C.C.D Pty Ltd and Commissioner of Taxation (Taxation)

[2020] AATA 3956

C.C.D Pty Ltd and Commissioner of Taxation (Taxation) [2020] AATA 3956 (8 October 2020)

Division: SMALL BUSINESS TAXATION DIVISION

File Number(s):      2020/2033-35

Re:C.C.D Pty Ltd

APPLICANT

AndCommissioner of Taxation

RESPONDENT

DECISION

Tribunal:Senior Member R J Olding

Date:8 October 2020

Place:Sydney

The application for review is dismissed.

...............................[sgd].........................................

Senior Member R J Olding

CATCHWORDS

PRACTICE AND PROCEDURE – jurisdiction of the Tribunal – where applicant sought review of decision to deny refunds of excess franking credits for the 2006, 2007 and 2008 income years – where assessments ascertained the applicant’s taxable income was nil – where Income Tax Assessment Act 1936, s 175A provided at the relevant time that a taxpayer could not object against a nil assessment – decision not reviewable – application for review dismissed

LEGISLATION

Income Tax Assessment Act 1936 (Cth) ss 6 (definition of “assessment”), 175A

Taxation Administration Act 1953 (Cth) s 14ZZ

Administrative Appeals Tribunal Act 1975 (Cth) s 42A

REASONS FOR DECISION

Senior Member R J Olding

8 October 2020

1. The Applicant, C.C.D Pty Ltd (“CCD”), made losses in the financial years ended 30 June 2006, 2007 and 2008. It also received franked dividends. It wants refunds of the excess franking credits. The Respondent, the Commissioner of Taxation (“Commissioner”), decided that, as a company, CCD is not entitled to the refunds.

2. CCD has asked the Tribunal to review the Commissioner’s decisions denying the refunds. The Commissioner says the Tribunal has no power to review those decisions. For the reasons that follow, I agree.

3. The Tribunal is not empowered to review every decision the Commissioner makes, only those decisions for which an Act of Parliament provides for review by the Tribunal. The decisions the Tribunal is empowered to review include “reviewable objection decisions” which include decisions on objections against taxation assessments.[1]

   [1] Taxation Administration Act 1953 (Cth) s 14ZZ.

4. There are assessments for each of the three years. CCD lodged a document it called a “notice of objection” against each assessment on the sole ground that it says it is entitled to the refunds. In response to the “notice of objection” the Commissioner made a decision in which he denied the refunds claimed by CCD. 

5. Why, then, is the Tribunal not able to review these decisions? The reason is that at the relevant time[2] section 175A of the Income Tax Assessment Act 1936 (Cth) (“ITAA 1936”) explicitly provided that taxpayers could not object against an assessment ascertaining that the taxpayer had no taxable income (unless seeking an increase in the taxpayer’s liability). Each of the assessments in this case stated CCD had a taxable income of nil.

   [2] The Tax and Superannuation Laws Amendment (2013 Measures No. 1) Act 2013 (Cth), Schedule 5, Part 2, Division 2 amended the ITAA 1936 to provide for assessments of tax offset refunds, with objection and review rights. However, under item 24 in Division 2, those amendments only apply in relation to assessments for the 2013-14 and later income years.

6. Since CCD could not object against the assessments it follows the Commissioner could not make an objection decision relating to the assessments. Therefore, there is no reviewable objection decision in relation to the assessments for the Tribunal to review.

7. Nor is there any other provision in any law empowering the Tribunal to review the Commissioner’s decisions denying the refunds. In particular, those decisions were not “assessments” because that expression was relevantly defined in section 6 of the ITAA 1936 as “the ascertainment of the amount of taxable income (or that there is no taxable income) and of the tax payable on that income (or that no tax is payable)”. The claimed refunds do not form part of the ascertainment of CCD’s taxable income. It follows that there is no relevant assessment, nor any objection decision the Tribunal is empowered to review.

8. As the Tribunal has no jurisdiction to hear and decide CCD’s application for review, it must be dismissed under s 42A(4) of the Administrative Appeals Tribunal Act 1975 (Cth).

I certify that the preceding 8 (eight) paragraphs are a true copy of the reasons for the decision herein of Senior Member R J Olding

................................[sgd]........................................

Associate

Dated: 8 October 2020

Date of hearing:	6 October 2020
Representative for the Applicant:	R Schreuder, Sole Director
Representative for the Respondent:	R Li, ATO Review & Dispute Resolution