unexplained cash deposits of $24,465 paid into Mr Attam and Ms Siti Talah’s joint bank account were overstated by $16,815. Cash deposits of only $7,650 were deposited into Mr Attam and Ms Siti Talah’s joint account. Consequently, Mr Attam’s assessable income for the year ended 30 June 2016 ought to be reduced by $16,815, and Bani Samuel’s liability to PAYGW, administrative penalty, SCG, and related penalty should be reduced accordingly.
That the 2016 unexplained payments made from the Bani Samuel “Butcher business account” for Mr Attam’s private expenses were overstated by $12,023.30. Therefore, Mr Attam’s assessable income for the year ended 30 June 2016 ought to be reduced by $12,023.30, and Bani Samuel’s liability to PAYGW, administrative penalty, SCG, and related penalty should be reduced accordingly.
Personal Background
Mr Attam was born in Selangor, Malaysia in 1971. He attended the State University of World Languages in Uzbekistan and studied Russian literature. In 1996, Mr Attam moved to Western Australia and worked in an abattoir for a year. He then worked as a postman with Australia Post for the next three years. In 2000, Mr. Attam ceased working as a postman and began working as a courier in WA. He commenced the courier business as a sole trader in or around 2000.
By 2004, Mr Attam had married Ms Siti Talah. The couple resided in Western Australia. Around the same period, Mr Attam and his father-in-law, Mr Welna Penny had joined an Islamic community associated with Ustaz Ashaari Muhammed’s “Global Ikhwan”. One of the purposes of Global Ikhwan was to expand the following of Muslim groups internationally.
In August 2004, Mr Attam and Mr Penny incorporated a company then known as Rufaqa Pty Ltd. Rufaga Pty Ltd subsequently changed its name to Bani Samuel. At the time, it incorporated the directors of Bani Samuel, including Mr Attam and Mr Penny. On 17 August 2007, Mr Penny resigned as a director, and his shares were transferred to Mr. Attam.
In 2007, Mr Attam bought his courier business to an end and began using Bani Samuel to run a similar courier business. During these proceedings, the courier activities of Bani Samuel were referred to as the Courier Business. The evidence was that until 2007, Bani Samuel was a dormant company, that is, it carried on no business.
Between August 2013 and January 2014, Bani Samuel provided property services to an unrelated company, Kuh Property Services Pty Ltd.
Mr Attam’s evidence was that in late January 2014, Bani Samuel purchased a butcher shop in Bentley, WA. During the proceedings, this butcher shop was referred to as the Bentley Butcher Shop. The income from this business was referred to in the proceedings as the Butcher Business. The butcher business sold meats slaughtered according to Islamic law; consequently, the Bentley Butcher Business was a speciality business that sold Halal meats. The butcher shop was purchased for $50,000 from Mustini Holdings Pty Ltd, an unrelated third party.
The evidence before the Tribunal was that until around June or July 2015, Mr Atttam worked in the Bentley Butcher shop in WA. In or around June 2015, Mr Attam, his wife and 7 children moved to Wyong Creek, in the Hunter Valley in NSW.
Mr Attam and his family moved to NSW to work for Global Ikhwan on a farm known as Dato Ibu Barkah. Mr Attam’s evidence was that the day-to-day management of the Bentley Butcher Business was transferred to Ms Fauziah Ariffin, also a member of Global Ikwan, before Mr Attam and his family moved to NSW.
Ms Fauziah Ariffin gave evidence that in around February 2015, the Chairman of GBIS, Ms Hatijah (deceased), proposed to buy the Bentley Halal Butcher business from Mr Attam and sent Ms Arriffin from Sydney “to investigate and look over the business.” At that time, Samuel Attam and his family were running the business[12] When asked by the Applicants’ counsel “who were the people you are referring to”, Ms Arriffin told the Tribunal she was referring to “Mr Attam’s Uncle and Aunt” one of Mr Attam’s sons, and three other members of Mr Attam’s family. Ms Ariffin’s evidence was she could not remember their names[13].
[12] Exhibit E [3].
[13] trans P-175 [.31]-[.32], [.34]-[.35], trans P-176 [.1]-[.9]
In the financial year ending 30 June 2015, Bani Samuel purchased and then operated a cleaning service business in WA, trading as Professional Maid. This business was referred to in the hearing as the Cleaning Business.
Mr Welan Penny, Mr Attam’s father-in-law, was killed in a car accident in 2016.
