Ross and Commissioner of Taxation (Taxation)

Ross and Commissioner of Taxation (Taxation) [2023] AATA 2495 (11 August 2023)
Division:TAXATION AND COMMERCIAL DIVISION
File Number(s): 2016/4915- 2016/4918
Re:ALEXANDRA LEIGH ROSS
APPLICANT

AndCOMMISSIONER OF TAXATION
RESPONDENT

File Number(s): 2016/4850-2016/4859
ALEXANDRA LEIGH ROSS IN HER CAPACITY AS THE PERSONAL REPRESENTATIVE OF THE ESTATE OF SHANE ANTHONY ROSS (DECEASED)Re:
Applicant

AndCOMMISSIONER OF TAXATION
RESPONDENT

DECISION
Tribunal:Deputy President I R Molloy
Date:11 August 2023
Place:Brisbane

2016/4915- 2016/4918
1.    The objection decision in respect of Alexandra Leigh Ross for the income year ending 30 June 2013 is affirmed.
2.    The objection decision in respect of Alexandra Leigh Ross for the income year ending 30 June 2014 is varied so as to a substitute a penalty of 50% of the shortfall amount due to recklessness and otherwise is affirmed.
3.    The applications to remit penalties or shortfall interest in full or in part are refused.

2016/4850-2016/4859
1.The objection decisions in respect of Shane Anthony Ross (now the Estate of Shane Anthony Ross) for the years ending 2009, 2010, 2012, 2013 and 2014 are affirmed.
2.The applications to remit penalties or shortfall interest in full or in part are refused.

............................[SGD].............................
Deputy President I R Molloy

Catchwords
Asset betterment – assessable income – shortfall interest – taxable income – tax related liability – penalty assessment – base penalty amount – administrative penalty
Legislation
Taxation Administration Act 1953 (Cth)
Income Tax Assessment Act 1936 (Cth)
Cases
Commissioner of Taxation v Ross [2021] FCA 766
Blackman v Commissioner of Taxation [1993] FCA 345
Morales v Minister for Education [1998] FCA 334
Bosanac v Federal Commissioner of Taxation [2019] HCA 41
Commissioner of Taxation v Dalco (1990) 168 CLR 614
Ma v Federal Commissioner of Taxation (1992) 37 FCR 225
Gashi v Commissioner of Taxation (2013) 209 FCR 301
BRK (Brisbane) Pty Ltd v Federal Commissioner of Taxation [2001] FCA 164
FCT v R&D Holdings Pty Ltd (2007) 160 FCR 248
Howard v Commissioner of Taxation [2012] FCAFC 149
Hancox v FCT (2013) 214 FCR 25
Binetter v Federal Commissioner of Taxation (2016) 249 FCR 534
Secondary Materials
Miscellaneous Taxation Ruling 2008/1
REASONS FOR DECISION
11 August 2023

These are applications for review of objection decisions made by the Commissioner of Taxation (the Commissioner or the respondent) concerning the applicant, Alexandra Ross and her late husband Shane Ross. Mrs Ross has continued the proceedings commenced by Mr Ross pursuant to a direction that she be substituted as the personal representative of his estate.
The objections were to default and amended assessments made on an ‘asset betterment’ basis pursuant to s 167 of the Income Tax Assessment Act 1936 (Cth) (ITAA36). This is a rehearing following appeals and cross-appeals to the Federal Court.[1] At the commencement of the hearing, counsel for the applicant said that his client withdrew a previous request for ciphers which were previously in place protecting the taxpayers’ identities.
[1] Commissioner of Taxation v Ross [2021] FCA 766 (Ross FCA).
The orders of the Federal Court included relevantly:
4. Matters numbered 2016/4850 – 2016/4859 and 2016/4915 – 2016/4918 be remitted to the Administrative Appeals Tribunal for re-hearing according to law and in accordance with these reasons without the hearing of further evidence.
In determining that the proceedings should be remitted for re-hearing without the hearing of further evidence, the Court said that it recognised that it had concluded that the evidence adduced by the taxpayers was insufficient to satisfy the onus under s 14ZZAK(b)(i) of the Taxation Administration Act (TAA). The Court said, however, that it had reached that conclusion only in the context of the Commissioner’s submissions that the appeals should not be remitted. The Court went on to say that ‘any Tribunal re-hearing the appeals will make of those conclusions what it will’. [2]
[2] Ross FCA [349].
Both parties submitted, and I accept, that my role is to make factual findings afresh and to decide the proceedings for myself.[3] The applicant submitted that ‘where, as here, the [previous] Tribunal made findings favourable to Mr Ross and Mrs Ross, the Tribunal should accept those findings’.[4] I take the situation to be that where a matter is remitted the Tribunal may have regard to the previous findings, ‘but it will be the responsibility of the Tribunal which ultimately decides the case to determine for itself the facts’.[5]
[3] Respondent’s Rehearing Submissions dated 16 December 2022 (“Respondent’s Submissions”), [12]; Applicant’s Reply dated 18 January 2023 (“Applicant’s Reply”), [32].
[4] Applicant’s Submissions, dated 8 November 2022 (“Applicant’s Submissions”), [5].
[5] Blackman v Commissioner of Taxation [1993] FCA 345 [14] (per Gray J, Keely J agreeing); Morales v Minister for Education [1998] FCA 334 (Black CJ, Burchett & Tamberlin JJ).
BACKGROUND
In October 2015, the Commissioner concluded a covert audit of the affairs of Mr Ross and Mrs Ross. The audit of Mr Ross’s affairs concluded that he had failed to disclose assessable income over the relevant income years in an amount totalling approximately $843,989, resulting in a tax shortfall of $353,042. In respect of Mrs Ross, the audit concluded she had failed to disclose assessable income in an amount totalling approximately $466,080 resulting in a shortfall of $192,420.
This resulted in the making of default assessments and amended assessments (all bearing the date 27 October 2015) as follows:
(a)Mr Ross:
(i)2009 – amended taxable income $154,393 (an increase of $114,703)[6];
(ii)2010 – amended taxable income $63,474 (an increase of $63,474)[7];
(iii)2012 - amended taxable income $100,478 (an increase of $31,608)[8];
(iv)2013 – amended taxable income $315,577 (an increase of $208,947)[9];
(v)2014 – amended taxable income $517,940 (an increase of $425,257);[10]
(b)Mrs Ross
(i)2013 – taxable income $195,077;[11]
(ii)2014 – amended taxable income $367,705 (an increase of $271,003).[12]
[6] Exhibit 1 (T-Documents, Shane Ross), T5, page 48.
[7] Exhibit 1, T8, page 78.
[8] Exhibit 1, T11, page 108.
[9] Exhibit 1, T14, page 139.
[10] Exhibit 1, T17, page 172.
[11] Exhibit 2, (T-Documents, Alexandra Ross), T4, page 46.
[12] Exhibit 2, T9, page 82.
In addition, the Commissioner assessed each of Mr Ross and Mrs Ross for administrative penalties. In respect of Mr Ross, the Commissioner assessed administrative penalties at a rate of 75% of the shortfall amounts for relevant income years, with an uplift of 20% for the income years after the 2009 income year. Mrs Ross was assessed for administrative penalties at a rate of 75% of the shortfall amounts for the 2013 and 2014 income years.
Each of Mr Ross and Mrs Ross objected to the assessments[13] (and the imposition of penalties).
On 15 July 2016, the Commissioner gave Mr Ross a notice of objection decision disallowing his objections in full. On 18 July 2016, the Commissioner gave Mrs Ross a notice of objection decision disallowing her objections in full. On respectively 13 and

