Gupta and Tax Practitioners Board

[2022] AATA 4226

Gupta and Tax Practitioners Board [2022] AATA 4226 (12 December 2022)

Division:TAXATION AND COMMERCIAL DIVISION

File Number:          2020/5122

Re:Sanjeev Gupta

APPLICANT

AndTax Practitioners Board

RESPONDENT

Decision

Tribunal:Senior Member Dr M Evans-Bonner

Date:12 December 2022

Place:Perth

The Reviewable Decision is affirmed.

.................[Sgd].......................................................

Senior Member Dr M Evans-Bonner

CATCHWORDS

TAXATION – application for unrestricted registration as a tax agent – Master of Business Administration (MBA) – whether MBA is relevant to the unrestricted tax agent services to which the Applicant’s application for registration relates – MBA degree and units considered as a whole – only three out of 13 units relevant – eligibility requirements not satisfied – recommendations made concerning communications by Board staff concerning eligibility requirements – Reviewable Decision affirmed

LEGISLATION

Administrative Appeals Tribunal Act 1975 (Cth) s 37

Tax Agent Services Act2009 (Cth) ss 20-5, 20-5(1), 20-5(1)(b), 20-25(1), 90-1(1), 90-5

Tax Agent Services Regulations 2022 (Cth) reg 21, sch 2, part 2, item 202, 202(a), 202(a)(i), 202(b), 202(b)(i), 202(c)

CASES

Ayles v Tax Practitioners Board [2014] FCA 675

SECONDARY MATERIALS

TPB(I) 14/2012: Tertiary qualifications in a discipline other than accounting for tax agents

REASONS FOR DECISION

Senior Member Dr M Evans-Bonner

12 December 2022

background

1. Mr Gupta is seeking review of a decision of the Tax Practitioners Board (the Board) made on 22 July 2020 (T4), which was sent to Mr Gupta on 13 August 2020 (T5). The decision was to reject his application for an unrestricted registration as a tax agent. I will refer to this decision as the Reviewable Decision.

2. The issue before me is whether Mr Gupta is eligible for registration as a tax agent pursuant to s 20-5(1) of the Tax Agent Services Act2009 (Cth) (TAS Act).

   The hearing

3. This application was heard by videoconference on 10 August 2022. Mr Gupta represented himself. The Board was represented by Mr MGS Crowley of counsel, instructed by Ms B Azhari, an in-house lawyer employed by the Board.  

4. I admitted the following documents into evidence at the hearing:

   (a)Tribunal Book, labelled A1 to A19 and R1-R2, comprising pages 1 to 49 (Exhibit 1); and

   (b)Statement and Documents lodged by the Board pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 (Cth), labelled T1-T5, comprising pages 1 to 158 (Exhibit 2).

5. The Board filed a Statement of Facts, Issues and Contentions on 19 August 2021 (SFIC), as well as an Outline of Submissions on 11 February 2022. Mr Gupta filed submissions titled “Commentary on Case” on 1 October 2021.

6. Further written submissions were filed by the Board on 17 August 2022 concerning the applicable law and policy, and the relevance of some additional professional affiliations and qualifications held by Mr Gupta. Mr Gupta did not make any further submissions.

   Legislative framework

7. Part 2 of the TAS Act concerns the registration of tax agents.

8. The Dictionary in s 90-1(1) of the TAS Act provides that:

   “registered tax agent” means an entity that is registered under this Act as a registered tax agent.

9. Subsection 20-25(1) of the TAS Act provides that a person applies for a specific type of registration, which the Board must grant if a person is eligible:

   If you have applied to the Board for a type of registration, the Board must grant your application if you are eligible for registration of that type. Otherwise, the Board must reject your application.

10. The type of registration that Mr Gupta applied for was an unrestricted registration. This meant that his registration would not be restricted to a particular area or type of work (T3/43).

11. Section 20-5 of the TAS Act concerns eligibility for registration as a registered tax agent or BAS Agent. It provides in part:

    (1)      An individual, aged 18 years or more, is eligible for registration as a *registered tax agent or BAS agent if the Board is satisfied that:

    (a)       the individual is a fit and proper person; and

    (b) the individual meets the requirements prescribed by the regulations (including, but not limited to, requirements relating to qualifications and experience) in respect of registration as a registered tax agent or BAS agent; …

12. The regulations referred to in s 20-5(1)(b) of the TAS Act are the Tax Agent Services Regulations 2022 (Cth) (TAS Regs). Regulation 21 is titled, “Requirements for registration” and provides:

    For the purposes of paragraph 20-5(1)(b) of the Act, the requirements in respect of registration of an individual as a registered tax agent are that one or more of clauses 201 to 211 of Part 2 of Schedule 2 applies in relation to the individual.

    (Note omitted.)