Mr Attam was the Director and shareholder (either directly or through other companies he controlled), in the following companies:
(i)Bani Samuel Pty Ltd
(ii)Livexport Pty Ltd, (the shareholder was Pantai Bharu Group Pty Ltd)
(iii)Pantai Bharu Group Pty Ltd
(iv)Pantai Bhru Holidays and Tours Pty Ltd (Director and Secretary)
(v) GISB Australia Pty Ltd * (see paragraph [36] below)
(vi)IM International Pty Ltd
The trading names for GISB Australia Pty Ltd were: Ikhwan Café Sydney, BUTCHER IKHWAN AUSTRALIA, IKHWAN CATERING, Ikhwan Café Sydney, Nur Muhammad Café Sydney, Ikhwan Catering, butcher ikhwan australia. (the upper and lower case are the companies’ registered trading names.
While resident of Australia, Mr Attam had been involved with at least a dozen companies as a director, shareholder, or both, throughout the years in issue.
At the time of the hearing Mr Attam resided in Selangor, Malaysia. Mr Attam’s wife and his seven children remained living in Australia. The Tribunal asked Mr Attam’s counsel whether Mr Attam intended to return to Australia and was informed “my instructions are that Mr Attam is coming back to Australia, he intends to pay, but he says the pace in which he can pay the debt will be affected by affordability”[14]
[14] Trans P- 242 [.1]-[.14].
Issue to be decided by the Tribunal
The first issue for the Tribunal was to determine, on the evidence before it, whether the Respondent’s Further Amended Assessments for the Applicants were excessive or otherwise incorrect. This required the Applicants to prove the correct amount of taxable income and the tax correctly payable on that income in each of the financial years ending 30 June 2014, 30 June 2015 and 30 June 2016.
The second issue was to consider whether the Respondent’s Amended Assessments of the Applicants’ liability to administrative penalties for shortfall amounts were excessive or otherwise incorrect, having been made on the basis the Applicants’ conduct amounted to intentional disregard of a taxation law.
The third issue was to consider whether the Respondent’s Amended Assessment of Bani Samuel’s liability to administrative penalties for failing to withhold PAYG was excessive.
The fourth issue was whether the Applicants’ liability to administrative penalties should be further remitted pursuant to s 298-20 Schedule 1 to the Taxation Administrative Act 1953 (TAA).
The fifth issue was whether the SCG and SGC penalty assessments for Bani Samuel failing to withhold Superannuation were excessive.
The sixth issue was whether the Applicants’ liability to SCG penalties should be further remitted.
Concessions
At paragraphs [31], [34], [39], [41], [46], [50] [54], [60], [65], and [76][15] of the Respondent’s Amended Responsive Statement of Facts, Issues and Contentions, the Respondent made further concessions for each of the 2014, 2015, and 2016 income years. The concessions made by the Respondent were limited to those set out in the above paragraphs. The follow-on consequences for the Further Amended Assessments and Penalty Assessments, were addressed by the Respondent in the “Proposed Orders for the Treatment of Concessions” dated 13 February 2025. The Respondent’s tables setting out the Concessions arising from the Applicants Statements of Facts, Issues and Contentions are annexed at “A” to these reasons.
[15] TB 2112,- 2118, 2120, -2123
The Respondent, in their Responsive Statement of Facts, Issues and Contentions and in their opening submissions, made it abundantly clear that, with the exception of the concessions expressly referred to in the Respondent’s Amended Responsive Statement of Facts, Issues and Contentions, the Respondent put the Applicant to proof of all facts set out by the Applicants in the Applicants’ Amended Statement of Facts, Issues and Contentions.
The Relevant Statutory Provisions
The relevant legislative provisions are uncontroversial and are set out below for completeness. The Further Amended Assessments issued by the Respondent were s166 assessments, not assessments issued under s 167. The question of whether that makes any difference to the task before the Tribunal is dealt with at [143] below.
Section 166 of the Income Tax Assessment Act1936 (Cth) (ITAA36) is in the following terms:
Assessment
From the returns, and from any other information in the Commissioner's possession, or from any one or more of these sources, the Commissioner must make an assessment of:
(a)the amount of the taxable income (or that there is no taxable income) of any taxpayer; and
(b)the amount of the tax payable thereon (or that no tax is payable); and
(c)the total of the taxpayer's tax offset refunds (or that the taxpayer can get no such refunds).
Section 14ZZK of the Taxation Administration Act 1953 (Cth) (TAA) is in the following terms;
Grounds of objection and burden of proof
On an application for review of a reviewable objection decision
(a)the applicant is, unless the Tribunal orders otherwise, limited to the grounds stated in the taxation objection to which the decision relates; and
(b)the applicant has the burden of proving:
(i) if the taxation decision concerned is an assessment—that the assessment is excessive or otherwise incorrect and what the assessment should have been; or
(ii) in any other case—that the taxation decision concerned should not have been made or should have been made differently.
Section 284-75 of Schedule 1 to the TAA relevantly provides as follows:
Liability to penalty
(1) You are liable to an administrative penalty if:
(a)you make a statement to the Commissioner or to an entity that is exercising powers or performing functions under a *taxation law (other than the *Excise Acts); and
(b)the statement is false or misleading in a material particular, whether because of things in it or omitted from it.
