Wang v Commissioner of Taxation

In Wang v Commissioner of Taxation, the applicant, Mr Wang, contested a default assessment issued by the Commissioner of Taxation under section 167 of the Income Tax Assessment Act 1936 (Cth). The dispute centred on whether Mr Wang could satisfy the burden of proof by establishing errors in the default assessment and if the Administrative Appeals Tribunal (AAT) erred in its approach. The AAT had affirmed the Commissioner’s decision not to allow Mr Wang’s objection, and Mr Wang appealed to the Federal Court.

The key legal issues were whether Mr Wang could discharge the burden of proof under section 14ZZK(b)(I) of the Taxation Administration Act 1953 (Cth) by identifying errors in the default assessment, if the AAT erred in its application of the “all or nothing” approach, and whether the AAT breached the principles in Browne v Dunn by not accepting Mr Wang's evidence. Additionally, the court considered if the AAT failed to give adequate reasons as required by section 43(2B) of the Administrative Appeals Tribunal Act 1975 (Cth) and whether it erred in not giving due weight to corroborative evidence.

The Federal Court found that Mr Wang's burden of proof required him to show that the default assessment was excessive or incorrect and what the assessment should have been. The court clarified that a default assessment under section 167 of the ITAA 1936 necessarily involves a judgment as to the taxpayer’s income, and the applicant cannot discharge the onus by merely demonstrating that particular items were incorrect. The AAT did not err in applying the “all or nothing” approach since Mr Wang did not discharge his onus of proof. The court also found no breach of the principles in Browne v Dunn because Mr Wang had adequate notice of the Commissioner’s position and the issues in dispute. Furthermore, the AAT did not err in its reasoning or in failing to give adequate reasons, as the alleged errors were based on a misapprehension of the burden of proof.

The application was dismissed, and the applicant was ordered to pay the Commissioner's costs, which were deemed fair and reasonable.