18 July 2016 Mr Ross and Mrs Ross commenced proceedings in the Tribunal seeking to review the Commissioner’s objection decisions. The proceedings were and are being heard together.
[13] Exhibit 1, T21, pages 220 - 245; Exhibit 2, T13, pages 128 - 143.
There is no dispute between the parties that an applicant for review of an assessment pursuant to s 167 of the ITAA36 has the burden of proving, on the balance of probabilities, that the assessment is excessive or otherwise incorrect and what the assessment should have been. The Federal Court, constituted by Derrington J, considered the nature of that burden of proof, particularly in the context of a challenge to a default assessment founded on the ‘asset betterment method’. [14]
[14] FCA Ross, [46] – [48].
Amongst other things the Federal Court said:[15]
[15] FCA Ross, [48] (footnotes omitted).
(2)       The assessment by the “asset betterment method” is a legitimate form of assessment: Trautwein at 86 – 87, 99 – 100 and 105; even though it necessarily involves an amount of guesswork and, whilst almost certainly inaccurate to some extent, it is no part of the Commissioner’s duty to establish what judgment he has formed in making a s 167 assessment: Gashi [55]; George v Federal Commissioner of Taxation (1952) 86 CLR 183 (George) at 204. Clearly enough, any inaccuracy follows from the circumstances which impel the Commissioner to make a default assessment, being that a process of calculating assessable income less deductions is not possible: Rigoli [12].
(3)       It is not part of a review of an objection decision concerning an assessment under s 167 to seek to identify the facts the Commissioner adopted for the purpose of making the assessment and whether those facts disclose a taxable income: Gashi [55]; George at 204. The principal fact which the Commissioner is required to determine in making an assessment pursuant to s 167 is “the amount of income upon which … income tax ought to be levied”: Gashi [56].
(4)      It is insufficient to discharge the burden under s 14ZZK(b)(i) in relation to an assessment under s 167, whether based on the asset betterment method or otherwise, to merely demonstrate that the Commissioner formed a judgment about the taxpayer’s taxable income on a wrong basis and that the amount assessed far exceeded the taxpayer’s taxable income: Gashi [62]; Rigoli [12].
(5)      In order to establish that an assessment under s 167 is excessive, a taxpayer must positively prove their “actual taxable income” and, in doing so, must demonstrate that the amount of tax levied by the assessment exceeds their actual substantive liability: Gashi [63]; Dalco at 623 – 625; Trautwein at 88; Ma v Federal Commissioner of Taxation (1992) 37 FCR 225 (Ma) at 230; by, in effect, furnishing a return of actual income which involves establishing both sides of the equation: Bosanac v Commissioner of Taxation (2019) 267 FCR 169 (Bosanac (FC)) [57].
(6)      In the context of a s 167 assessment based on the asset betterment method, the taxpayer must demonstrate that the identified unexplained accumulated wealth was derived from non-income sources and that may be achieved by an accepted denial of any undisclosed source of income, providing acceptable evidence of how the taxpayer spends their time, and demonstrating a reasonable explanation for any appearance of the possession of assets: Ma at 230; Gashi [64] – [65]. The taxpayer must account for the unexplained increase in assets by explaining the source of those assets and identifying that those sources are not taxable. “[I]f the disclosed “actual” taxable income does not explain the increase in assets, then the taxpayer is unlikely to have discharged the burden of establishing the assessment is excessive”: Gashi [65].
(7)      The converse is that it is insufficient for a taxpayer to prove that an item in their asset betterment statement was wrong or should not have been included: Gashi [63] – [67]; Rigoli [12]. If they do not also satisfactorily explain the source or sources for the other unexplained wealth, that is that they were derived from non-income sources, the onus under s 14ZZK(b)(i) will remain unsatisfied: Gashi [66]. A deficiency in proof of the excessiveness of the assessment results in the challenge failing: Dalco at 624 – 626. Necessarily, this prevents a successful challenge to an assessment being made by a process of “picking and choosing” part or parts of the increased wealth relied upon by the Commissioner and attacking them as being improperly included as part of the taxpayer’s taxable income: Gashi [66]; Rigoli [25]. A process which involves attacking elements of the Commissioner’s calculation and facts in respect of which the taxpayer chooses to lead evidence is not sufficient. The same is true for a default assessment not based on the asset betterment method: Rigoli [12].
(8)       These principles can result in a situation where the default assessment can be assumed to be inaccurate in some respects but, in the absence of the taxpayer establishing what their actual taxable income was, it must nevertheless stand: Gashi [77] – [79]; Woellner and Zetle, “Satisfying The Taxpayer’s Burden Of Proof In Challenging A Default Assessment – The Modern Labours Of Sisyphus?” [2014] JlALawTA 11.
(9)       The ultimate question in Part IVC proceedings relating to an assessment made under s 167 is whether the amount of the assessment is excessive. That places no burden on the Commissioner to show that the assessments were correctly made: Dalco at 623 – 624. The manner in which the taxpayer can discharge the burden may vary with the circumstances but “absent agreement with the Commissioner to confine the issues for determination in a Pt IVC proceeding, the Commissioner is entitled to rely upon any deficiency in the taxpayer’s proof of the excessiveness of the amount assessed in seeking to uphold the assessment”: Gashi [61]. See also Dalco at 624.
(10)     There may be cases where the amount of taxable income depends upon the legal complexion of known facts or upon specific factual questions. In such a case, a taxpayer may successfully discharge the onus by establishing that the Commissioner included in their taxable income amounts which ought not to have been included: Dalco at 624. However, such a situation would only arise where the Commissioner agrees to a process which is different to that described above by confining the scope of the dispute between him and the taxpayer to certain enumerated amounts. One might expect some clear expression of that agreement, involving as it does an abandonment of the advantages accorded to the Commissioner in s 167 in respect of defaulting taxpayers.