...
(5) You are not liable to an administrative penalty under subsection (1) ... for a statement that is false or misleading in a material particular if you, ... took reasonable care in connection with the making of the statement.
Section 284-90 of Schedule 1 to the TAA relevantly provides:
Base penalty amount
(1) The base penalty amount under this Subdivision is worked out using this table and subsections (1A) to (2), and section 284-224 if relevant:
Base penalty amount
Item
In this situation:
The base penalty amount is:
1
You have a *shortfall amount as a result of a statement described in subsection 284‑75(1) or (4) and the amount, or part of the amount, resulted from intentional disregard of a *taxation law (other than the *Excise Acts) by you or your agent
75% of your *shortfall amount or part
2
You have a *shortfall amount as a result of a statement described in subsection 284‑75(1) or (4) and the amount, or part of the amount, resulted from recklessness by you or your agent as to the operation of a *taxation law (other than the *Excise Acts)
50% of your *shortfall amount or part
3
You have a *shortfall amount as a result of a statement described in subsection 284‑75(1) or (4) and the amount, or part of the amount, resulted from a failure by you or your agent to take reasonable care to comply with a *taxation law (other than the *Excise Acts)
25% of your *shortfall amount or part
The power of the Commissioner to impose a Shortfall Interest Charge is contained in Division 280 of Schedule 1 of TAA. Specifically in this matter, SIC is imposed by section 280-100(1) on the additional tax arising from the amendment of a taxpayer’s income tax assessment.
Section 262A of the ITAA 36 is in the following terms:
(1) Subject to this section, a person carrying on a business must keep records that
record and explain all transactions and other acts engaged in by the person that
are relevant for any purpose of the Act.
…
(2) The records to be kept under subsection (1) include:
(a) Any documents that are relevant for the purpose of ascertaining the person’s income and expenditure; and
(b) Documents containing particulars of any election, choice, estimate,
determination or calculation made by the person under this Act and, in the
case of an estimate, determination or calculation, particulars showing the
basis on which and method by which the estimate, determination or
calculation was made.
…
(3) A person who is required by this section to keep records must:
(a) Keep the records in the English language so as to enable the records to be readily accessible and convertible into writing in the English language; and
(b) Keep the records so as to enable the person’s liability under the Act to be readily ascertained.
Section 298-20 TAA schedule 1 provides the Respondent with a discretion to remit all or part of an administrative penalty. The section is in the following terms:
Remission of penalty
(1) The Commissioner may remit all or a part of the penalty.
(2) If the Commissioner decides:
(a) not to remit the penalty; or
(b) to remit only part of the penalty;
the Commissioner must give written notice of the decision and the reasons for the decision to the entity.
(3) If:
a) the Commissioner refuses to any extent to remit an amount of penalty; and
(b) the amount of penalty payable after the refusal is more than 2 penalty units; and
(c) the entity is dissatisfied with the decision;
the entity may object against the decision in the manner set out in Part IVC.
The Corporations Act 2001 (Cth) (CA) Chapter 2D Part 2d.1, sets out the powers and duties of directors. It is trite but bears repeating for the benefit of the Applicant, Mr Attam, that a corporation is a separate, independent legal entity, distinct from its members, employees and agents. Bani Samuel was a proprietary company with one director during the relevant period, Mr Attam. Directors owe certain duties to the company, breaches of which can attract both civil and criminal penalties. Directors’ duties are set out under the Corporations Act and in common law principles.
Sections 180, 181, 185 of the Corporations Act are in the following terms
180 Care and diligence—civil obligation only
Care and diligence—directors and other officers
(1) A director or other officer of a corporation must exercise their powers and discharge their duties with the degree of care and diligence that a reasonable person would exercise if they:
(a) were a director or officer of a corporation in the corporation’s circumstances; and
(b) occupied the office held by, and had the same responsibilities within the corporation as, the director or officer.
Business judgment rule
(2) A director or other officer of a corporation who makes a business judgment is taken to meet the requirements of subsection (1), and their equivalent duties at common law and in equity, in respect of the judgment if they:
(a) make the judgment in good faith for a proper purpose; and
(b) do not have a material personal interest in the subject matter of the judgment; and
(c) inform themselves about the subject matter of the judgment to the extent they reasonably believe to be appropriate; and
(d) rationally believe that the judgment is in the best interests of the corporation.
The director’s or officer’s belief that the judgment is in the best interests of the corporation is a rational one unless the belief is one that no reasonable person in that position would hold.
(3) In this section:
“business judgment” means any decision to take or not take action in respect of a matter relevant to the business operations of the corporation.
181 Good faith—civil obligations
Good faith—directors and other officers
(1) A director or other officer of a corporation must exercise their powers and discharge their duties:
(a) in good faith in the best interests of the corporation; and
(b) for a proper purpose.
