TMWW and Commissioner of Taxation (Taxation)

[2024] AATA 3552

TMWW and Commissioner of Taxation (Taxation) [2024] AATA 3552 (8 October 2024)

Division:TAXATION AND COMMERCIAL DIVISION

File Numbers:2022/10549, 2022/10550         

Re:TMWW  

APPLICANT

AndCommissioner of Taxation

RESPONDENT

DECISION

Tribunal:Senior Member R Olding

Date:8 October 2024

Place:Brisbane

The applicant’s request dated 6 September 2024 for the issue of summonses to give evidence and produce documents is refused.

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

Senior Member R Olding

Catchwords

PRACTICE AND PROCEDURE – TAXATION REVIEW – SUMMONS – where the applicant claimed deductions for interest related to the acquisition of units in unit trusts – where the applicant requested the issue of a summons to give evidence and produce documents relating to Product Rulings issued by the Commissioner of Taxation – where applicant maintained Commissioner had a duty to treat taxpayers in the same circumstances the same – evidence not relevant to Tribunal’s task – summons refused

Legislation

Income Tax Assessment Act 1997 (Cth), s 8-1
Taxation Administration Act 1953 (Cth), Schedule 1, Division 358.

REASONS FOR DECISION

Senior Member R Olding

8 October 2024

1. The applicant has applied for review of a decision of the Commissioner of Taxation disallowing an objection against an assessment in which the Commissioner had disallowed deductions under s 8-1 of the Income Tax Assessment Act 1997 (Cth) for interest relating to the acquisition of units in three unit trusts.

2. In pursuit of his application for review, the applicant seeks to summons Mr Ed Chan to give evidence and produce documents relating to Product Rulings PR 2011/15, PR 2014/15 and PR 2018/6. Those product rulings were issued by the Commissioner in response to applications made by the firm, Chan & Naylor.

3. The applicant says the principles in the product rulings are directly applicable to his circumstances. The following paragraphs in his submissions, in support of his application for issue of the summons, summarise the basis on which the applicant submits that Mr Chan’s evidence would be relevant to the application for review:

   13. The CoT issued Product Rulings PR2011/15, PR2014/15 and PR2018/6 in relation to certain schemes involving hybrid trusts (Property Investor Trusts) in response to applications made by the firm of Chan & Naylor. Those product rulings deal with the deduction for income tax of interest in relation to investment in a Property Investor Trust and apply to unitholders (called Registered Holders).

   14. The Applicant accepts that he is not a Registered Holder of a Property Investor Trust, however the Rulings are public rulings, and the principles of the Product Ruling should apply to all taxpayers in the same circumstances. The administration of the tax law is required to be fair and apply to all taxpayers evenly. The principles of the Product Rulings should apply to the Applicant even though he is not a Registered Holder, in the event that the Trusts are substantially similar to the Trusts in the current matter.

   15. The Applicant submits that the Trusts in the current matter are the same or substantially similar to the trusts referred to in Product Rulings PR2011/15, PR2014/15 and PR2018/6. Consequently, the CoT is bound to treat taxpayers in the same circumstances the same.

4. Thus, the applicant appears to accept that he is not covered by Product Rulings. His submission appears to be that, rather, the principles of the Product Rulings should be applied on the basis that the Commissioner is ‘bound to treat taxpayers in the same circumstances the same’.

5. Whatever may be the obligations of the Commissioner as the administrator of the taxation system, the duty of the Tribunal is to make the correct decision on the evidence and according to law; specifically, whether the applicant has discharged the burden of proving the relevant assessment is excessive and what amount should be assessed. That task involves making findings of fact based on the evidence before the Tribunal and applying the law to those facts as found. In the context of this matter, those findings are likely to relate to the advantage sought by incurring the relevant interest. No evidence from Mr Chan is capable of being relevant to any such factual finding that might be made by the Tribunal in this matter.

6. As noted, it appears that the applicant accepts that he is not covered by the Product Rulings. However, he submits the same principles adopted in the rulings should be applied. In those circumstances, it is difficult to see how the applicant could be entitled to formal protection under Division 358 in Schedule 1 of the Taxation Administration Act 1953 (Cth) because of reliance on the rulings. In any case, whether he is entitled would be determined by reference to the terms of the rulings and the applicant’s circumstances. Again, evidence by Mr Chan as to matters not appearing in the rulings would not be relevant to the Tribunal’s task.

7. For completeness, I note that this is not a case where reference to the rulings might be said to be relevant to assessment of administrative penalties. The Commissioner remitted all administrative penalties.

8. As the evidence that might be provided by Mr Chan would not be relevant to the Tribunal’s task, there is no basis on which the Tribunal could issue the summons. It may also be the case, as the Commissioner submits, that the application would be contrary to the principle that a summons will not issue where it amounts to no more than a ‘fishing expedition’. Additionally, the terms of the proposed summons – which include requirements for Mr Chan to bring documents into existence such as a ‘summary of the detailed workings of the Property Investor Trust’ – would likely be inappropriate on the basis that they would be oppressive. It is not necessary to address these matters in detail as the evidence proposed to be the subject of the summons not being relevant to the Tribunal’s task on review of the objection decision is fatal to the applicant’s request.

I certify that the preceding 8 (eight) paragraphs are a true copy of the reasons for the decision herein of Senior Member R Olding

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

Associate

Dated: 8 October 2024

Date of hearing:	Decided on the papers
Date final submissions received:	1 October 2024
Advocate for the Applicant:	Self-represented
Counsel for the Respondent:	B McEniery
Solicitors for the Respondent:	ATO Litigation & Legal Services