Morrison-Francis and Commissioner of Taxation (Taxation)

[2020] AATA 3757

Morrison-Francis and Commissioner of Taxation (Taxation) [2020] AATA 3757 (22 September 2020)

Division:TAXATION AND COMMERCIAL DIVISION

File Number(s):      2020/3708

Re:Trent Morrison-Francis

APPLICANT

AndCommissioner of Taxation

RESPONDENT

DECISION

Tribunal:Deputy President Bernard J McCabe
Member D Grigg

Date:22 September 2020

Place:Brisbane

The Tribunal determines that it has no jurisdiction to hear this matter.

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Deputy President Bernard J McCabe

CATCHWORDS

PRACTICE AND PROCEDURE – whether the Tribunal has jurisdiction to hear the matter – deemed decision of the Commissioner – whether the applicant provided written notice under s 14ZYA requiring a decision to be made by the Commissioner – Commissioner found not to have previously received the written notice – Commissioner has now received notice requiring decision within 60 days – 60 days not elapsed between notice and application for review – no deemed decision – no reviewable decision for the Tribunal to consider – no jurisdiction

LEGISLATION

Taxation Administration Act 1953 (Cth)

CASES

Burns and Commissioner of Taxation [2020] AATA 671

SECONDARY MATERIALS

REASONS FOR DECISION

Deputy President Bernard J McCabe
Member D Grigg

22 September 2020

1. The taxpayer in this case claims he sent the Commissioner a notice of objection on or about 14 January 2020. He says he sent the notice in the proper form in an envelope along with a ‘request for private ruling’ document. He also says he sent both documents by fax. The taxpayer says he subsequently sent the Commissioner a notice requiring the Commissioner to make a decision on the objection within 60 days. The taxpayer says that notice was contained in a letter dated 16 April 2020 that was sent by ordinary mail.

2. The Commissioner says the Tribunal does not have jurisdiction to review the decision because the Commissioner did not receive (a) the notice of objection in January or (b) the notice in April that required him to make a decision. In those circumstances, the Commissioner says there is no (deemed) objection decision before the Tribunal.

3. We have to decide if we are satisfied the taxpayer lodged the notice of objection and the subsequent notice within the timeframe that he described. As it happens, we are not satisfied the second notice was lodged or received. That means the Tribunal does not have jurisdiction to entertain the proceedings.

   THE RULES

4. Taxpayers who are dissatisfied with a range of decisions made by the Commissioner of Taxation must use the process set down in Part IVC of the Taxation Administration Act 1953 (Cth) (the TAA) (the Act) to seek a review. The review process formally begins when the taxpayer lodges a notice of objection to the decision in question. The notice must be in the appropriate form. Time limits apply, of course: a taxpayer who seeks to object outside the time limit must seek an extension of time. These days, the ATO uses ‘smart’ forms on its website that will ask the taxpayer to seek an extension of time if the dates being entered suggest that is appropriate.

5. Section 14ZU of the Act says the form must include a detailed reference to the grounds upon which the taxpayer relies. Once the Commissioner receives the notice of objection, a decision on the objection will typically be made in a timely way. If the objection was lodged within time and is otherwise valid, the Commissioner must decide whether to allow the objection in whole or in part, or he must disallow the objection: s 14ZY of the Act

6. Some objections raise complex questions, and it may be necessary to seek further information. The taxpayer has a remedy if he or she believes the process is dragging on. Section 14ZYA of the Act permits the taxpayer to give a notice to the Commissioner requiring that a decision be made within 60 days. There are time limits which must be observed before the taxpayer can demand action. Section 14ZYA says the taxpayer cannot give the notice until 60 days have elapsed after (a) the date on which the notice of objection was lodged, or (b) the date of one of the other events referred to in s 14ZYA(1). If a valid notice is lodged under s 14ZYA(1), the decision must be made within 60 days thereafter. If the Commissioner does not respond, the objection decision is deemed to have been disallowed: s 14ZYA(3) That deemed decision is a reviewable decision which can be reviewed by the Administrative Appeals Tribunal or the Federal Court: s 14ZZ of the Act.

   WHAT HAPPENED IN THIS CASE?

7. Mr Trent Morrison-Francis is a veteran. He is aware of other proceedings in the Tribunal which may be relevant to his own situation. He says those other proceedings have been the subject of extensive discussion within the veterans’ community. In late 2019, he had an exchange on Facebook with other veterans including an individual involved in the other proceedings. They discussed those other proceedings and yet another case which the participants in the exchange thought might be relevant to their individual circumstances. A screenshot of the Facebook exchange records the taxpayer asking whether it would be a good idea to put in an objection. The consensus in the discussion was that it would be a good idea to object. The taxpayer also referred to a circular generated by the Defence Force Welfare Association that discussed the case. The circular raised the spectre of remedial legislation that  would amend the law in favour of the revenue. The circular speculated that the remedial legislation would be backdated in its application.

8. In the course of his evidence at the interlocutory hearing, the taxpayer said he was motivated by what he had heard  to lodge an objection in early January 2020 even though the Tribunal had not at that point delivered its decision in the other proceedings discussed on Facebook. (The Tribunal has since delivered its decision in Burns and Commissioner of Taxation. [2020] AATA 671 The decision is currently on appeal to the Full Federal Court.) He said in his oral evidence that he was unsure about how to proceed, so he decided to lodge an objection using the form on the Australian Taxation Office (ATO) website to lodge an application for a private ruling. He said he put both documents in an envelope and mailed them to the ATO. He said he also sent the documents separately by fax although the fax report says only one page was transmitted on the relevant date. The taxpayer suggested he had made several attempts to send the documents on that date and the fax report tendered in these proceedings might relate to an earlier failed attempt.

