Morrison-Francis and Commissioner of Taxation (Taxation)

[2020] AATA 1860

Morrison-Francis and Commissioner of Taxation (Taxation) [2020] AATA 1860 (22 June 2020)

Division:TAXATION AND COMMERCIAL DIVISION

File Number:          2020/2698

Re:Trent Morrison-Francis

APPLICANT

AndCommissioner of Taxation

RESPONDENT

DECISION

Tribunal:Senior Member R Olding

Date:22 June 2020

Place:Brisbane

The application for review filed on 5 May 2020 is dismissed.

.............................[SGD]...................................

Senior Member R Olding

Catchwords

PRACTICE AND PROCEDURE – TAXATION – jurisdiction of the Tribunal – where applicant asserts that a notice of objection was lodged and a notice given under s 14ZYA of the Taxation Administration Act 1953 (Cth) – where Commissioner of Taxation denies receiving the notices – where application for review filed before expiry of 60 days from giving of notice under s 14ZYA – application for review dismissed for want of jurisdiction.

Legislation
Administrative Appeals Tribunal Act 1975 (Cth), ss 2A, 18A, 25
Taxation Administration Act 1953 (Cth) ss 14ZY, 14ZYA, 14ZZ(1)

Cases
Burns and Commissioner of Taxation [2020] AATA 671
The Trustee for Andrew Garrett Family Trust No. 3 and Commissioner of Taxation [2013] AATA 395

The Trustee for Oenoviva (Australia & New Zealand) Plant and Equipment Trust and Commissioner of Taxation [2013] AATA 253

REASONS FOR DECISION

Senior Member R Olding

22 June 2020

1. The Applicant, Mr Morrison-Francis, is dissatisfied with the Commissioner of Taxation’s assessment of his income tax liability for the 2019 income year. He has applied[1] to the Tribunal for review of what he says is an objection decision or, in the alternative, a deemed objection decision.

   [1] Application for Review, 5 May 2020.

2. The Commissioner says the Tribunal has no jurisdiction to hear and decide the application for review because no objection decision had been made or deemed to have been made when the application for review was filed.[2]

   [2] Respondent’s Submissions, dated 3 June 2020, page 1, paragraph 2; page 3, paragraph 13.

3. I have decided the Tribunal does not have jurisdiction to hear and decide the application for review. My reasons follow.

   BACKGROUND

4. The substantive issue between the parties is the taxation treatment of the Applicant’s military superannuation benefits.  The Applicant says[3] these benefits should be treated in accordance with the decision of His Honour Justice Logan RFD, a justice of the Federal Court but sitting as a Deputy President of the Tribunal, in the matter of Burns and Commissioner of Taxation [2020] AATA 671.

   [3] Applicant’s Submissions, dated 8 June 2020, page 3, paragraph 25.

5. The Commissioner has treated the Burns litigation as a test case to determine the proper application of the law and has appealed the Tribunal’s decision to the Federal Court of Australia. The appeal is to be heard by a Full Court of the Federal Court but has not yet come on for hearing. 

6. In the meantime, the Commissioner has maintained his view regarding the application of the relevant provisions. The Applicant says the Commissioner should assess his tax liability in accordance with the Tribunal’s decision in the Burns case and, it appears, wants to secure his review rights and bring on a hearing and decision of the Tribunal on his circumstances as soon as possible.

   SUMMARY OF RELEVANT FACTS

7. The Applicant applied to the Australian Taxation Office (“the ATO”) on 14 January 2020 for a private ruling, posing this question:[4]

   How do I amend my tax return and the PAYG withholding from the Commonwealth Superannuation Corporation in accordance with the ATO Test Case 002/2017-2018?

   
   
   

   I wish for this to be made effective without any further action from myself as a tax payer and for my returns to be amended straight away without any further action once the Test Case 002/2017-18 has been determined by Justice Logan.

   [4] Respondent’s Submissions, dated 3 June 2020, Exhibit A, Private Ruling Application.

8. The apparent purpose of the application for private ruling was to try to ensure that the Applicant’s income tax assessment would be amended quickly in the event of a decision favourable to the taxpayer in the Burns case then pending before Justice Logan.