(2) A person who is involved in a contravention of subsection (1) contravenes this subsection.
185 Interaction of sections 180 to 184 with other laws etc.
Sections 180 to 184:
(a) have effect in addition to, and not in derogation of, any rule of law relating to the duty or liability of a person because of their office or employment in relation to a corporation; and
(b) do not prevent the commencement of civil proceedings for a breach of a duty or in respect of a liability referred to in paragraph (a).
This section does not apply to subsections 180(2) and (3) to the extent to which they operate on the duties at common law and in equity that are equivalent to the requirements of subsection 180(1)”.
The Corporations Act also imposes obligations on Directors to prepare or cause to be prepared and maintain accurate financial records. Section 286 is in the following terms:
Obligation to keep financial records
(1) A company, registered scheme, registrable superannuation entity or disclosing entity must keep written financial records that:
(a) correctly record and explain its transactions and financial position and performance; and
(b)would enable true and fair financial statements to be prepared and audited.
(2) The financial records must be retained for 7 years after the transactions covered by the records are completed ( emphasis added).
(3) A person commits an offence if the person contravenes subsection (1) or (2).
Strict liability offence
(4) A person commits an offence of strict liability if the person contravenes subsection (1) or (2).( emphasis added)
In essence, there are certain powers and responsibilities of a director that cannot be delegated and must be exercised by the director. Some of the non-delegable duties include a duty to be actively involved in both the creation and review of financial information, ensuring that it accurately reflects the company’s financial position and complies with all relevant legal and regulatory requirements. That includes compliance with the requirements of the Corporations Act and the Income Tax Assessment Acts, among other relevant regulations (emphasis added)
Directors of a company have a legal duty to understand the company’s financial statements and maintain proper financial records. Directors must not only understand the content of the financial statement but also the systems and processes used to create them. It is a core requirement that directors actively read and understand financial statements. This involves more than just checking for errors; directors need to ensure the information is accurate and consistent with their knowledge of the company’s affairs. (emphasis added)
While a director may outsource some tasks, it is the director’s responsibility to ensure the company keeps accurate and complete financial records for seven years after the transactions covered by the records are completed. The records must clearly explain the company’s financial transactions and position. The records should be sufficient to allow for the preparation of true and fair financial statements. Failure to maintain proper records can lead to personal liability for directors, as well as legal sanctions. In short directors of the company have a legal duty to not only understand the company’s financial statements but retain the company records for the required statutory period under s 286 of the Corporations Act. (emphasis added)
Obligations imposed under the Corporations Act are not mutually exclusive from obligations imposed under the ITAA36 and ITAA97 or the TAA. Small propriety companies are not a piggy bank for directors to dip into to pay for personal expenses, by way of “repayment” of undocumented loans previously made by the director to the company. The Tribunal accepts counsel for the Applicants’ submission that, when dealing with small private businesses, it is incumbent on the Tribunal to have regard to how small business operates and not place unrealistic expectations as to the manner in which they conduct themselves. However, “...where, as here, informality is present, much can depend on the credibility one affords the accounts given by participants and, where they exist, representations in business records created under their supervision or with their approval[16].
[16] Melbourne Corporation v Commissioner of Taxation [2022] FCA 972 Logan J at [44]-[47].
Informality of arrangements between Mr Attam and Bani Samuel does not excuse an apparent complete ignorance of the statutory obligations imposed on Mr Attam to be actively engaged in the creation and maintenance of accurate financial records. Without these records, it would be impossible for a potential purchaser, like Global Ikwan, to accurately assess Bani Samuel’s financial position, or for Mr Attam, in his capacity as the sole director of Bani Samuel, to comply with the relevant legal and statutory requirements imposed by the Corporations Act , the ITAA36 the ITAA 97, and the various regulations made under those Statutes.
The Onus of Proof
The central question for the Tribunal in reconsidering the Respondent’s position is whether, on the evidence before the Tribunal, the Applicants’ have discharged their onus of proof. For the Applicants to do that, they are required to demonstrate, to the civil standard, that the Respondent’s Amended Assessments were excessive or otherwise incorrect, and what the assessments should have been for the purposes of the TAA.
Section 14ZZK (b) TAA was recently considered by the Full Federal Court in McPartland v Commissioner of Taxation [2025] 25 FCAFC. The Full Federal Court when dealing with the issue of a taxpayer’s onus stated at [12] and [15]:
[12] “As will be apparent from the language of the sub-section, s 14ZZK(b)(i) of the TAA requires the appellants to have proved in the Tribunal that the assessments were excessive or otherwise incorrect and what the assessment should have been: see Bosanac v Commissioner of Taxation at [47],Buzadzic v Commissioner of Taxation ([2024] FCAFC 50 at [7]-[8]); Gashi v Federal Commission of Taxation ((2013) 209 FCR 301 at [61]-[63] ) (Gashi); Rigoli v Federal Commissioner of Taxation (2014) 96 ATR 19 at [26] .A careful distillation of the nature of the onus of proof and the principles is set out by Derrington J in Commissioner of Taxation v Ross (2021) 174 ALD 77 at [46]-[48]”.
