Dermatis and Commissioner of Taxation (Taxation)

The Administrative Appeals Tribunal (AAT) considered whether it had jurisdiction to review a decision by the Commissioner of Taxation not to remit a shortfall interest charge (SIC). The applicant, Mr Alexandros Dermatis, sought to challenge the Commissioner's decision not to remit $17,901.55 in SIC applied to his amended income tax assessments for the 2017 and 2018 income years. The Commissioner had advised Mr Dermatis that he could not object to this decision because the SIC payable was less than 20% of the tax shortfall amount, but that he could seek a review in the Federal Court or Federal Circuit Court. Mr Dermatis instead lodged an application with the AAT.

The central legal issue before the AAT was whether the Commissioner's decision not to remit the SIC was a "taxation decision" as defined by the *Taxation Administration Act 1953* (Cth) (TAA), which would grant the AAT jurisdiction to review it. Specifically, the AAT had to determine if the decision fell within the scope of Part IVC of the TAA, which governs objections and reviews of taxation decisions.

The AAT reasoned that its jurisdiction is conferred by statute, and in relation to taxation matters, it is primarily derived from Part IVC of the TAA. This Part applies to "taxation decisions" against which a taxation objection may be made. The AAT referred to the Full Court of the Federal Court's decision in *Federal Commissioner of Taxation v Administrative Appeals Tribunal* (2011) 191 FCR 400, which clarified that not all decisions made by the Commissioner are "taxation decisions" for the purposes of Part IVC. The AAT noted that s 8AAG of the TAA empowers the Commissioner to decide whether to remit SIC or general interest charge, and that decisions made under this provision are explicitly excluded from the objection and review procedures under Part IVC, even if they affect a taxpayer's liability. Such decisions, the AAT observed, may be subject to judicial review in the Federal Court under the *Judiciary Act 1903* (Cth) or the *Administrative Decisions (Judicial Review) Act 1977* (Cth) if an error of law exists.

Consequently, the AAT concluded that it lacked jurisdiction to review the Commissioner's decision not to remit the SIC because it was not a "taxation decision" within the meaning of Part IVC of the TAA. The application was therefore dismissed.