13. Schedule 2, Part 2, item 202 of the TAS Regs relevantly provides:

    Tertiary qualifications—specialists

    202     This clause applies if the individual:

    (a)       has been awarded either:

    (i)a degree, or a post graduate award, in an area (other than accounting) that is relevant to the tax agent service to which the individual’s application for registration relates from an Australian tertiary education institution; or

    (ii)a degree, or an award, in an area (other than accounting) that is approved by the board, relevant to the tax agent service to which the individual’s application for registration relates, and that is from an equivalent institution; and

    (b)if the Board considers it relevant to the tax agent service to which the individual’s application for registration relates—has successfully completed as many of the following courses as the Board considers necessary:

    (i)a course in basic accounting principles that is approved by the Board;

    (ii)a course in commercial law that is approved by the Board;

    (iii)a course in Australian taxation law that is approved by the Board; and

    (c)has undertaken at least 1 year of full time relevant experience (or part time equivalent) in the last 5 years.

    (My emphasis. Notes omitted.)

14. A “tax agent service” referred to in item 202 above, is defined in s 90-5 of the TAS Act. The relevant part provides:

    (1)       A tax agent service is any service:

    (a)       that relates to:

    (i) ascertaining liabilities, obligations or entitlements of an entity that arise, or could arise, under a * taxation law; or

    (ii)advising an entity about liabilities, obligations or entitlements of the entity or another entity that arise, or could arise, under a taxation law; or

    (iii)representing an entity in their dealings with the Commissioner; and

    (b)that is provided in circumstances where the entity can reasonably be expected to rely on the service for either or both of the following purposes:

    (i) to satisfy liabilities or obligations that arise, or could arise, under a taxation law;

    (ii) to claim entitlements that arise, or could arise, under a taxation law.

15. There is an information sheet TPB(I) 14/2012: Tertiary qualifications in a discipline other than accounting for tax agents. However, I note that this information sheet is not applicable because paragraph 3 provides:

    This TPB(I) does not apply to applicants relying on Item 202 to obtain full, or ‘unconditional’, registration as a tax agent. In these cases, the TPB will assess the application having regard to the relevant requirements in the TAS [Act] and TAS [Regs].

    (Emphasis in original.)

16. The Federal Court decision in Ayles v Tax Practitioners Board [2014] FCA 675 (Ayles) has similarities with Mr Gupta’s application for registration. However, in Ayles the registration applied for differed slightly from Mr Gupta’s application. As I noted above, Mr Gupta applied for an unlimited registration. In his judgment, Rangiah J stated that Mr Ayles had applied to the Board for a limited registration whereby he would “limit his services to individuals, partnerships, small businesses and small trusts” (at [18]). Rangiah J further explained that Mr Ayles had confirmed at his Tribunal hearing that he “sought registration on the basis that his services would be confined to the preparation of income tax returns for individuals, and not for companies or trusts” (at [21]).

17. In Ayles, Rangiah J provided guidance as to how item 202(a)(i) of the TAS Regs should be interpreted. Despite the differences in the types of registration applied for by Mr Gupta and Mr Ayles, that guidance is, in my view, equally relevant to this application. His Honour explained, at [26]:

    It is true that the construction given by the Deputy President that the degree “viewed as a whole” must be relevant to the tax agent services to which the application relates, is consistent with the natural language of the section. The degree must be one “other than accountancy”. Any such degree is likely to involve some subjects that are relevant to tax agent services and some that are not. An assessment of whether the degree is relevant to the tax agent services can only be undertaken by examining the component subjects of the degree, and deciding whether the number and nature of those subjects relevant to the taxation services means that the degree is one that is relevant to such taxation services. It is the degree that must be relevant, and the natural language of the section suggests that the degree is to be viewed “as a whole”.

18. In summary, if an applicant has a degree other than accountancy, the component subjects of the degree should be examined to firstly ascertain the subjects relevant to the tax agent services to which the application relates. Those subjects must then be viewed or considered in the context of the whole degree.

    is mr gupta eligible for registration as a tax agent?

19. To be eligible for registration as a tax agent, Mr Gupta needs to have satisfied the requirements of item 202 of the TAS Regs.

20. The Board conceded that Mr Gupta satisfies the requirements of item 202(b) which refers to successful completion of courses the Board considers necessary. These may include courses in basic accounting, commercial law and Australian taxation law (transcript/29). In this regard, I note that Mr Gupta completed a “commercial law” unit (“Law for Business”) in his Master of Business Administration (MBA). He also completed units in those areas with the Monarch Institute, namely “Contract and Consumer Law”, “Corporations and Trusts Law”, “Property Law”, “Taxation Fundamentals”, “Taxation for Legal Entities” (Exhibit 1/A2-A3); T3/70-71).  

21. The Board also conceded that Mr Gupta satisfies the experience requirement in item 202(c) of the TAS Regs because he has at least one year of full-time relevant experience (transcript/29; Board’s SFIC, para [19]-[20]).

22. The issue that I need to determine, is whether item 202(a) is satisfied.

23. Mr Gupta has a Bachelor of Science (Botany) from the University of Burdwan, India (2008). He also has an MBA from Murdoch University, Western Australia (2014). It is the MBA that is the relevant qualification for the purpose of determining whether Mr Gupta meets the eligibility requirements. As the MBA is from a tertiary institution, sub-paragraph (i) of item 202(a) is the relevant sub-paragraph.