[15] “The taxpayer bears the onus on all issues, save where the commissioner and taxpayer agree to confine the issues to a particular point of law or fact, in which case the taxpayer bears the onus in respect of those: Dalco at 624. No particular method by which the taxpayer must discharge their burden is defined or specified. The method will vary according to the circumstances of the case: Gashi at [63], citing Dalco at 624”.
Taxpayers bear the burden of proving, on the balance of probabilities, the two limbs of s 14ZZK (b) of the TAA; that the assessment is excessive or otherwise incorrect, and what the assessment should have been.
The Applicants were required to do more than, through a series of spread sheets, cross referencing bank statements point to some miscalculation by the Commissioner. The bank and credit card statements in evidence, and the recreated spreadsheets from those source documents, showed an intermingling of cash transactions and EFT deposits for personal and business purposes. There was no evidence the Applicants had cotemporaneous records that attempted to reconcile payments that were for personal expenditure and those that related to the various businesses conducted by Mr Attam. In the circumstances, it was difficult not to infer that at least part of the expenditure was personal expenditure.
“Nor is it permissible for the Applicant’s to merely assert that the matters which led the Commissioner in the course of the audit to be dissatisfied with the disclosed income of the Applicant are the issues in the Tribunal, so that the evidence is confined to these sources of funds alone”.[17]
[17] ZFPR v Commissioner [2025] ARTA 572 at [53]
During these proceedings, the Respondent made further concessions based on the documentary evidence filed by the Applicants to substantiate the factual matters set out in the Applicants’ Amended Statement of Fact, Issues and Contentions. Other than these concessions, the Respondent’s Amended Responsive Statement of Facts, Issues and Contentions dated 27 June 2024, at [ 28], makes it abundantly clear the Commissioner did not agree to narrow the issues in dispute and, unless expressly admitted, put the Applicant to proof of all facts set out in the Applicants’ Amended Statement of Facts, Issues and Contentions and Statement of Facts, Issues and Contentions both dated 28 May 2024.
The essence of the Respondent’s case was that the evidence before the Tribunal did not disclose the basis on which various deposits were made into the Applicants’ bank accounts and or to the Applicants credit cards. The Respondent put the Applicants to proof that these deposits did not represent amounts of ordinary income to the Applicants (see Gauci per Mason J at [89])
As summarised at [12]-[14] above, the authorities binding on this Tribunal make it abundantly clear the Respondent is not required to prove anything[18]. When considering the question of onus in relation to bank deposits from an unknown origin, the Full Court of the Federal Court in Commissioner of Taxation v Laing [2025] FCAFC 4 stated at [41]:
“…it was for the taxpayers to disprove the basis of that assessment by establishing the relevant facts. It was not for the Commissioner to posit or prove a basis from which it might be inferred that the Deposits were income but for the taxpayers to place the relevant facts before the Tribunal.”
[18] Trautwein v Federal Commissioner of Taxation (1936) 56 CLR, McPartland v Commissioner of Taxation [2025] 25 FCAFC.
The question for the Tribunal is whether the Applicants’ evidence is enough to satisfy the Tribunal that it is more probable than not that the Amended Assessments were excessive, and what the Amended Assessments should have been. In Ross v Commissioner of Taxation (2021) 174 ALD 77 at [38] Derrington J summarised the effect of s.166 as, “unequivocally, an evidence-based calculation of a person’s taxable income, tax payable thereon, and tax offset refunds”.
The only task for the Tribunal in these proceedings was to analyse the evidence led by the Applicants and determine whether it was more probable than not that the Amended Assessments were excessive, and what the assessments should have been.
