Danielle James and Commissioner of Taxation
[2015] AATA 136
•11 March 2015
[2015] AATA 136
Division Taxation Appeals Division File Numbers
2014/5760
2014/5761
Re
Danielle James
APPLICANT
And
Commissioner of Taxation
RESPONDENT
DECISION
Tribunal Senior Member Bernard J McCabe
Date 11 March 2015 Place Brisbane The Tribunal does not have jurisdiction to hear these applications insofar as they relate to the allocation of PAYG credits.
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Senior Member Bernard J McCabe
CATCHWORDS
JURISDICTION – Dispute regarding PAYG credits – Decision with respect to PAYG credits not part of objection decision – Tribunal has no power to review decision with respect to PAYG credits – No jurisdiction.
LEGISLATION
Income Tax Assessment Act 1936 (Cth), s 6(1)
Taxation Administration Act 1953 (Cth), Pt IVC
CASES
Confidential and Commissioner of Taxation [2014] AATA 257
David Cassaniti v Commissioner of Taxation [2010] FCA 641
REASONS FOR DECISION
Senior Member Bernard J McCabe
11 March 2015
The taxpayer is a doctor. She was employed by a service company during the years of income ending on 30 June 2010 and 2011. Her income tax returns during the relevant years of income disclosed her salary and PAYG credits. The service company was placed in liquidation in 2011 but its accounts did not tally with those of the taxpayer in relation to PAYG credits. The Commissioner issued amended assessments which determined the taxpayer’s taxable income in the two years under review. In the course of making his calculations, the Commissioner significantly reduced the PAYG credits (in the second year under review, the amount of the credit was actually reduced to nil) that the taxpayer could claim. The Commissioner also imposed administrative penalties in separate notices of assessment.
The Commissioner concedes the Tribunal has jurisdiction to review the penalty assessments. The Tribunal will proceed to do that in the ordinary course. But the Commissioner says the Tribunal does not have the jurisdiction to review whether the taxpayer was entitled to claim PAYG credits. The Commissioner says PAYG instalments and credits do not form part of an assessment under s 6(1) of the Income Tax Assessment Act 1936 (Cth) (ITAA36), and there is no objection decision under Part IVC of the Taxation Administration Act 1953 (Cth) (“the Act”) which enlivens the Tribunal’s jurisdiction.
Written submissions lodged on behalf of the taxpayer suggest the Commissioner is acting unreasonably because the question of the PAYG credits can be set to one side.
The taxpayer says a valid objection under Part IVC of the Act has been lodged which disputes the amount of the tax which has been assessed. The taxpayer insists she is entitled to ask the Tribunal to look at the way in which taxable income and the amount of tax have been calculated.
The jurisdiction of the Tribunal to consider arguments over PAYG credits was recently discussed by Deputy President Alpins in Confidential and Commissioner of Taxation [2014] AATA 257. In that case, the learned deputy president explained a decision with respect to PAYG credits did not form part of an objection decision under Part IVC – and was therefore unreviewable – because the decision was, in substance, “a particular of the statement of account between the taxpayer and the Commissioner…”: at [19]-[20].
While that decision impacts on the amount of money owed by the taxpayer as a consequence of the assessment, it is not a decision with respect to the assessment itself.
The decision of DP Alpins is consistent with the authorities, which include the decision of Edmonds J in David Cassaniti v Commissioner of Taxation [2010] FCA 641 (see in particular [174]-[175]). I do not think it is open to me to reach a different view of the matter. If I agreed to undertake the review sought by the applicant, I would inevitably be required to consider the decision with respect to credits – and I do not think I have the power to do that, for the reasons explained by DP Alpins.
CONCLUSION
It is conceded that the question of penalties is properly before the Tribunal in separate proceedings. The Tribunal does not have jurisdiction to hear the current dispute insofar as it relates to the allocation of PAYG credits.
I certify that the preceding 6 (six) paragraphs are a true copy of the reasons for the decision herein of Senior Member Bernard J McCabe. ........................................................................
Associate
Dated 11 March 2015
Date of hearing 25 November 2014 Date final submissions received 14 December 2014 Advocate for the Applicant O'Brien Accountants
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