9. The taxpayer provided a tracking record from Australia Post which shows a letter was scanned and processed on 14 January 2020 and delivered through the Penrith Delivery Centre on 17 January, that record does not record the delivery address.

10. The Commissioner acknowledged he received the request for a private ruling, but he says a search of the document management system has failed to discover any record of  receiving a notice of objection in January. We will have more to say about the document search below.

11. The taxpayer says he did not receive a response to the notice of objection. On or about 16 April 2020, he claims he sent a letter by ordinary mail referring to s 14ZY of the Act. The letter requested the Commissioner to make a decision within 60 days. The Commissioner says the records search has not uncovered a copy of that letter either.

12. A few days later, on 22 April 2020, the taxpayer had a long conversation with an ATO complaints officer. A transcript of that call was provided to the Tribunal. The transcript records the complaints officer confirming the ATO had received a notice of objection, but he was under the impression the objection was invalid: at pp 3-4. There was also a confusing discussion (at p 14) in which the complaints officer notes the taxpayer had ticked a box at Q8 of the form which indicated he had sought an extension of time. That is odd, given the copy of the notice of objection produced by the taxpayer did not feature a box in Q8 referring to an extension of time. The transcript also records (at p 2) the complaints officer telling the taxpayer:

    …if you write to us now, and tell us, and direct us that you want a decision made, and we don’t respond to that, uh, request within 60 days, you have the right to the go to the AAT.

13. That remark was made in the course of a tense exchange between the taxpayer and the complaints officer. That remark, and the course of the whole exchange, suggests the complaints officer was not aware the taxpayer had already sent a notice under s 14ZYAof the Act in his letter dated 16 April. Curiously, the taxpayer did not explicitly mention the letter of 16 April to the complaints officer.

    THE SEARCH

14. Ms Sarah Marshall, an officer in the employ of the Commissioner, was commissioned to conduct a search of the ATO records in relation to the taxpayer in an effort to locate the notice of objection and the notice under s 14ZYA of the Act. While a number of documents were identified, neither of the documents in question could be found.

15. Ms Marshall is a manager in the review and dispute resolution line at the ATO. She is an experienced public servant and has extensive experience in using the ATO’s computerised information system, SIEBEL. Ms Marshall provided a statement in which she described the search she undertook. She also gave evidence at the hearing where she was cross-examined by the taxpayer about her qualifications and the way in which she conducted the search.

16. The taxpayer raised a number of questions about the adequacy of the search in the course of his cross-examination of Ms Marshall. He also asked questions that implied the information system had been improperly accessed and that documents might have been removed. He also asked questions about whether Ms Marshall had the technical expertise and the security clearance to perform a proper search.

17. We accept Ms Marshall was a witness of truth and that she conducted a reasonable search which extended to searching for text in the documents in question; She did not just search for the documents by name. She properly conceded it was possible undiscovered documents might yet exist on the system, and it is possible, although unlikely, that a document might not be scanned into the system in the first place. We accept that conclusion. We have no reason to believe the system was improperly accessed or altered.

    OUR FINDINGS

18. There is no doubt the taxpayer wrote to the ATO in mid-January 2020. The existence of a letter was substantially confirmed by the tracking advice provided by Australia Post. While there are some discrepancies in the evidence, we accept the taxpayer’s claim that he included a notice of objection in that letter. The taxpayer has given sworn evidence to that effect, and his actions are consistent with the advice he received from his colleagues in the veterans’ community. We also note his claim is apparently confirmed by the recorded remarks of the complaints’ officer in April who refers to a notice of objection. The transcript appears to confirm the document was lodged and recorded on the ATO’s document management system even though it was not able to be found later.

19. We reach a different view in relation to the letter dated 16 April 2020 which is said to constitute the notice under s 14ZYA of the Act (although the letter actually refers only to s 14ZY). The taxpayer recalls sending the letter but did not send it by registered mail or fax and does not have any tracking confirmation from Australian Post. We are not suggesting he is dishonest in his evidence, but there is no evidence the letter was received by the ATO. It is not recorded on SIEBEL. That is not conclusive, as we have already explained: it is possible that documents could go astray – but we are being asked to accept the system failed in relation to two separate documents relating to the same contentious exchange. We note the complaints officer clearly did not have the notice before him when he talked to the taxpayer on 22 April 2020. It is surprising the taxpayer did not take the opportunity to point out he had already sent a notice when the complaints officer was explaining how the taxpayer could do that.

20. The statute requires the taxpayer to give the Commissioner written notice under s 14ZYA of the Act. We are not satisfied the document was lodged with the Commissioner. It is unlikely the system failed to record a document received from the taxpayer twice in the absence of improper interference – and we have no reason to believe that occurred.

    CONCLUSION

21. We are not satisfied the Tribunal has jurisdiction to review the decision. While inconvenient for the taxpayer, it is not fatal: the Commissioner has now acknowledged receiving a notice of objection and a notice requiring a decision. If the taxpayer does not obtain a satisfactory response, he will be free to commence proceedings afresh.

I certify that the preceding  21 (twenty-one) paragraphs are a true copy of the reasons for the decision herein of Deputy President Bernard J McCabe, Member D Grigg

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Dated: 22 September 2020

Date(s) of hearing:	11 September 2020
Applicant:	In person
Solicitors for the Respondent:	Jane Lye, Australian Government Solicitor