Regrettably, in the case of Bani Samuel, the evidence was oral evidence given by Mr Attam and Ms Affrin, incomplete cash register ‘PUL’ print outs, incomplete ‘cash books’ and unexplained deposits into various bank and credit card accounts rather than proper records retained in the course of Bani Samuel’s business. Although spreadsheets were created from Mr Attam’s bank statements and credit card statements, the source documents,
andthe narration in the source documents lacked sufficient detail to authenticate the deposit or transfer and the purpose of the transfer. In the circumstances, it was difficult for the Applicants to prove that the Amended Assessments were excessive and thereby discharge their onus.EVIDENCE BEFORE THE TRIBUNAL
The Applicants’ evidence and case comprised:
(a) Exhibit D- Statement of Samuel Attam dated 22 April 2022
(b) Exhibit G -Statement of Samuel Attam in relation to the 2014 income year dated 23 May 2024
(c) Exhibit H- Statement of Samuel Attam in relation to the 2015 income year dated 23 May 2024
(d) Exhibit I –Statement of Samuel Attam in relation to the 2016 income year dated 23 May 2024
(e) Exhibit J – Expert report of Rhys Michael O’Sullivan dated 20 November 2023
(f) Exhibit E – Statement of Ms Fauziah Affiffin dated 22 April 2022
(g) Exhibit FAS – Further Statement of Samuel Attam dated 29 July 2024
(h) Exhibit FSB – Further Statement of Samuel Attam dated 9 January 2025
(i) Exhibit FSC – Further Statement of Samuel Attam dated 7 February 2025
(j) The Applicants Statement of Facts Issues and Contentions dated 28 May 2024
(k) The Applicants Amended Statement of Facts Issues and Contentions dated 28 May 2024,
(l) The Applicants Further Amended Statement of Facts Issues and Contentions dated 25 July 2024,
(m) The Applicant’s Reply to the Respondent’s Amended Responsive statement of Facts Issues and Contentions of 27 June 2024 dated 12 July 2024
(n) The Applicants Amended Reply dated 24 July 2024,
(o) The Applicants’ written Opening submissions received 10 February 2025
(p) The Applicants’ reference from closing submissions comprising 14 pages summarising the Applicant’s Evidence with a reference to the evidence referred to during the hearing contained in 259 pages of detailed transaction lists annexed to the closing submissions. This material although filed in the Tribunal on 27 February 2025, regrettably was not received by the General Member hearing the matter until 30 April 2025.
The Respondents Evidence and Case comprises:
(a)Exhibit A - a primary bundle of T documents for case 2020\3816323813
(b)Exhibit B bundle of T documents for case 2024/0186
(c)Exhibit C bundle of T documents for case 2020/1482 through to 2144
(d)The Respondent’s Amended Responsive Statement of facts Issues and Contentions dated 27 June 2024
(e)The Respondent’s Responsive Statement of Facts Issues and Contentions dated 27 June 2024
(f)The Respondent’s written outline of submissions for hearing dated 19 February 2025
(g)The Respondent’s History of Proceedings and Relevant Documents dated 13 February 2025
(h)The Respondent’s Proposed Orders for the Treatment of Concessions at the Closing Address on 14 February 2025
(i)The Respondent’s Submission on Bani Samuel Objection Decision Tabled at Para 459 (And 544) Incorrectly Referencing the Account of Ms Talha dated 20 February 2025
THE WITNESSES
The Evidence given on the Applicants’ behalf by Mr Attam, Ms Fauziah Ariffin, and Mr Reece O’Sullivan, in both their Statements and during cross examination, is dealt with under various headings below.
The Witness Statement of Ms Hamimah Yakub
The Tribunal notes that an affidavit was provided by Ms Hamimah Yakub, dated 21 May 2024. Ms Yakub was not available to be cross examined on her witness statement. Mr Attam, in his Statement of 7 February 2025, informed the Tribunal that on or around 20 September 2024, Ms Yakub, along with other members of GISB, was sent to a prison in Malysia for “alleged child abuse associated with Global Ikhwan”. An undated report in the Malaysian Gazette annexed to Mr Attam’s Statement reported that Ms Yakub “ became the first accused to be released on bail after being detained under the Security Offences (Special Measures) Act 2012”. Mr Attam stated in his Statement at [4] that Ms Yakub’s husband had informed him Ms Yakub was “under restrictions and not allowed to communicate with others except her family”[19].
[19] Further Statement of Samuel Attam dated 7 February 2025 Exhibit FSC
The Tribunal granted leave to admit the statement for reasons of procedural fairness, and to avoid the Tribunal being asked to draw a Jones v Dunkel inference from Ms Yakub’s non-attendance.
Having considered the Statement of Ms Yakub, the Tribunal gives it little weight for several reasons. Firstly, the practice of requiring witness to be available to be cross examined on their written statements is not waived lightly, because there is always a risk that an unexamined written statement will give undue weight to that evidence. Secondly, the Tribunal was only informed on the first day of the hearing that Ms Yakub would not be available for cross examination. Mr Attam’s Statement dated 7 February 2025, was filed well out of time, and no evidence was provided to the Tribunal that any arrangements had been made with the Malaysian Court or Prison authorities to allow Ms Yakub to give her evidence from prison or once released from gaol from her home, and the Applicants had ample time to make such arrangements.
Finally, at its highest, Ms Yakub’s Witness Statement asserts that GISB made loans to Bani Samuel by way of deposits into various accounts with the ANZ Bank is of little probative value. Ms Yakub identifies various accounts held at the ANZ Bank in the names of Bani Samuel Pty t/as Bentley Halal Butcher (ending xxxx4126), Attam Samuel trading as Raust CV and the Proprietor Raust CV (account ending xxxx7444), Mr S Attam account ending 0144) and Mr S Attam (account ending 9144).