This is not a case in which the Commissioner in respect of any of the assessments has agreed to confine the scope of the dispute between himself and either taxpayer to certain enumerated amounts or to any specific matters of fact or law. The Commissioner made certain concessions in the previous hearing in relation to a few specific amounts included in the Asset Betterment Statements.
The concessions did not alter the onus on the applicant to adduce evidence sufficient to establish on the balance of probabilities the true amount of the taxable income (making such use of the concessions as is available) and that the amount of income as determined by the Commissioner exceeded the true amount.[16] That onus is not satisfied by merely showing (including by way of concession) that elements in the Commissioner’s Asset Betterment Statement are wrong.
CONSIDERATION
[16] Bosanac v Federal Commissioner of Taxation [2019] HCA 41 [29] (Nettle J).
Alexandra Ross
Mrs Ross’s evidence is contained in her witness statement dated 20 January 2017,[17] two short affidavits sworn on 2 and 8 November 2017,[18] and her oral evidence in the original hearing.[19] Her witness statement was described in her submissions as having ‘evident shortcomings in its preparation’. Part of her evidence was she did not lodge a 2013 income tax return because she understood her income did not reach the threshold requiring lodgement of a return.[20]
[17] Exhibit 13.
[18] Exhibits 14 and 15.
[19] Transcript, commencing P-203.30.
[20] Transcript, P-209.40-45.
Mrs Ross’s case relied substantially on an analysis of the bank accounts identified in the Commissioner’s audit which, it was submitted, when properly analysed show her true taxable income. Her advisors have provided an analysis of those accounts in the form of schedules to the Applicant’s Submissions. One particular difficulty for the applicant, with this approach, is that it is dependent on the taxpayer showing by evidence that the only receipts which could possibly be income were amounts paid into those bank accounts. [21]
[21] Ma v Federal Commissioner of Taxation (1992) 37 FCR 225, 232 (Burchett J).
Mrs Ross did not give evidence that the bank accounts she refers to, and which the Commissioner referred to, were her only bank accounts. This was expressly conceded on her behalf.[22] The applicant submitted, however, that it was not suggested in either the audit or cross-examination that there were other unidentified bank accounts. The onus, nonetheless, is on the taxpayer to prove her actual taxable income. The Commissioner is entitled to rely upon deficiencies in the evidence.
[22] Applicant’s Reply, [64].
There is an absence of evidence that satisfies me that Mrs Ross had no other bank accounts into which there were deposits of income taxable in her hands in the relevant years.
The applicant pointed out that in the years in question, 2013 and 2014, Mr Ross made many transfers of funds from accounts in his name into known bank accounts in Mrs Ross’s name. The applicant submitted that these deposits cannot then be regarded as assessable income in the hands of Mrs Ross. The applicant went as far as submitting that ‘money transferred by one domestic partner to the other cannot answer the description of assessable income’. I cannot accept that submission.
The applicant did introduce a qualification to the submission, so as to contend that ‘where the evidence is that Mrs Ross was not in employment’ amounts transferred to her account by Mr Ross cannot be regarded as her assessable income. Even then such transfers may or may not be assessable income in the hands of Mrs Ross. It depends upon the facts. I cannot draw the inference that all or any of these deposits are not part of her assessable income. The evidence is not sufficient to draw that conclusion.
In addition to the above, I refer to the following matters particular to the relevant years in deciding whether Mrs Ross has discharged the onus.
Alexandra Ross – 2013 Income Year
In respect of 2013, Mrs Ross submitted that ‘on the evidence it is evident that the Commissioner’s 2013 calculation is fundamentally flawed.’[23] However, while there is an onus on the taxpayer to prove by evidence her actual taxable income, the Commissioner carries none, that is, the Commissioner carries no onus to establish the assessments were correctly made. Nor is there any statutory requirement that the assessments should be sustained or supported by evidence.[24]
[23] Applicant’s Submissions, [34].
[24] Gauci v Federal Commissioner of Taxation (1975) 135 CLR 81, 89 (per Mason J).
The applicant, focusing on the Commissioner’s asset betterment calculation, took particular issue with the purchase, value, and sale of a Mercedes Benz ML63 motor vehicle. The Commissioner submits this is a flawed approach: a taxpayer does not discharge the onus by establishing particular entries in the Commissioner’s calculation are incorrect. I accept that submission, but, in any event, the evidence the applicant relies on is unsatisfactory or deficient. In respect of the Mercedes Benz the Federal Court observed that Mrs Ross ‘had given somewhat inconsistent evidence’.[25] Looking at the evidence for myself I reach the same conclusion.[26]
[25] Ross FCA [129].
[26] Transcript, PP-204.10-25; 206.10-20; 214.30-45; 216.40-45;217.13-20.
Mrs Ross said in the 2013 income year (and in 2014) her only sources of income were from Centrelink and from her work as a bookkeeper for Compass Pools. She said, however, that she and Mr Ross ‘topped up personal accounts from the [Sross] trust account when we wanted more money for personal expenditure’. As the Commissioner submitted, and I accept:
… there was evidence as to topping-up her personal account in the 2013 financial year from the Trust. There was no evidence by way of income tax returns or financials from the Trust, which could have supported her position. Further [Mrs Ross], did give evidence regarding a dog breeding business, that from that business she could have contributed to the funds held in the trust account.