9. The Applicant lodged the private ruling application by post and by facsimile. He says he included, in the postal package containing the application for private ruling, a notice of objection against his 2019 income tax assessment. [5]

   [5] Applicant’s Submissions, dated 8 June 2020, page 1, paragraph 1 and Annexure C: Australia Post Case Report.

10. On 8 June 2020, the Applicant at the direction of the Tribunal provided a copy of a notice of objection, which he says is a copy of the notice posted with the private ruling application, to the Commissioner and the Tribunal. The Commissioner accepts this notice of objection is in the approved form and is a valid notice of objection. However, the Commissioner does not accept that the notice of objection was provided with the application for private ruling. He says the ATO has no record of receiving the notice of objection before 8 June 2020.

11. In discussions between the Applicant and ATO officers and in copies of internal ATO records obtained by the Applicant, ATO officers referred to an “objection”.[6] The Commissioner says that these were erroneous references to the private ruling application which, it will be recalled, sought to have the ATO amend the assessment in the event the decision in the test case were to be favourable to the taxpayer.  The Commissioner says his officers wrongly referred to the private ruling application as an objection but regarded it as not complying with the requirements for a valid notice of objection, which it plainly did not. In any case, the Commissioner says there was no objection decision made by any ATO officer.

    [6] For example, Respondent’s Submissions, dated 3 June 2020, Exhibit D: ATO Case Notes Report, page 2.

12. The copy of the notice of objection[7] has on the final page this handwritten notation:

    Please take this as a request under 14ZYA for the Commissioner to make a decision within 60 days on this decision.

    [7] Applicant’s Submissions, dated 8 June 2020, Annexure A: Applicant’s Objection dated 13 January 2020.

13. There is another document which the Applicant says was posted to the ATO but which the Commissioner does not accept was received by the ATO. It is a letter from the Applicant bearing the date 16 April 2020. The Applicant also provided a copy of this document to the Commissioner and the Tribunal on 8 June 2020. The Applicant says it was posted to the ATO on 16 April 2020. Again, the Commissioner says the ATO has no record of receiving this letter before receiving a copy on 8 June 2020.

14. The letter dated 16 April 2020[8] includes the following:

    Re request to make a formal Decision IAW Section 14XY Taxation Administration Act – Trent Morrison-Francis

    . . .

    Please take this letter as my first and last request for you to make a determination in accordance with Section 14ZY of the Taxation Administration Act 1993 to my Objection and Private Ruling lodged with your office on the 14^th January 2020 with your receipt number 4140082443680.

    . . .

    [8] Applicant’s Submissions, dated 8 June 2020, Annexure F, Letter from the Applicant to the Commissioner requesting determination under section 14ZY of the Taxation Administration Act 1953, dated 16 April 2020.

15. The hearing to determine whether the Tribunal has jurisdiction to hear and decide the application for review was listed for, and commenced at, 2-00 pm on 19 June 2020. During the Applicant’s submissions, he advised that he had filed another application for review at 1-00 pm that day and during the hearing passed a copy of this second application for review to Ms Lye who appeared for the Commissioner. So it is clear to which document I am referring, henceforth in these reasons I refer to the application for review filed on 5 May 2020 as the “first application for review” and I refer to the application apparently filed on 19 June 2020 as the “second application for review”.

    LEGISLATIVE FRAMEWORK

16. The Tribunal only has jurisdiction to hear and decide an application for review of a reviewable objection decision if the Commissioner has actually made an objection decision or is deemed to have done so.[9]

    [9] Administrative Appeals Tribunal Act 1975 (Cth) (“AAT Act”), s 25(1); Taxation Administration Act 1953 (Cth), s 14ZZ(1).

17. A deemed objection decision may arise under s 14ZYA of the Taxation Administration Act 1953 (Cth) (“the TAA”). Broadly, s 14ZYA applies where the Commissioner does not make an objection decision within 60 days of a taxpayer lodging a notice of objection. On expiry of that 60-day period, the taxpayer may give the Commissioner a notice requiring the Commissioner to make a decision on the objection. If the Commissioner does not make an objection decision within a further 60 days after the notice is given, he is taken to have made a decision to disallow the objection.

18. Upon expiry of the further 60-day period after giving the s 14ZYA notice, if the Commissioner has not made an objection decision the taxpayer may apply to the Tribunal for review of the decision disallowing the objection which the Commissioner is then deemed to have made.