Attached to Ms Yakub’s statement is a spreadsheet marked “A”, that set out loans purportedly made by GISB to the above referenced ANZ accounts and a spreadsheet marked “B” that list money purportedly repaid to GISB Australia of part of the loans made by GISB. Ms Yakub states that to the best of her recollection the balance of the loans were forgiven by GBIS.
The descriptions in the spread sheets provide insufficient information to establish the existence of loans to Mr Attam or Bani Samuel, by way of example loans transferred to account xxxx 5126 are identified as ‘TFER Loan Fauziah”, TFER Loan GBIS, TFER Mokhta”, “TFER SEWA Butcher Hamimah Yakub”, TFER Edwin loan Mokhta”. Money deposited as loans into account ending xxxx744, were identified as TFER TAX Butcher Shuhaimee Bin”, TFER Café Sydney Shuhaimee. Money deposited allegedly as loans into account ending xxxx1044 were identified as TREF Bill Letrik Hamimah Yakub, TFER New Butcher Hamimah Yakub, Transfer Reference account ended xxxx4881. Loans deposited into account xxx 9144 were described as ANZ ATM Willeton Branch Willeton WA.
The Tribunal notes that none of the deposits into accounts in Mr Attam’s or Bani Samuel’s name are identified as a transfer to any of Bani Samuel’s businesses or to Mr Attam.
No original bank statements were attached to the spread sheet. Annexure B showed loans allegedly repaid from Mr Attam’s private accounts ended 1044 and 9144. The description identified three transfers to Shuhaimee Mohamed, described as a ‘loan repayment’ and ‘loan repayment Butcher’, three of the transfers were to GISB Australia.
The Tribunal was not persuaded that the Applicant discharged its burden of proving that Bani Samuel or Mr Zach Hussein took reasonable care in preparing the Applicant’s income tax returns for the relevant years. The reasonable care test calls upon a taxpayer to exercise the care that a reasonable person would be likely to have exercised in the circumstances of the taxpayer fulfilling their tax obligations. The Tribunal finds that the behaviour of Mr Attam was reckless, as it showed disregard or indifference to a risk that is foreseeable by a reasonable person.[64]
[64] See Hart v Commissioner of Taxation (2003) 131 FCR 203 at [43] per Hill and Hely JJ.
The Respondent may, in exercising the discretion allowed, remit the whole or any part of the administrative penalties under s. 298-20 of Schedule 1 to the TAA. The relevant question is whether remission is appropriate in the particular circumstances of the Applicant. The Respondent contended there was nothing in the evidence before the Tribunal that pointed to further remission of penalties being appropriate. The Tribunal agrees with the Respondent’s position, set out in the table in Annexure A. The Tribunal was not persuaded that any further remission was appropriate in all the circumstances, and that the Respondent ‘s decision with respect to non-remission of penalties should have been made differently: s 14ZZK(b)(ii) of the TAA.
Matter 2020/1482-4
These proceedings concern Mr Attam’s liability to income tax for the years ended 30 June 2014, 2015, and 2016, and Mr Attam’s liability to administrative penalties.
Having considered the objection decision, the witness statements of Mr Attam and Mr Attam’s oral evidence, the Tribunal finds the Respondent’s Further Amended Assessments for Mr Attam for the income years ending 30 June in 2014, 2015 and 2016 were not excessive. However, as a flow on consequence of the Respondent’s agreed concessions made because of Bani Samuel’s Amended Statement of Facts, Issues and Contentions, the Respondent will need to further amend Mr Attam’s Further Amended Assessments.
The Tribunal is not in a position, on the basis of the evidence before it, to conclude any of the amounts allegedly transferred to Mr Attam from Bani Samuel where in respect of reimbursements for expenses related to the business of Bani Samuel.
In respect of the Respondent’s Amended Assessments for the Applicant’s liability for Administrative Penalties in respect of shortfall amounts for the financial years ended 30 June 2014, 2015 and 2016, the Tribunal finds the administrative penalties are not excessive.
Mr Attam was an educated man who ran, or was involved in, a number of business and was a company director of numerous companies. It is inconceivable that he was unaware of the requirements imposed on him both personally and in his capacity as a director with respect to the preparation of company and personal income tax returns. In respect of his personal income tax returns, Mr Attam’s evidence was that he prepared these returns himself.
The Tribunal finds Mr Attam deliberately manipulated his income and made false and or misleading statements to the Respondent for the purposes of s 284-75(1). Mr Attam had access to all of the business bank accounts of Bani Samuel and his own personal bank accounts, yet he significantly underreported his taxable income in each of the 2014, 2015 and 2016 income tax years. It is difficult for the Tribunal to infer anything other than Mr Attam failed to properly disclose his income in the knowledge that it would reduce his liability to income tax. Further, it is not beyond the realms of possibility that Mr Attam was aware that, in order to take advantage of Commonwealth Government payments for low-income families he would have to significantly reduce his taxable income. In any event, whatever Mr Attam’s motive, the Tribunal finds Mr Attam intentionally disregarded a taxation law, and the penalties imposed by the Respondent were appropriate and not excessive.