Mrs Ross has not provided substantiating evidence, by way of base documents, to support deductions. As the respondent submits,[27] establishing ‘actual taxable income’ involves establishing both sides of the equation.
[27] Respondent’s Submissions [85].
Mrs Ross did not lodge an income tax return for the 2013 income year because she claimed to have understood that her level of income did not reach the threshold where a return was required. The case she now advances is her assessable income did (slightly) exceed that threshold. There is no satisfactory explanation, however, for this change in position, or how Mrs Ross came to understand she was not required to lodge a tax return.
Mrs Ross submitted that the manner in which a taxpayer discharges the burden of proving actual assessable income varies with the circumstances of the case.[28] But the method adopted by Mrs Ross, and the evidence she has provided, does not satisfy me that the onus cast upon her has been discharged.
[28] Commissioner of Taxation v Dalco (1990) 168 CLR 614; Ma v Federal Commissioner of Taxation (1992) 37 FCR 225; Gashi v Commissioner of Taxation (2013) 209 FCR 301.
Mrs Ross has not proved her actual taxable income in relation to the 2013 income year and therefore has not discharged the onus upon her in respect of the default assessment for that year.
Alexandra Ross – 2014 Income Year
Mrs Ross took issue with the Commissioner:
(a)attributing to her as an asset worth $189,195, representing half of the cost (including stamp duty) of the acquisition of real property at Maudsland acquired in joint names, where she made no contribution to the purchase price or other costs of acquisition or maintenance and received nothing on its eventual sale;
(b)not excluding from the calculation of her assessable income an amount of $60,000 loaned to her by her father in November 2013;
(c)not excluding from the calculation of her assessable income the amount of $75,000 representing the proceeds of sale of the ML63 vehicle received in May 2014;
(d)
not excluding from the calculation of her assessable income the amount of $21,491.40 representing gambling winnings deposited to her bank account in

