Bosanac v Commissioner of Taxation

• Jurisdiction: Australia Federal only
• Court: Federal Court (Australia)
• Judgment Date: 15 July 2019
• Neutral Citation: [2019] FCAFC 116
• Date: 15 July 2019

FEDERAL COURT OF AUSTRALIA

Bosanac v Commissioner of Taxation [2019] FCAFC 116

Appeal from:	Bosanac v Commissioner of Taxation [2018] FCA 946
File number:	WAD 317 of 2018
Judges:	GREENWOOD, BURLEY AND COLVIN JJ
Date of judgment:	15 July 2019
Catchwords:	INCOME TAX - appeal by taxpayer from decision of primary judge dismissing appeal from objection decision disallowing objections to notices of amended assessment - where taxpayer lodged no returns for a number of years - where returns when lodged showed nil or negligible income - consideration of the nature of an appeal under s 14ZZ Tax Administration Act 1953 (Cth) - where onus on taxpayer to prove that the assessment the subject of the objection decision was excessive - whether concession by Commissioner was sufficient basis upon which the Court could reach conclusion about taxpayer's income - where taxpayer did not demonstrate the nature and extent of his income - where taxpayer failed to discharge the onus - whether primary judge erred in characterising taxpayer's wealth as considerable - leave to raise a ground alleging statutory double jeopardy not before the primary judge refused - whether primary judge erred in assessment of penalty as to taxpayer's level of culpability - consideration of s 284-220 of Sch 1 of the Tax Administration Act - whether a penalty and a 20% uplift could be imposed on taxpayer at the same time - appeal dismissed
Legislation:	Evidence Act 1995 (Cth) s 50 Income Tax Assessment Act 1936 (Cth) ss 166, 167, 170, 175, 175A, 190 Judiciary Act 1903 (Cth) s 39B Tax Administration Act 1953 (Cth) ss 8ZE, 14ZL, 14ZQ, 14ZU, 14ZV, 14ZVC, 14ZY, 14ZZ, 14ZZO, 14ZZP, 14ZZQ, Schedule 1 s 284-220(1)(c) Tax Laws Amendment (2010 Measures No 1) Act 2010 (Cth)
Cases cited:	Allesch v Maunz [2000] HCA 40; (2000) 203 CLR 172 Aurora Developments Pty Ltd v Federal Commissioner of Taxation (No 2) [2011] FCA 1090; (2011) 196 FCR 457 Australian Competition & Consumer Commission v Australian Competition Tribunal [2006] FCAFC 83; (2006) 152 FCR 33 Avon Downes Pty Ltd v Federal Commissioner of Taxation (1949) 78 CLR 353 Builders Licensing Board v Sperway Constructions (Syd) Pty Ltd [1976] HCA 62; (1976) 135 CLR 616 Commissioner of Taxation v Futuris Corporation Ltd [2008] HCA 32; (2008) 237 CLR 146 Commissioner of Taxation v Rigoli [2013] FCA 784 Commissioner of Taxation v Sharpcan Pty Ltd [2018] FCAFC 163 Day v Perisher Blue Pty Ltd [2005] NSWCA 110; (2005) 62 NSWLR 731 Deputy Commissioner of Taxation v Richard Walter Pty Ltd [1995] HCA 23; (1995) 183 CLR 168 Dwyer v Calco Timbers Pty Ltd [2008] HCA 13; (2008) 234 CLR 124 Elliott v The Queen [2007] HCA 51; (2007) 234 CLR 38 Federal Commissioner of Taxation v Australia & New Zealand Savings Bank Ltd [1994] HCA 58; (1994) 181 CLR 466 Federal Commissioner of Taxation v Hines (1952) 9 ATD 413 Federal Commissioner of Taxation v Mantle Traders Pty Ltd [1980] FCA 156; (1980) 49 FLR 256 Federal Commissioner of Taxation v Montgomery [1999] HCA 34; (1999) 198 CLR 639 Fleming v The Queen [1998] HCA 68; (1998) 197 CLR 250 Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 Gashi v Commissioner of Taxation [2012] FCA 638 Kajewski v Commissioner of Taxation [2003] FCA 258 Kolotex Hosiery (Australia) Pty Ltd v Federal Commissioner of Taxation [1975] HCA 5; (1975) 132 CLR 535 Krew v Federal Commissioner of Taxation (1971) 71 ATC 4213; (1971) 2 ATR 230 Lacey v Attorney-General (Qld) [2011] HCA 10; (2011) 242 CLR 573 Ma v Federal Commissioner of Taxation (1992) 37 FCR 225 McCormack v Federal Commissioner of Taxation [1979] HCA 18; (1979) 143 CLR 284 Paridis v Settlement Agents Supervisory Board [2007] WASCA 97; (2007) 33 WAR 361 Phillips v Commonwealth [1964] HCA 22; (1964) 110 CLR 347 R v Hoar [1981] HCA 67; (1981) 148 CLR 32 Re Coldham; Ex parte Brideson (No 2) [1990] HCA 36; (1990) 170 CLR 267 Re Picton Finance Ltd and Federal Commissioner of Taxation [2013] AATA 116 Rigoli v Commissioner of Taxation [2014] FCAFC 29 Roy Morgan Research Centre Pty Ltd v Commissioner of State Revenue (Vic) [2001] HCA 49; (2001) 207 CLR 72 Trautwein v Federal Commissioner of Taxation (1936) 56 CLR 63 Turnbull v New South Wales Medical Board [1976] 2 NSWLR 281 W R Carpenter Holdings Pty Ltd v Commissioner of Taxation [2006] FCA 1252 Western Gold Mines No Liability v Commissioner of Taxation (WA) (1938) 59 CLR 729 Weyers v Commissioner of Taxation [2006] FCA 818 Zappia v Commissioner of Taxation [2017] FCAFC 185
Date of hearing:	7 November 2018
Registry:	Western Australia
Division:	General Division
National Practice Area:	Taxation
Category:	Catchwords
Number of paragraphs:	151
Counsel for the Appellant:	Mr M Robertson QC with Mr JW Fickling
Counsel for the Respondent:	Mr AJ Musikanth with Ms TL Jonker