There were no factors before the Tribunal nor any circumstances that warrant any remission of administrative penalties pursuant to s 298 -20 of Schedule 1 of the TAA for income tax shortfall or for failing to withhold tax, given the Tribunal finds Mr Attam intentionally disregarded a taxation law.
Conclusion
The Applicants failed to discharge the burden of proving that the Further Amended Assessments issued to them by the Respondent in respect of income tax and penalties were excessive.
ANNEXURE A
Financial Year 2014
Business Assessable
income as
assessed by the
Respondent
Applicant’s
position in
ASFIC
Difference
between
the parties
Concession
arising
from ASFIC
Courier business $162,349 $162,349 No dispute Butcher
business
$122,636 $122,636 No dispute Property
services
$81,818 $61,109 $20,709 Other
assessable
income
$31,661 None $31,661 $13,231 Assessable
income
$398,464 $346,094 $52,370 $380,034 Expenses $318,900 $318,900 No dispute $300,470 Taxable
income
$79,564 $27,194 $52,370 $79,564
Tax liability
(30%)
$23,869 $8,158 $15,711 $23,869
Business Assessable
income as
assessed by the
Respondent
Applicant’s
position in
ASFIC
Difference
between
the parties
Concession
arising
from ASFIC
Courier business $143,593 $143,593 No dispute Butcher
business
$281,702 $281,702 No dispute Cleaning
services
$5,855 $5,855 No dispute Other
assessable
income
$65,715 $0 $65,715 $55,339 Assessable
income
$496,865 $431,149 $65,715 $486,489 Expenses $420,412 $420,412 No dispute $410,036 Taxable
income
$76,453 $10,737 $65,716 $76,453
Tax liability
(30%)
$22,936 $3,221 $19,715 $22,936
Financial year ended 2015
Business Assessable
income as
assessed by the
Respondent
Applicant’s
position in
ASFIC
Difference
between
the parties
Concession
arising
from ASFIC
Courier business $117,650 $117,650 No dispute Butcher
business
$423,447 $287,854 max $146,179 $398,953 Cleaning
services
$22,506 $22,506 No dispute Other
assessable
income
$0 $0 No dispute Assessable
income
$563,603 $428,010 max $146,179 $539,109 Expenses $538,071 $436,925 $101,146 $513,577 Taxable
income
$25,532 $0 $36,118 $25,532 Tax liability
(30%)
$7,660 $0 $10,835 $7,660
Financial year ended 2016
Short Fall Interest Charges
Income
shortfall
amount
Respondent’s
assessment
Applicant’s
contention in
ASFIC
Concession
arising from
ASFIC
FY14 $23,823 $9,597 $23,823 FY15 $2,339 $1,544 $2,339 FY16 $12,182 $0 $9,007 Total $38,350 $11,141 $35,169 Penalty Remission
Withholding
amount
Respondent’s
assessment of
PAYG
penalty
Respondent’s
assessment
after
remission
Applicant’s
estimated
PAYG
contention in
ASFIC
Concession
arising from
ASFIC
FY14 $78,160 $61,600.72 $37,701.42 $58,237.76 FY15 $69,387 $52,040.00 $27,529.73 $52,580.01 FY16 $99,724 $74,793.30 $31,106.83 $67,600.13 Total $247,271 $185,453.30 $96,337.98 $178,417.90 Concessions arising from the Applicants Amended Statement of facts Issues and Contentions
SGC and SGC
Penalty
Respondent’s
assessment of
SGC + SGC
penalty
Applicant’s
estimated
SGC
contention in
ASFIC
Concession
arising from
ASFIC
2014 $20,385.01 $3,289.90 $15,338.67 2015 $22,063.70 $3,390.05 $18,590.12 2016 $ 28,958.71 $3,101.45 $25,468.31 Totals 2014-16 $71,407.42 $9,781.41 $59,397.11
Date(s) of hearing: 10, 11, 12 and 14 February 2025 Date final submissions received: 30 April 2025 Solicitors for the Applicant:
Counsel for the Applicant
Adam Ahmed & Co
Mr D Diaz
Counsel for the Respondent: Mr C Slater Solicitors for the Respondent: Australian Taxation office
Key Legal Topics
Areas of Law
-
Taxation Law
Legal Concepts
-
Tax Assessment
-
Administrative Penalties
-
Intentional Disregard
-
Shortfall Interest Charge
-
Onus of Proof
-
Admissibility of Evidence
-
Unexplained Deposits
0
18
0