July 2013.
Thus, the applicant identified particular items in the Commissioner’s asset betterment calculation, and her evidence was directed at showing the assessment under s167 of the ITAA97, based on the asset betterment method, was in error.[29] But the asset betterment method, and the resulting assessment, is necessarily a guess to some extent, and almost certainly inaccurate in fact.[30]
[29] FCA Ross, [48(4)].
[30] Gashi v Commissioner of Taxation (2013) 209 FCR 301 [55].
As the Commissioner submitted, in order to establish that an assessment under s167 is excessive, the taxpayer must positively prove her ‘actual taxable income’ and, in doing so, must demonstrate that the amount of tax levied by the assessment exceeds her actual substantive liability by, in effect, furnishing a return of actual income which involves establishing both sides of the equation.[31]
[31] FCA Ross, [48(5)]).
I am not satisfied that Mrs Ross has discharged the onus in respect of the 2014 income year. I refer to the absence of evidence that there were no other bank accounts into which she might possibly have received taxable income, her proposition concerning transfers from her late husband, an inconsistency in her evidence that her own sources of income were from Centrelink and Compass Pools when she accepted she received income from or via the trust, the absence of substantiating evidence concerning actual income via the trust, income from dog-breeding, and an absence of any satisfactory evidence concerning deductions.
Mrs Ross has not proved her actual taxable income in relation to the 2014 income year.
Alexandra Ross – Penalties
In respect of the 2013 income year, an assessment of an administrative penalty for failing to provide a document,[32] pursuant to s 284-75(3) of Schedule 1 of the TAA was issued.
[32] Exhibit 2, T5 at 49-50.
The Commissioner considered, pursuant to s284-75(3), that Mrs Ross failed to lodge an income tax return for the 2013 income year, that the document was necessary to determine her tax-related liability accurately, and the Commissioner determined the tax-related liability without the assistance of that document. Pursuant to s 284-90, item 7, the base penalty amount under s 284-75(3) is set as 75% of the tax- related liability.
Mrs Ross submitted that there was no tax shortfall as her taxable income fell below the tax- free threshold.[33] However, the amount now claimed by Mrs Ross to have been earned in the 2013 income year, although not accepted as correct, points to an amount which is more than the tax-free threshold. I am satisfied that the penalty is appropriate.
[33] Applicant’s Submissions, [141].
A penalty for the failure to lodge documents on time was also issued.[34] However, as the Commissioner submits, that penalty for the failure to lodge documents on time was not the subject of any objection by Mrs Ross, hence it is not before the Tribunal.
[34] Exhibit 2, T6, pages 51-52.
As to the 2014 income year, an assessment of administrative penalties for making a false or misleading statement to the Commissioner pursuant to s284-75(1) of Schedule 1 of the TAA was issued.[35] The Commissioner considered the conduct of Mrs Ross was that of intentional disregard, and hence a penalty amount of 75% applied (item 1 of s284-90(1) of Schedule 1 of the TAA).
[35] Exhibit 2, T10, pages 86-87.
The Commissioner submitted that the false or misleading statements in Mrs Ross’s income tax return for the 2014 income year were:
(a)the income amounts reported, were false or misleading because such amounts did not include all of her assessable income for the 2014 income year;
(b)the quantum of the income not declared was of such an amount that it could not have been accidentally overlooked; and
(c)even if the income was generated by business, it was still income received by Mrs Ross, and for her benefit, which is supported by the level and nature of expenditure by Mrs Ross.
The Commissioner contended that the bare assertions made by the applicant do not discharge her onus in relation to the penalty assessment. The Commissioner submitted that the evidence furnished does not prove that her conduct did not fall short of ‘recklessness or intentional disregard for the law.[36] The Commissioner referred to Miscellaneous Taxation Ruling 2008/1, generally and particularly at [109]-[116].
[36] Respondent’s Submissions, [113].
Recklessness attracts a penalty amount of 50% of the shortfall (under item 2 of s284-90(1) of Schedule 1 of the TAA) as opposed to 75% for intentional disregard (under item 1). In descending order item 3 of Schedule 1 provides for a penalty of 25% for failure to take reasonable care.
The Commissioner submitted that none of the circumstances which can, in effect, eliminate or reduce the base penalty apply in the present case.[37] In Mrs Ross’s case, according to the Commissioner, the base penalty amount is not eliminated or reduced, as the statements she made were not derived from advice from the Commissioner, the application of general administrative practice, or from a statement in a Commissioner-approved publication.[38]
[37] Section 284-90(1) and s 284-224 of Schedule 1 to the TAA.
[38] Sections 284-224(1)(a), 284-224(1)(b) and 284-224(1)(c) of Schedule 1 to the TAA.
The Commissioner ultimately submitted that I should find that Mrs Ross’s shortfall amount resulted from intentional disregard notwithstanding the earlier reference in his submissions to ‘recklessness or intentional disregard’. That is, the base penalty amount of 75% should be adopted, which is attributable to Mrs Ross’s intentional disregard.
As the applicant submitted, including by reference to the Commissioner’s submissions,[39] intentional disregard of the law requires more than reckless disregard of, or indifference to a taxation law. It is more than ignorance or genuine misunderstanding of a taxation law. There must be actual knowledge that the statement made is false. Mrs Ross must have understood the effect of the relevant legislation and how it operated in respect of her affairs and made a deliberate choice to ignore the law.
[39] Respondent’s Submissions, [46].
The applicant referred to the decision of Cooper J in BRK (Brisbane) Pty Ltd v Federal Commissioner of Taxation[40] where his Honour said
…Recklessness in this context means to include in a tax statement material upon which the ITAA 1936 or Regulations are to operate, knowing that there is a real, as opposed to a fanciful, risk that the material may be incorrect, or be grossly indifferent as to whether or not the material is true and correct, and that a reasonable person in the position of the statement-maker would see there is a real risk that the ITAA 1936 and Regulations may not operate correctly to lead to the assessment of the proper tax payable because of the content of the tax statement. So understood, the prescribed conduct is more than mere negligence and must amount to gross carelessness.
[40] [2001] FCA 164; (2001) 46 ATR 347 [77] (“BRK”). The applicant also referred to the following cases: FCT v R & D Holdings Pty Ltd (2007) 160 FCR 248, 260 – 261 [70] per Heerey and Edmonds JJ and at 270 [109] per Stone J; and in Howard v Commissioner of Taxation [2012] FCAFC 149 [56]; see also Hancox v FCT (2013) 214 FCR 25 [56] to [58].
For the applicant it was submitted that her conduct did not amount to intentional disregard of a taxation law, or to recklessness as properly understood and explained by Cooper J in BRK. The applicant submitted that she clearly exercised reasonable care in the conduct of her taxation affairs and has relied upon the services of a registered tax agent to assist her and lodge the necessary return.
In all the circumstances, including the matters relied on by the Commissioner, my findings above, and what was said in BRK, I am satisfied that Mrs Ross’s conduct did not result from intentional disregard of a taxation law so as to attract a penalty of 75% of the shortfall amount. I am, however, satisfied that her conduct was due to recklessness and so attracts a penalty of 50% of the shortfall amount.
Mrs Ross also submitted that the Tribunal should remit the penalty in part or in full, pursuant to s 298-20 of Schedule 1 of the TAA having regard to the circumstances of the case including the unfortunate and untimely death of Mr Ross resulting in Mrs Ross becoming a widow with the care of three children, one of whom has a disability.
The Commissioner submitted that s 298-20 does provide a broad discretionary power to remit, however, that does not involve reliance on the general personal circumstances of the taxpayer.[41] Rather, the question was whether there was something in the circumstances which was not divorced from the contravening conduct for which the penalty was imposed.[42]
[41] FCA Ross, [219].
[42] FCA Ross, [219].
The Commissioner submitted that the applicant’s submissions did not advance any particular relevant circumstances of Mrs Ross to support the contention for remission.
I am satisfied that it is not appropriate to remit any of the penalties in the circumstances of this case.
Alexandra Ross – Shortfall Interest Charge
Section 280-160(1) of Schedule 1 of the TAA allows for remission in whole or in part of the Shortfall interest Charge (SIC) payable if it is considered fair and reasonable to do so. Mrs Ross submitted that the SIC should be remitted in full.
However, as the Commissioner submitted, s 280-170 of Schedule 1 of the TAA provides that a taxpayer can only object against the remission of the SIC if the amount of the SIC that was not remitted is more than 20% of the additional amount of income tax. The Commissioner set out the relevant position as follows:

