Parekh and Commissioner of Taxation (Taxation)

This matter concerned an application for review of a decision by the Commissioner of Taxation disallowing an objection to default income tax assessments and administrative penalties for the 2014 and 2015 income years. The applicant, Richa, failed to lodge her income tax returns, leading the Commissioner to issue default assessments based on an analysis of her bank statements, which revealed unexplained deposits. The Commissioner also determined that Richa was operating a business and should have been registered for Goods and Services Tax.

The primary legal issues before the Tribunal were whether the applicant had discharged the onus of proof to demonstrate that the default assessments were excessive and to establish with certainty the correct amount of her taxable income for the relevant years. Additionally, the Tribunal was required to consider whether any special circumstances existed to mitigate the penalties imposed by the Commissioner.

The Tribunal applied the principle that the onus rests on the taxpayer to prove that an assessment is excessive. It noted that while facts can be found on uncorroborated oral evidence, self-serving statements require close scrutiny. The Tribunal found that the applicant faced significant difficulty in satisfying this burden due to a lack of contemporaneous records, particularly as her records and those of a related entity, Universal, had been seized by police. The Tribunal concluded that the applicant had not discharged the onus of proof regarding the excessiveness of the assessments or established the correct taxable income with certainty, nor had she demonstrated any special circumstances to mitigate the penalties.

The Tribunal affirmed the Commissioner's decision, meaning the default assessments and penalties were upheld.