ORDERS

		WAD 317 of 2018
BETWEEN:	VLADO BOSANAC Appellant
AND:	COMMISSIONER OF TAXATION Respondent

JUDGES:	GREENWOOD, BURLEY AND COLVIN JJ
DATE OF ORDER:	15 July 2019

THE COURT ORDERS THAT:

1. The appeal be dismissed.

2. The respondent do file and serve submissions as to costs within 14 days.

3. The appellant do file and serve submissions as to costs within 14 days of service of the respondent's submissions as to costs.

4. The respondent do file and serve any submissions strictly in reply within 10 days of service of the appellant's submissions as to costs.

5. Unless the Court otherwise orders, the orders as to the costs of the appeal be determined on the papers.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

THE COURT:

1. Mr Bosanac lodged no tax returns for income earned in the tax years from 2006 to 2013 until 25 February 2015. When finally he lodged those returns, they disclosed little or no income in the years 2006 to 2009 and 2013 and about $800,000 of taxable income in total for the whole period. The unchallenged findings of the primary judge are that Mr Bosanac is very wealthy, that he 'displayed a cavalier attitude to his obligations as a taxpayer … whilst successfully pursuing his career as a businessman', that the returns he eventually filed were demonstrably wrong and that he swore misleading affidavits about his income in the proceedings before the primary judge.

Assessments, objection and appeal

2. The Commissioner commenced an audit of the tax affairs of Mr Bosanac in March 2014. Well after the audit started, he lodged tax returns. Tax payable by Mr Bosanac was initially assessed on the basis of the tax returns lodged by him. Based on the audit, the Commissioner assessed Mr Bosanac for an increased amount of taxable income over the period of about $9 million and for penalties and interest. On 16 June 2015, amended assessments to reflect that position were issued under the Income Tax Assessment Act 1936 (Cth) (ITAA) (Amended Assessments).

3. Mr Bosanac lodged objections to the Amended Assessments in August 2015. The outcome of the objections was a decision by the Commissioner in June 2016 to the effect that there should be various adjustments to the tax returns as originally lodged (Objection Decision). The Objection Decision revised the taxable income upwards in some years and downwards in others. The net effect over the period was a further increase...