Year

Additional Tax

Interest

Percentage

2013

$72,716.75

$14,695.39

20.21%

2014

$119,703.50

$6,200.65

5.18%

As such, there is no ability to object to SIC for the 2014 income year.
The Commissioner contended that it is not appropriate in the present case for the SIC to be remitted for the 2013 income year, in circumstances where there is a finding of a failure to lodge a required document. The Commissioner further submitted it would not be fair and reasonable to remit the SIC if there is a finding of recklessness or intentional disregard on the part of Mrs Ross.
The Commissioner also contended that there has not been any delay in commencing or conducting the audit in the present case, and there is no delay attributable to the Commissioner. In the circumstances, the Commissioner contended, the SIC should not be remitted, in part or in full.[43]
[43] Respondent’s Submissions [172].]
The applicant submitted that the SIC should be remitted but did not advance any relevant facts or circumstances that satisfies me that the SIC should be remitted in part or in full.
Alexandra Ross – Conclusion
Mrs Ross has not discharged her onus of proof to establish that the default assessment for either the 2013 or 2014 income year is excessive, and furthermore what either of those assessments should have been. She has not satisfied me that the penalty assessment for the 2013 income year should not be affirmed. I am satisfied that the penalty in respect of the 2014 income year should be varied to 50% of the shortfall amount due to recklessness. Mrs Ross has not established that any of the penalties or the SIC should be remitted.
Shane Ross (deceased)
For the income years 2009, 2010, 2012 and 2013 the Commissioner relied on the ‘fraud or evasion’ exception in s 170 of the Income Tax Assessment Act 1936 (Cth) (ITAA36) to the statutory time limit on the making of an amended assessment. In relation to the 2014 income year the amended assessment was made within the statutory time limit.
The Commissioner submitted that if I accept that the onus of proof in relation to the amended assessments for these relevant years has not been discharged, then I would not be satisfied that the onus to disprove evasion would be satisfied. I will return below to whether the applicant has discharged the onus of disproving in this case evasion on the part of Mr Ross.
The case for Mr Ross focused substantially on showing that various deposits to his accounts came from non-assessable sources. The Commissioner described this approach as flawed. The Commissioner pointed to the applicant’s submissions in which particular amounts were said to have been included as income which ought not to have been included as income.[44] The Commissioner submitted that this ‘picking and choosing’ approach will not result in a successful challenge.[45]
[44] Applicant’s Submissions, [65] – [122].
[45] FCA Ross, [48(7)].
The applicant submitted that Mr Ross gave evidence that he had not generated any income in the relevant years, other than that identified in his affidavits. I accept the Commissioner’s submission that this is inconsistent with other evidence before the Tribunal. But moreover, contrary to the applicant’s submission that there is no reason not to accept Mr Ross’s evidence, I find his evidence, overall, is inherently implausible and unacceptable. This does not just have an impact on a particular year or years but leads me to determine that I cannot accept his evidence in respect of any of the years in question in the absence of sufficient and reliable contemporary documentation or other independent objective evidence.
I refer, for example, to Mr Ross’s evidence in his affidavit sworn on 2 November 2017. [46] Mr Ross referred to entries in various bank statements which potentially suggested levels of income in excess of what was revealed in his income tax returns. He states inter alia:
[46] Exhibit 5, Affidavit of Shane Ross sworn 2 November 2017.
(a)On 17 September 2012, $34,045.42 was deposited into one of his ANZ accounts, which he believes ‘must have been a cheque for winnings from betting either on football or horses at the pub’ because he was being paid cash in whole dollars at the time for his services.[47]
[47] Exhibit 5, [3].
(b)He was working as a contractor at the time (late 2012) providing labour services for concreters. He was always paid in cash. This was why he had cash available to bet at pubs.[48] Yet there is no detail of the cash income, its source/s or the amount of cash expended on his betting.
[48] Exhibit 5, [3].
(c)He said he had not generated any other income in the 2009 to 2014 financial years other than the income identified in the bank statements discussed in his affidavit.[49] This is inconsistent with his claim that (at least in late 2012) he was always paid in cash, and he had cash income available for his betting.
[49] Exhibit 5, [46].
(d)Around 29 October 2012, he had accumulated $8,300 in cash from various wins on poker machines and casino tables.[50] The source of the money expended on this betting or to fund his alleged winnings resulting in $30,500 transferred from his TattsBet account to an ANZ account on 31 October 2012 is not revealed.[51]
[50] Exhibit 5, [5].
[51] Exhibit 5, [6].
(e)Mr Ross appears to have been a regular winner, including playing poker machines and casino tables, and betting on horses. Although he acknowledges some losses, there is no sufficient explanation of the source or sources of funds to finance his betting. There is an absence of detail concerning his losses.
(f)On 25 February 2013, Mr Ross received a transfer to an ANZ account of $75,000 as a loan in respect of the purchase of land at Maudsland which he intended to develop. He later sold the land and bought another property. The lender, Andy Altundag, was aware the Maudsland land was sold. Mr Ross says ‘he did not query me on how I would pay him back’.[52] Mr Altundag was summonsed to appear to give evidence at the previous Tribunal hearing, but did not answer the summons.[53]
[52] Exhibit 5, [12].
[53] Exhibit 24, Further Affidavit of Konrad Wojtasiksworn 30 January 2018.
(g)On 13 April 2013, Mr Ross and the applicant had their engagement party at the Shangri-La Hotel in Sydney. There were about 100 guests. No-one gave them gifts other than cash. They received around $44,000 in cash gifts.[54]
[54] Exhibit 5, [15].
(h)On 24 April 2013, Mr Ross deposited $5,000, $10,000 and $10,000 of the $44,000. He does not know why he made those separate deposits. ‘I only went to the bank once that day’.[55]
[55] Exhibit 5, [16].
(i)Mr Ross said he and the applicant went to the US on 26 April 2013 shortly after their engagement. He left $10,000 of the gifted cash with his mother. On or around 30 April 2013 he asked his mother to deposit the cash into one of his accounts. He does not know why there were two separate deposits of $5,000.[56]
[56] Exhibit 5, [17].
(j)On 19 August 2013, Andy Altundag, the same person who lent him $75,000 for the Maudsland land, deposited $45,000 into his ANZ account as a gift for the applicant and Mr Ross to spend on their daughter.[57]
[57] Exhibit 5, [18].
(k)On 13 September 2013, Mr Ross transferred $140,000 from Sross Enterprises Pty Ltd account to his account. The money was a loan from his accountant and friend. The loan was in respect of the Maudsland property.
(l)On 26 September 2013, a long-time friend deposited $35,000 cash into Mr Ross’s ANZ account to buy 10 Shrewsbury Avenue, Maudsland. Mr Ross repaid the lender around two years later in cash when he met with him over a number of visits to Sydney.[58]
[58] Exhibit 5, [22].
(m)‘Just prior to 9 October 2013’, Mr Ross sold an unregistered motor vehicle to a friend for $70,000.[59]
(n)’Just prior to 10 October 2013’, Mr Ross called a long-time friend. He asked for a loan of $50,000 to start a clothing company, Mostr Clothing. He has ‘paid back around $20,000 since then by handing some cash’ to the friend.[60]
(o)On 17 October 2013, Mr Ross deposited $85,000 into his ANZ account received for the sale of another car. He could only remember the buyer’s first name. He does not believe the car was ever registered in the buyer’s name.[61]
(p)On 23 December 2013, Mr Ross received $40,000 in proceeds for sale of another motor vehicle. He had purchased this vehicle around six weeks earlier and sold it ‘because I didn’t like it after driving it around for a while’. The car was never registered in Mr Ross’s name ‘prior to selling the car back on carsales.com to someone I didn’t know’.[62]
(q)
Mr Ross was incarcerated from around 13 April 2010, ‘on charges related to drugs’, up to around 13 October 2011, when he was released on parole for another

