Firefighters Benefit Fund of WA Inc and Commissioner of Taxation (Taxation)

The Firefighters Benefit Fund of WA Inc (the Applicant) sought review of a decision by the Commissioner of Taxation (the Respondent) disallowing its objection to a private ruling. The dispute concerned whether the Applicant was "formed for the purpose of insuring... [members] against loss, damage or risk of any kind" for the purposes of section 121 of the *Income Tax Assessment Act 1936* (Cth), and consequently, whether it should be deemed to be carrying on the business of insurance. The matter was heard in the Taxation and Commercial Division.

The primary legal issues before the court were: first, whether the Applicant was established and conducted for the purpose of insuring its members against loss, damage, or risk; and second, if so, whether section 121 of the *Income Tax Assessment Act 1936* deemed the Applicant to be a company carrying on the business of insurance. The Applicant contended that the "mutuality exception" meant its members' contributions were not assessable income unless section 121 applied.

The court considered that the purpose for which an association was formed and conducted, as evidenced by its constitution, activities, history, and control, were relevant to determining its purpose under section 121. The court noted that the contributions paid by members were to be treated as premiums for the purposes of subsection 121(2). The court affirmed the Respondent's decision, meaning the Applicant's objection was disallowed.