24. Thus, the specific issue is, does Mr Gupta hold a degree, or a post graduate award, in an area (other than accounting) that is relevant to the tax agent service to which the individual’s application for registration relates, from an Australian tertiary education institution?

25. As can be seen from the following list of subjects Mr Gupta completed in his MBA, he has completed three units in the MBA in the areas of accounting and law that would be relevant to the tax agent services to which Mr Gupta’s application for registration relates. I have highlighted (in bold) the relevant units (T3/59; T3/76-77):

    ·Accounting for Managers

    ·Organisational Behaviour and Management

    ·Business Finance

    ·Strategic Decision-Making

    ·Project Management

    ·Law for Business

    ·Strategic Marketing Management

    ·Entrepreneurship and Innovation Management

    ·Supply Chain Management and Logistics

    ·Dispute Management

    ·Economics of Globalisation

    ·Effective Leadership

    ·Decision Neuroscience Neuromarketing

26. When these units are viewed in the context of the degree as a whole (Ayles), it cannot be concluded that the degree is relevant to the unrestricted tax agent services to which Mr Gupta’s application for registration relates, which as s 90-5(1) of the TAS Act confirms, are a very broad range of services.

27. In simple terms, three relevant units out of thirteen units do not convert the MBA “as a whole” to being a relevant qualification. There are far more subjects that are not relevant, than subjects that are relevant.

28. Consequently, Mr Gupta does not meet the eligibility requirements under item 202(a) of the TAS Regs, as required by s 20-5 of the TAS Act.

    The relevance of other qualifications

29. Mr Gupta has a Certificate IV in bookkeeping (T3/70). This certificate is not high enough to constitute a degree or post-graduate award for the purpose of satisfying item 202(a)(i).

30. He also completed three units towards a Diploma of Accounting (T3/71). Two of those units were considered by the Board as satisfying the requirement for “a course in basic accounting principles” in item 202(b)(i) of the TAS Regs (T3/32).

31. Mr Gupta has also produced certificates showing that he is an Associate of the Institute of Public Accountants (Exhibit 1/A18) and an Associate of the Institute of Financial Accountants. They are not relevant to registration under item 202 of the TAS Regs.

    Should the board have considered granting mr gupta conditional registration?

32. At the hearing Mr Gupta stated that the Board did not give him the option of a conditional registration (transcript/26), which should have been offered to him.  

33. However, as I outlined above, s 20-25(1) of the TAS Act contemplates that a person applies to the Board for a specific type of registration, and that the Board is to consider whether the person is eligible for registration of that type. Mr Gupta applied for an unrestricted registration and so that was what was before the Board for consideration. Therefore, it cannot be concluded that the Board should have considered (or that I should consider) a different type of registration to the one he applied for.

    issues with communications by the board

34. Mr Gupta initially applied for an unrestricted registration pursuant to item 202 of the TAS Regs on 7 December 2019 based on his MBA (Exhibit 1/A16/23). This application was subsequently withdrawn, and Mr Gupta received a cheque for his application fee in the post, although it is unclear who instigated the withdrawal.

35. At the time of his initial application, he was referred by the Board’s Qualifications Team to the Monarch Institute to complete further units (Exhibit 1/A7/12-13). Mr Gupta undertook and successfully completed those units (Exhibit 1/A2-A3; T3/49-50) at a cost of approximately $2000 (T3/97). He made his second application for unrestricted registration (that is, the application relating to the Reviewable Decision) after completing the Monarch Institute units.

36. Mr Gupta maintains that the Board should have first told him that his MBA qualification did not satisfy the eligibility requirements. His submission, if I have understood it correctly, was that if he knew this, he would not have completed the Monarch Institute units which cost him time and money.

37. Mr Gupta’s submission is, in my view, a reasonable one. I ask that the Board reviews its procedures and training for staff concerning communicating with applicants about their specific eligibility requirements to ensure they are accurately, fully, and clearly communicated.

38. Although the Board may have provided incomplete information to Mr Gupta, they did not provide inaccurate information. This is because the Board requires the Monarch Institute (or equivalent) units to be successfully completed for a person to satisfy item 202(b) of the TAS Regs. Even if the Board had provided inaccurate or misleading information, it does not change the eligibility requirements which Mr Gupta’s MBA does not satisfy.

    Decision

39. The Reviewable Decision is affirmed.

I certify that the preceding 39 (thirty-nine) paragraphs are a true copy of the reasons for the decision herein of Senior Member Dr M Evans-Bonner

............[Sgd].....................................................

Associate

Dated: 12 December 2022

Date of hearing:

10 August 2022

Date final submissions received:

Representative for the Applicant:

17 August 2022

Self-represented

Representative for the Respondent:

Mr MGS Crowley instructed by Ms B Azhari, Tax Practitioners Board