18 months. His parents put money in his bank account where bills were debited to him.[63]
(r)The money Mr Ross ‘received from drugs’ before being charged he never banked. He spent it all on partying and going out. He did not acquire any assets ‘by reason of those activities’.[64]
[59] Exhibit 5, [23].
[60] Exhibit 5, [24].
[61] Exhibit 5, [25]
[62] Exhibit 5, [27].
[63] Exhibit 5, [32].
[64] Exhibit 5, [33].

As I have said, Mr Ross gave evidence that he had not generated any income in the relevant years, other than that identified in the bank statements discussed in his affidavits.[65] That statement is inconsistent with his own evidence concerning cash payments he received as income which he then used for betting.
[65] Exhibit 5, [46].
His evidence, as outlined above, refers to seemingly casual dealings involving large sums of money, including dealings whereby he received large cash payments often in circumstances, as Mr Ross describes it, incapable of verification. I have also considered Mr Ross’s other evidence in writing[66] and his oral evidence. There may be areas of truth in what he had to say but taken as a whole I find his evidence consists of an implausible series of events generally intended to explain his receipt or access to large amounts of money without sufficient documentary or other corroborative evidence. I do not accept Mr Ross’s evidence as at all satisfactory or convincing.
[66] Exhibit 3, Statutory Declaration made 29 February 2016; Exhibit 4, Witness Statement dated 12 February 2017; Exhibit 6, Affidavit sworn 3 November 2017; Transcript, commencing P-30.
The Commissioner specifically relied on, by way of examples, the following inconsistencies in respect of the case for Mr Ross. These matters are referred to by the Federal Court but I have satisfied myself that the Commissioner’s submissions in this regard should be accepted:
(a)A deposit on 23 November 2009 for $25,000 into an ANZ account which Mr Ross claimed must have been an accumulation of savings. Mr Ross does not identify the source of these funds or whether the amount should be included in his assessable income.
(b)A deposit on 26 November 2012 for $4,504. Mr Ross gave contradictory evidence on whether this was ‘Tax paid salary’ (his notation) or gambling winnings.
(c)The significant amount of expenditure over and above the claimed level of income, as explained by the Federal Court.[67]
[67] Ross FCA, [144]-[145].
I find on the whole that I cannot accept Mr Ross was a credible witness. I am unable to find that he has discharged the onus of proof in respect of any of the income years in issue. I will say something more about each of those years.
The applicant submitted that the figures relied on by the Commissioner concluding with the amended assessments are inconsistent with the careful analysis of the bank account statements attached to the Applicant’s Submissions. That analysis, it was submitted, ought to be preferred because it is an itemised analysis of each entry in the relevant bank accounts and a careful tracing of those amounts between accounts or outside of accounts and an explanation for each entry.
The submission is that an analysis has been undertaken as to whether each item is an item of deductible expenditure or an item of assessable income or is private or domestic or involves a capital outlay. The Commissioner’s broad-brush approach, it was submitted, which was undertaken without reference to the taxpayers at all, was bound to result in inaccurate conclusions and did on this occasion.
There is no question that the Commissioner’s conclusions are to an extent a guess. But the applicant’s analysis goes nowhere near proving Mr Ross’s actual taxable income. It omits the cash income which he says he received and spent. It relies on Mr Ross’s explanations for large cash deposits, which he seeks to show were not income, but I do not wholly accept his explanations. There is insufficient corroborative evidence, including documentation, to support either deposits or alleged deductions. There is no proper or acceptable foundation for the analysis.
Shane Ross – Income Year 2009
In the 2009 income year the Commissioner increased Mr Ross’s taxable income from the amount of $39,690 as returned and assessed[68] by $114,703.00. The case for Mr Ross was that the bulk of that amount was represented by a loan of $93,000[69] made to him by a friend who was the proprietor of Peter Underhill Plumbing[70]
[68] Exhibit 1, T3, page 29 and T5, page 50.
[69] Exhibit 1, T29, page 322.
[70] Exhibit 4, [4(a)], [5] – [10] and Annexure A; Exhibit 16; Transcript PP-33-34, 41 and 224 – 230.
I accept the Commissioner’s submission that in relation to the 2009 income year, the applicant’s focus is on the Commissioner’s asset betterment calculation, including that ‘the bulk of that amount’, being the amount by which the Commissioner increased Mr Ross’s assessable income, was represented by the claimed loan, is not sufficient to prove his actual assessable income.
Proving that a particular item in the Commissioner’s calculation is in error does not establish what was Mr Ross’s actual taxable income. In any event, as the Commissioner submitted, the circumstances surrounding the purported loan were vague, there is a lack of documentation and a lack of objective evidence supporting any suggestion of a loan. For these reasons, and based on my comments above, I am not prepared to accept Mr Ross’s assertion. I also refer to my comments above.
The applicant has not discharged the onus in relation to Mr Ross’s income for the 2009 income year.
Shane Ross – Income Year 2010
The applicant pointed to a gambling receipt and seeks to explain that particular amount in relation to the Commissioner’s calculation for the asset betterment calculation. She submitted that ’[t]here is no reason to doubt Mr. Ross’s evidence in relation to these matters’.[71] I disagree for the above reasons.
[71] Applicant’s Submissions, [66]-[67].
In any event, as the Commissioner submitted, the applicant seeks to find error in the asset betterment calculation for the 2010 income year. I accept the Commissioner’s submission that this is a flawed approach in this case. Whether or not Mr Ross had success or not with gambling, for example, is not sufficient of itself to discharge the onus of proof in relation to the 2010 income year.
Shane Ross – Income Year 2012
In relation to the 2012 income year, the applicant pointed to claimed receipts from Mr Ross’s mother to suggest the Commissioner’s asset betterment calculation ‘was bound to result in inaccurate conclusions …’.
Mr Ross was incarcerated and said to be earning no income from 13 April 2010 to
[72] Exhibit 1, T9, pages 101 and 103.
13 October 2011. His mother allegedly made the mortgage payments during this period. The bank accounts and the applicant’s analysis identify numerous deposits from Mr Ross’s mother Mrs Sharon Ross. The income declared was said to be business income in an amount of $73,340.00 with deductions claimed resulting in a taxable income of $68,870.00[72].
The applicant submitted that the Commissioner’s figures are inconsistent with the analysis attached to the Applicant’s Submissions.[73] As the Commissioner submitted, this does not establish Mr Ross’s actual taxable income. And the evidence regarding the figures included in the analysis is inconsistent and unsatisfactory.[74] The applicant has not discharged the onus for the 2012 year.
[73] Applicant’s Submissions, [74].
[74] See Ross FCA, [149]-[150].
Shane Ross – Income Year 2013
In relation to the 2013 income year, the applicant sought to rely on three particular amounts in the Commissioner’s calculation, and to explain that those particular amounts should not be regarded as income, as they were a loan, engagement gifts, and gambling winnings. The applicant submitted ‘[t)here is no reason to doubt his [Mr Ross’s] evidence in this connection’.[75]
[75] Applicant’s Submissions, [75]-[82].
Approaching the matter on the basis that there were particular amounts in dispute is not the correct approach. The onus is on the applicant to prove Mr Ross’s actual taxable income and, in this case, that cannot be done by identifying items in the Commissioner’s calculation which are wrong. As to the evidence in respect of the items identified by the applicant, I have referred to some of this evidence above.
As the Commissioner submitted, the evidence regarding the alleged loans, engagements gifts and gambling winnings generally suffers from a lack of independent, contemporaneous documentary or other evidence. I do not accept Mr Ross’s evidence. His evidence seeking to explain large cash payments is implausible.
The applicant has not proved Mr Ross’s actual taxable income in relation to the 2013 income year.
Shane Ross – Income Year 2014
The applicant sought to rely on eight particular amounts in the Commissioner’s assets betterment calculation and to explain that those particular amounts should not be regarded as income:
(a)$140,000 – Loan from Platinum One Childcare Pty Ltd;
(b)$45,000 – Gift from Andy Altundag;
(c)$35,000 – Loan from Leigh Brown;
(d)$50,000 – Loan from George Tyloo;
(e)$70,000 – Sale of vehicle;
(f)$125,000 – Sale of vehicles;
(g)$12,500 – Sale of engine;
(h)$27,226.90 – Gambling winnings.
As the Commissioner submitted, the above amounts are said to be ‘…particular amounts in dispute”[76], but there are no particular amounts in dispute. The Commissioner puts the applicant to proof on all matters to discharge the onus on the applicant to prove Mr Ross’s actual assessable income.
[76] Applicant’s Submissions, [90].
Again, I have referred to some of these amounts above. There is an absence of independent, contemporaneous documentary or other evidence to support these amounts. So even if it is relevant, I simply am not satisfied that I can accept Mr Ross’s evidence in respect of these matters.
The applicant has not discharged the onus in relation to the 2014 income year of establishing Mr Ross’s actual taxable income.
Shane Ross – Avoidance of tax due to evasion