    ISSUES FOR DETERMINATION

19. The first application for review does not identify a written decision which the Applicant says is the relevant objection decision nor, despite the form calling for this information, the date the decision for which review is sought was made. It does include a “Receipt number” in the part of the application form which invites insertion of the “Decision reference”, but the receipt appears to relate to documents received by the ATO.[10] The application also describes the decision for which the Tribunal’s review is sought in these terms:

    The decision that the private ruling application sent to the ATO on the 14^th Jan 2020 is invalid and that the Australian Taxation Office had the authority to “Withdraw” the application without my approval or consent based on the ATO’s wording “You can trust the ATO to do the right thing”.

    [10] Application for Review, 5 May 2020, page 4.

20. However, the Applicant’s submissions were focused upon whether the notice of objection, which states that it relates to an amended income tax assessment, had been lodged and decided or alternatively deemed to have been decided.

21. For the reasons that follow, I am unable to identify an actual or deemed objection decision, relating to either the application for private ruling or the amended income tax assessment, that provides a basis for the Tribunal to exercise its review jurisdiction in relation to the Applicant.

22. In that regard, to determine whether the Tribunal has jurisdiction to hear and decide the first application for review, I must decide whether at the time the Applicant filed the application for review:[11]

    (a)the Commissioner had made an objection decision; or alternatively

    (b)the Commissioner was deemed by s 14ZYA of the TAA to have made an objection decision.

    [11] Previous decisions of the Tribunal regarding s 14ZYA have confirmed that a valid application for review cannot be filed, and the Tribunal’s jurisdiction thereby engaged, in advance of a reviewable objection decision being deemed to have been made: The Trustee for Andrew Garrett Family Trust No. 3 and Commissioner of Taxation [2013] AATA 395, [3], [32]; The Trustee for Oenoviva (Australia & New Zealand) Plant and Equipment Trust and Commissioner of Taxation [2013] AATA 253, [15]. The same principle applies in respect of objection decisions actually made by the Commissioner; a valid application for review cannot be made in advance of the objection decision being made.

23. As will be apparent from the summary of the relevant events, there is a factual controversy regarding whether the Applicant posted the notice of objection to the ATO with the private ruling application received by the ATO on 14 January 2020 and whether he posted the letter seeking to engage s 14ZYA by requiring the Commissioner to make a decision on the alleged objection to the ATO on 16 April 2020.

24. The Applicant urged me to resolve this controversy. Initially, I understood the Applicant to say that was necessary in order to resolve whether the Tribunal had jurisdiction to hear and decide the first application for review. For the reasons set out below, I consider that it is not necessary for me to decide whether the Applicant posted the notice of objection and letter dated 16 April 2020 to the ATO.

25. However, as the hearing progressed it became clear that the Applicant wanted me to resolve whether the notice of objection and 16 April 2020 letter were sent to the ATO when he says they were in order to provide a factual foundation for the Tribunal’s jurisdiction to consider the second application for review. The Applicant submitted that, as a Senior Member of the Tribunal, I could rule on any matter before the Tribunal - including, as I understood the submission, whether he posted these documents to the ATO, for the purposes of determining whether the Tribunal has jurisdiction to hear and decide the second application for review.

26. I understand the Applicant’s desire to exercise review rights in relation to the taxation treatment of his superannuation benefits as quickly and efficiently as possible. Additionally, I am mindful that the Tribunal carries out its functions under a statutory command to pursue the objective of providing a review mechanism that is, amongst other things, “economical, informal and quick”.[12] But of course that objective may only be pursued according to law and the requirements of procedural fairness.

    [12] AAT Act, s 2A.

27. Having decided for the reasons noted below that – for the purposes of determining whether the Tribunal has jurisdiction to hear and decide the first application for review – I do not need to make a finding regarding whether these documents were posted to the ATO as the Applicant asserts, I have concluded it would not be appropriate for me to do so. There are a number of reasons for that conclusion.

28. First, it is not clear to me that, as the Applicant asserted at the hearing, I have jurisdiction to make findings of fact relating to, or otherwise deal in any way, with the second application for review.  I have been constituted as the Tribunal for the purposes of the first application for review.[13] Not surprisingly, since it was apparently filed about an hour before the hearing on the afternoon of 19 June 2020, I am not constituted as the Tribunal for the purposes of the second application for review.

