Smith v Commissioner for Act Revenue - [2016] ACAT 25

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

SMITH v COMMISSIONER FOR ACT REVENUE
(Administrative Review) [2016] ACAT 25

AT 42/2015
Catchwords: ADMINISTRATIVE REVIEW – land tax – interest and penalty tax – interest not a reviewable decision – taxpayer engaged professionals – does not remove the taxpayer’s obligation to notify Commissioner –investigation initiated and no notice required – no voluntary disclosure by taxpayer – taxpayer did not exercise reasonable care, had no reasonable excuse and had no basis for remission

Legislation cited: ACT Civil and Administrative Tribunal Act 2008, s 68

Land Tax Act 2004 ss 8, 14, 19A, 38, 53
Taxation Administration Act 1999 ss 26, 31, 32, 33, 34, 37, 82, 101, 107A

Cases cited:Commissioner forACT Revenue v Dataflex Pty Ltd and ACT Civil and Administrative Tribunal [2011] ACTCA 14
Belconnen Premier Inn Pty Ltd v Commissioner for ACT Revenue [2014] ACAT 68
Dess v Commissioner for ACT Revenue [2015] ACAT 63
Hay v Commissioner for ACT Revenue [2014] ACAT 23
Jokhan and Jokhan v Commissioner for ACT Revenue [2012] ACAT 15
Photo Corporation of Australia Pty Ltd v Commissioner for ACT Revenue [1994] ACTAAT 91
Rawson Finances Pty Ltd v Commissioner of Taxation (2013) FCAFC 26
Scott and Anor v Commissioner of ACT Revenue [2013] ACAT 73

Steele v Commissioner for ACT Revenue [2010] ACAT 15
Talisco Pty Ltd v Sarney (1987) 18 ATR 420
Theron v Commissioner for ACT Revenue [2013] ACAT 33
Touma v Chief Commissioner of State Revenue (NSW) [2012] NSWADT 2
Wade & Tan v Commissioner for ACT Revenue [2014] ACAT 79

Tribunal: Senior Member L. Beacroft

Date of Orders: 5 April 2016
Date of Reasons for Decision: 5 April 2016

ACT CIVIL & ADMINISTRATIVE TRIBUNAL AT 42/2015

BETWEEN:
STEPHEN SMITH
Applicant

AND:
COMMISSIONER FOR ACT REVENUE
Respondent

TRIBUNAL: Senior Member L Beacroft

DATE: 5 April 2016

ORDER

The Tribunal Orders that:

1.The reviewable decision of 13 May 2015 is confirmed.

………………………………..
General President L. Crebbin
for and on behalf of the Tribunal

REASONS FOR DECISION

Background

The applicant, Mr Stephen Smith, is the owner of residential land (‘the Giralang property’) in the ACT. The Commissioner for ACT Revenue (‘the respondent’ or ‘the Commissioner’) administers the land tax and related legislation in the ACT.
On 10 June 2015 the applicant applied to the Tribunal for review of a decision by the Commissioner dated 13 May 2015 (‘the reviewable decision’) to disallow the applicant’s objection to an assessment of land tax dated 8 October 2014 (‘the assessment’).

Assessment and Objection

The issue of possible unpaid land tax came to the attention of the Commissioner and the Commissioner issued a notice (‘section 82 notice’), dated 4 August 2014, and issued a further notice, dated 25 August 2014, to a Yass address. The section 82 notices advised that an investigation had ‘commenced’ and required certain information to be provided by the taxpayer.[1]
[1] Page 1 of the section 82 notices issued to the applicant, T documents 16, 17 and 19
After the Commissioner made phone…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2016] ACAT 25
Decision Date: 5 April 2016

CaseChat Overview and Summary

In the case of Smith v Commissioner for Revenue, the taxpayer challenged the Commissioner's decision to impose interest and penalty tax. The case was heard in the Administrative Appeals Tribunal. The taxpayer argued that they had engaged professionals to manage their tax affairs and had not been required to notify the Commissioner, as an investigation had already been initiated. The taxpayer contended that this engagement meant they did not have to voluntarily disclose their tax affairs and were therefore not liable for the imposed penalties.

The primary legal issue before the Tribunal was whether the taxpayer's engagement of professionals relieved them of the obligation to notify the Commissioner of their tax affairs. The Tribunal also considered whether the taxpayer exercised reasonable care, had a reasonable excuse for any non-compliance, and whether there was a basis for remitting the penalties. The decision hinged on the interpretation of statutory provisions and the application of case law concerning taxpayer obligations and the imposition of penalties.

The Tribunal determined that the taxpayer's engagement of professionals did not absolve them of the obligation to notify the Commissioner. It was held that an investigation being initiated by the Commissioner did not relieve the taxpayer of this obligation. The Tribunal further found that the taxpayer had not exercised reasonable care, did not have a reasonable excuse for non-compliance, and there was no basis for remission of the penalties. Consequently, the Tribunal upheld the Commissioner's decision to impose interest and penalty tax, confirming the reviewable decision of 13 May 2015.

The Tribunal's decision confirms the Commissioner's imposition of interest and penalty tax. The Tribunal found that the taxpayer's engagement of professionals did not relieve them of their obligations, and the initiation of an investigation by the Commissioner did not exempt the taxpayer from notifying their tax affairs. The Tribunal also found that the taxpayer did not exercise reasonable care, had no reasonable excuse, and there was no basis for remission of the penalties. The Tribunal's orders confirm the reviewable decision of 13 May 2015.

Orders

Orders of the court

The Tribunal Orders that:

1. The reviewable decision of 13 May 2015 is confirmed.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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