87.The Tribunal can examine whether, on the evidence before it, there was fraud or evasion and can substitute its opinion for the Commissioner’s.[77] The taxpayer bears the onus of proving that the conditions for the exercise of the amendment power did not exist.[78]
[77] Binetter v Federal Commissioner of Taxation (‘Binnetter’) (2016) 249 FCR 534.
[78] See Binetter supra at [95] per Perram and Davies JJ; Siopis J expressing agreement at [1]-[2].
The Commissioner relies on the significant disparity between Mr Ross’s expenditure in the relevant years, and the declared income, which he contends is consistent with knowing or intentional omissions.
89.The applicant submitted this is not a case where there is any evidence of Mr Ross, or his tax agent, deliberately concealing any information from the Commissioner. The evidence is consistent with a finding that they used their best endeavours to make voluntary disclosures to the Commissioner in their tax returns. [79]
[79] Applicant’s Submissions, [63].
I accept the Commissioner’s submission that the paucity and inconsistency of the evidence runs contrary to the applicant’s submission that there was no deliberate concealment of any information from the Commissioner or the exercise of best endeavours to make voluntary disclosures in Mr Ross’s income tax returns. I refer to my comments above concerning Mr Ross’s attempts to explain large cash receipts.
I am not satisfied that the onus to disprove a finding of evasion in any of the relevant income years has been discharged.
Shane Ross – Penalties
Mr Ross made false or misleading statements in his income tax returns for the relevant income years. That is to say, the income amounts reported in his income tax returns did not include all of Mr Ross’s assessable income for each of those years.
The applicable penalty, where a false or misleading statement is made, is assessed in accordance with the following formula: [80]
[80] Section 284-85 of Schedule 1 to the TAA.
Base Penalty Amount + [Base Penalty Amount x (Increase % – Reduction %)]
As the Commissioner submitted, the Base Penalty Amount for a false or misleading statement penalty, in these circumstances, is 75% of the shortfall amount, or part of it, that resulted from intentional disregard by Mr Ross or his agent. [81] The shortfall amount is the difference between the amount of tax payable on the basis of the statement and the amount of tax payable according to the law.[82]
[81] The definition of shortfall amount in s 995-1(1) of the ITAA97 read together with s 284- 80(1) of Schedule 1 to the TAA.
[82] Items 1 to 3 of the table in section 284-90(1) of Schedule 1 to the TAA; MT 2008/1 [20].
[82] Applicant’s Submissions, [137].
I accept the Commissioner’s submission that Mr Ross would have been aware, not least by his significant expenditure, that he derived amounts of income in the relevant years far in excess of what he reported. These significant amounts, both of income and expenditure, satisfy me that Mr Ross made a deliberate choice to ignore the law in his tax returns lodged during those relevant years.
It was contended by the applicant that Mr Ross’s conduct was not ‘intentional’.[83] The applicant submitted that Mr Ross provided all of his bank records and any relevant receipts to his tax agent each year before the returns were prepared. To the extent that mistakes have been made, those mistakes were innocent and in no way due to any intentional disregard of tax law or any intention to conceal amounts that clearly were of an income nature. I do not accept that.
I am satisfied that Mr Ross failed to reveal the true extent of the income he derived in the relevant income years. Instead, he significantly understated his income. I am satisfied that this was due to intentional disregard of a taxation law.
The Base Penalty Amount is increased by 20% where a base penalty amount worked out was for this type of penalty previously. In these circumstances, an uplift pursuant to s 284-220(1)(c) was applied, for the relevant income years subsequent to the 2009 income year.
As the Federal Court explained, s 284-220(1)(c) applies by its own force and applies even where multiple assessments were issued on the same day.[84] I accept the Commissioner’s submission that the uplift was appropriate.
[84] FCA Ross, [197]-[198].
The applicant submitted that I should remit the penalty in part or in full, including the uplift, pursuant to s 298-20 of Schedule 1 of the TAA. Section 298-20 provides a broad discretionary power to remit, however, as the Federal Court explained, that does not involve the general personal circumstances of the taxpayer.[85] The question is whether there is something in the circumstances which is not divorced from the contravening conduct for which the penalty was imposed.[86]
[85] FCA, Ross, [219].
[86] FCA Ross, [219].
The applicant has not advanced any relevant circumstances to support the contention for remission. I am not satisfied that it is appropriate to remit any of the penalties in the circumstances of this case.
Shane Ross – Shortfall Interest Charge
Section 280-160(1) of Schedule 1 of the TAA allows remission in whole or in part of the SIC payable if it is considered fair and reasonable to do so.
However, s 280-170 of Schedule1 of the TAA provides that a taxpayer can only object against the remission of the SIC if the amount of the SIC that was not remitted is more than 20% of the additional amount of income tax.
The Commissioner sets out the relevant position as follows:

Year

Additional Tax

Interest

Percentage

2009

$42,790.60

$18,051.50

42.19%

2010

$13,833.25

$5,181.46

37.46%

2012

$11,550.45

$1,815.93

15.72%

2013

$93,803.00

$7,479.77

7.97%

2014

$191,065.40

$5,242.05

2.74%

As such, as the Commissioner submitted, there is no ability to object to SIC for the 2012-2014 income years. The applicant did not address whether or not the requirements of s280-170 are met. I accept the Commissioner’s submission.
The applicant submitted:[87]
[87] Applicant’s Submissions, [139].
‘.. The Tribunal should also remit all shortfall interest charges imposed in respect of the relevant years’.
The Commissioner contended, and I accept, that it is not appropriate in the present case for the SIC to be remitted given the findings in respect of evasion and intentional disregard.
The Commissioner also contended, and I accept, that there had not been any delay in commencing or conducting the audit in the present case, and there is no delay attributable to the Commissioner.
In all of the circumstances the SIC applicable to the estate of Mr Ross should not be remitted, in full or in part. The estate is liable to pay the SIC, and the decision should be affirmed.
Shane Ross – Conclusion
I accept the Commissioner’s summary of the conclusions in respect of the late Mr Ross, namely, that the applicant:
(a)has failed to discharge the onus in relation to proving the assessments were excessive and what those assessments should be by proving Mr Ross’s actual taxable income in any of the relevant years;
(b)has failed to prove that there has not been evasion on Mr Ross’s part in respect of the income years for which that is a relevant issue;
(c)has failed to discharge the onus in relation to proving that the assessments in relation to administrative penalties are excessive;
(d)has not established any circumstances to warrant remission of any of the penalties or the SIC.
The objection decisions in respect of Mr Ross and now his estate should be affirmed.

I certify that the preceding one hundred and eleven (111) paragraphs are a true copy of the reasons for the decision herein of

...........................[SGD]..........................
Associate
Dated: 11 August 2023

Date(s) of hearing: 24 and 25 January 2023

Counsel for the applicant:
PE Hack KC and PG Bickford

SS

Solicitors for the applicant:

Counsel for the respondent:

Solicitors for the respondent:

Small Myers Hughes Lawyers

A Wheatley KC and JE FitzGerald

Craddock Murray Neumann

[2023] AATA 2495

11 August 2023

Key Legal Topics

Areas of Law

Tax Law

Statutory Interpretation

Administrative Law

Legal Concepts

Penalty

Standing

Year	Additional Tax	Interest	Percentage
2013	$72,716.75	$14,695.39	20.21%
2014	$119,703.50	$6,200.65	5.18%