Gu and Commissioner of Taxation (Taxation)

This matter concerned an objection by Mr Gu against an assessment by the Commissioner of Taxation for the 2013 income year. The dispute centred on the Commissioner's assessment of additional income tax and an administrative penalty. The decision was made by Senior Member Egon Fice of the Tribunal.

The Tribunal was required to determine whether Mr Gu had discharged the onus of proving that his income tax liability for the 2013 income year was excessive. It also needed to consider whether the Commissioner's assessment of additional income tax was a reasonable estimation and whether Mr Gu was liable for an administrative penalty due to a failure to take reasonable care in providing information for his income tax return.

The Tribunal found that Mr Gu had failed to prove his income tax liability was excessive and that the Commissioner's assessment of additional income tax was reasonable. The Tribunal determined that Mr Gu was liable for an administrative penalty because his income tax return contained false and misleading information, and he had failed to take reasonable care in its preparation. Specifically, Mr Gu was aware of the risk in making the statements, knowing they were unlikely to be correct and that he had failed to include rental income. The Tribunal concluded that the appropriate base penalty was for recklessness, calculated at 50% of the shortfall amount. As there was no evidence presented regarding the shortfall interest charge or the remission of the administrative penalty, the Tribunal affirmed the Commissioner's Objection Decision of 22 October 2015.