    [13] AAT Act, s 19A.

29. Secondly, even if I am so empowered, I would not make such findings in the circumstances prevailing at the conclusion of the hearing.  The evidence before me is not such that it is clear one way or the other whether the Applicant in fact posted the two documents to the ATO. Neither the Applicant nor the Commissioner’s officers have given sworn evidence regarding these matters. In those circumstances, it would be inappropriate to make findings that are not necessary to resolve the question of the Tribunal’s jurisdiction to hear and decide the first application for review, which is the only proceeding which I am constituted as the Tribunal to hear and decide.

    HAD THE COMMISSIONER MADE AN OBJECTION DECISION WHEN THE FIRST APPLICATION FOR REVIEW WAS FILED?

30. Asked at the hearing to specify the decision he maintains is the objection decision actually made by the Commissioner, the Applicant referred to an ATO “Case Notes Report” which contained this entry apparently created by an ATO Team Leader on 17 February 2020: [14]

    Summary:       Decision approved

    Test:               Decision approved.

    Objection is invalid.

    [14] Respondent’s Submissions, dated 3 June 2020, Exhibit D: ATO Case Notes Report, page 2.

31. That entry is preceded by an entry by another officer on 17 February 2020 which includes this notation:

    Text:    Case will (sic) closed – nil outcome.

32. These entries are followed by an entry apparently created by the same officer on 19 February 2020 which includes this notation:

    Text:    CVR run – nil errors – case closed – nil outcome

33. I am not satisfied on the basis of these entries, nor the surrounding context including transcripts of telephone conversations and correspondence between the Applicant and the ATO, that the Commissioner has made an objection decision. As in the case of The Trustee for Oenoviva (Australia & New Zealand) Plant and Equipment Trust and Commissioner of Taxation,[15] where the Tribunal found no objection decision had been made:

    The Commissioner has not purported to make an objection decision and has not described any decision he has made as an objection decision. In fact, he has denied doing so.[16]

    [15] [2013] AATA 253.

    [16] [2013] AATA 253, [4].

34. The decisions that may be made by the Commissioner in respect of a valid notice of objection are to allow the objection wholly or in part or disallow the objection.[17] There is no basis on which I could conclude that the Commissioner had made a decision to allow or disallow an objection. There is no evidence that any such decision was made by any of the Commissioner’s officers. The only decision apparently made was that a valid notice of objection had not been lodged, which is not a decision to allow or disallow an objection.

    HAD AN OBJECTION DECISION BEEN DEEMED TO HAVE BEEN MADE WHEN THE FIRST APPLICATION FOR REVIEW WAS FILED?

    [17] TAA, s 14ZY.

35. In considering this issue, I assume for this purpose only, and without deciding, that the Applicant posted the notice of objection and the letter dated 16 April 2020 to the ATO when he says he did so.

36. It is not necessary for me to decide whether the Applicant actually did so, because even assuming these facts it is clear that a decision could not have been taken by s 14ZYA of the TAA to have been made at the time the first application for review was filed on 5 May 2020. As at that date the period of 60 days required by s 14ZYA could not have elapsed since the notice contained in the 16 April 2020 letter was given to the Commissioner.

37. Similarly, even if the notice of objection was posted to the ATO as the Applicant asserts, the handwritten notation on the notice of objection would not have been effective to engage s 14ZYA as the 60-day period after which such a notice could be given had not expired or even commenced at that time.

    DISPOSITION OF THE APPLICATION FOR REVIEW

38. Since I have concluded that neither of the two bases for the Tribunal’s jurisdiction submitted by the Applicant is satisfied, I must dismiss the first application for review.[18] 

    [18] I make no findings or decision in respect of the Tribunal’s jurisdiction to hear and decide, or otherwise in respect of, the second application for review.

I certify that the preceding 38 (thirty -eight) paragraphs are a true copy of the reasons for the decision herein of Senior Member R Olding

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Associate

Dated: 22 June 2020

Date of hearing:	19 June 2020
Representative of the Applicant:	Unrepresented
Solicitors for the Respondent:	J Lye, Australian Government Solicitor