Commissioner of Taxation v Ross

• Jurisdiction: Australia Federal only
• Judgment Date: 09 July 2021
• Neutral Citation: [2021] FCA 766
• Court: Federal Court
• Date: 09 July 2021

Federal Court of Australia

Commissioner of Taxation v Ross [2021] FCA 766

Appeal from:	Re MJPV and SZGK and Commissioner of Taxation [2020] AATA 1527
File number:	QUD 165 of 2020
Judgment of:	DERRINGTON J
Date of judgment:	9 July 2021
Catchwords:	TAXATION – onus of proof – appeal from decisions of Administrative Appeals Tribunal setting aside objection decisions relating to assessments – default assessments pursuant to s 167 of Income Tax Assessment Act 1936 (Cth) – whether Tribunal failed to apply correct onus pursuant to s 14ZZK of Taxation Administration Act 1953 (Cth) – whether taxpayers could satisfy onus by establishing errors in asset betterment methodology adopted by Commissioner – whether taxpayers could satisfy onus by establishing amounts included in asset betterment statement were not assessable income – whether taxpayers could satisfy onus by otherwise conceding unexplained amounts represented assessable income – whether Commissioner had agreed to confine issues in dispute before Tribunal – effect of concessions by Commissioner to Tribunal that amounts included in asset betterment statements were not unexplained wealth or were overstated – whether properly instructed Tribunal could have been satisfied that taxpayers had established true taxable income on evidence adduced below – where taxpayers adduced document as aide-memoire purporting to summarise evidence – whether document could explain unexplained wealth – whether document could establish taxpayers’ true taxable income – appeal allowed ; TAXATION – standard of proof – where Tribunal remitted objection decisions to Commissioner for reconsideration with direction to take account of “possibility” of double counting in asset betterment statements – whether Tribunal failed to apply correct standard of proof – appeal allowed ; TAXATION – grounds of objection – whether Tribunal considered matters not raised in taxpayer’s grounds of objection – whether Tribunal impliedly granted leave to amend grounds – whether Commissioner joined issue on new matters in submissions – appeal allowed in part ; TAXATION – administrative penalties – where taxpayer assessed for penalties for multiple income years – whether Tribunal erred in purporting to exercise discretion to set aside penalty uplift imposed by s 284-220(1)(c) of Sch 1 to Taxation Administration Act 1953 (Cth) – whether imposition of uplift depended on base penalty amount being worked out under relevant items in s 284-90(1) before conduct giving rise to further penalty – appeal allowed ; TAXATION – remission of penalties – scope of considerations relevant to discretion to remit – whether scope of relevant considerations temporally limited – whether Tribunal erred in taking into account death of taxpayer after hearing concluded in remitting penalties imposed on him and his spouse – appeal allowed ; ADMINISTRATIVE LAW – procedural fairness – whether Tribunal denied Commissioner procedural fairness by considering matter arising after hearing concluded – whether Tribunal failed to provide opportunity to make submissions on new matter – appeal allowed ; ADMINISTRATIVE LAW – whether Tribunal denied taxpayers procedural fairness – where significant delay between hearing of evidence and delivery of decisions and reasons – whether delay gives rise to real and substantial risk that Tribunal’s capacity to assess matters was impaired – where Tribunal’s decisions failed to reflect its reasons in several respects – where Tribunal improperly used document tendered as aide-memoire as evidence – where reasons failed to specifically address matters raised before Tribunal – cross-appeal allowed ; ADMINISTRATIVE LAW – appropriate order on setting aside decisions of Tribunal – where no properly instructed Tribunal could be satisfied as to requisite onus by evidence adduced by taxpayers – whether s 44 of Administrative Appeals Tribunal Act 1975 (Cth) permits order substituting only decision available on evidence before Tribunal – where only decision available on evidence was different to decision made by Tribunal – order remitting matters to Tribunal for re-hearing ; ADMINISTRATIVE LAW – appropriate order on remission of matters to Tribunal for re-hearing – whether matters should be re-heard on same or further evidence – where taxpayers did not indicate nature or extent of further evidence to be adduced before Tribunal – where any further evidence could have been obtained for earlier hearing of evidence – significance of delay since earlier hearing – where taxpayers contended on appeal that evidence adduced below was adequate to satisfy onus – order that matters be re-heard without hearing further evidence
Legislation:	Administrative Appeals Tribunal Act 1975 (Cth) ss 43, 44 Income Tax Assessment Act 1936 (Cth) s 167 Tax Administration Act 1953 (Cth) s 14ZZK, Sch 1, ss 284-220, 298-20, 340-5 Tax and Superannuation Laws Amendment (2013 Measures No. 1) Act 2013 (Cth) Sch 5, s 27)
Cases cited:	Arnott v Repatriation Commission (2001) 106 FCR 83 Australian Trade Commission v Richard Shrapnel Consulting Services Pty Ltd (1988) 85 ALR 287 Baig v Minister for Immigration and Multicultural Affairs [2002] FCA 380 Banque Commerciale SA v Akhil Holdings Ltd (1990) 169 CLR 279 Bosanac v Commissioner of Taxation (2019) 267 FCR 169 Bosanac v Commissioner of Taxation (2019) 93 ALJR 1327 Cajkusic v Commissioner of Taxation (2006) 155 FCR 430 Carter v Commissioner of Taxation [2020] FCAFC 150 Comcare v Etheridge (2006) 149 FCR 522 Comcare v Wuth (2018) 260 FCR 89 Commissioner of Taxation v Burness [2009] FCA 1021; (2009) 77 ATR 61 Dixon v Federal Commissioner of Taxation (2008) 167 FCR 287 Dunn v Secretary, Department of Social Security (1990) 21 ALD 248 Expectation Pty Ltd v PRD Realty Pty Ltd (2004) 140 FCR 17 Federal Commissioner of Taxation v Dalco (1990) 168 CLR 614 Fletcher v Commissioner of Taxation (1988) 19 FCR 442 Fox v Percy (2003) 214 CLR 118 Frugtniet v Australian Securities and Investments Commission (2019) 266 CLR 250 Gashi v Commissioner of Taxation (2013) 209 FCR 301 George v Federal Commissioner of Taxation (1952) 86 CLR 183 Haritos v Federal Commissioner of Taxation (2015) 233 FCR 315 Harradine v Secretary, Department of Social Security (1989) 25 FCR 35 Holdway v Arcuri Lawyers [2009] 2 Qd R 18 Jolley v Federal Commissioner of Taxation (1989) 86 ALR 297 Kostas v HIA Insurance Services Pty Ltd (2010) 241 CLR 390 Krew v Commissioner of Taxation (1971) 45 ALJR 324 Le v Commissioner of Taxation [2021] FCA 303 Ma v Federal Commissioner of Taxation (1992) 37 FCR 225 Mathoura Property Pty Ltd v Federal Commissioner...