Munkayilar and Commissioner of Taxation (Taxation)

This matter concerned an appeal by the Applicant against an amended assessment issued by the Commissioner of Taxation, and a shortfall penalty. The Applicant had claimed various work-related expenses, including clothing, self-education, and other expenses, in his tax return for the financial year ended 30 June 2018. The Commissioner disallowed these deductions, leading to the amended assessment and the imposition of a shortfall penalty. The Applicant sought to have the amended assessment and the penalty set aside or reduced.

The Administrative Appeals Tribunal was required to determine two primary issues: first, whether the Applicant had discharged his onus of proving that the amended assessment was excessive or incorrect, and if so, what the correct assessment should have been; and second, whether the shortfall penalty was excessive or incorrect, and if it should be remitted in full or in part. The Applicant bore the burden of proving that the Commissioner's assessment was wrong under section 14ZZK of the *Taxation Administration Act 1953* (Cth).

The Tribunal found that the Applicant had failed to discharge his onus regarding the claimed deductions. Specifically, the Tribunal determined that the Applicant had not incurred the Certificate IV course fees of $9,435, as he conceded the course was provided free of charge. Furthermore, the Applicant failed to provide sufficient evidence to substantiate other claimed deductions, such as work-related clothing and laundry expenses. While the Applicant had made a voluntary disclosure and reduced some claims, the Tribunal concluded that he had not demonstrated that the expenses were incurred or adequately substantiated.

Despite finding that the Applicant had not discharged his onus regarding the deductions, the Tribunal exercised its discretion under section 298-20(1) of the *Taxation Administration Act 1953* (Cth) to remit the administrative penalty by 85%. The Tribunal set aside the decision under review and substituted it with an order remitting the penalty by 85%, and otherwise affirming the Commissioner's decision.