............................[SGND]............................................

TAXATION - administrative penalties - false or misleading statement - whether applicant liable for administrative penalties on basis of recklessness - whether penalty should be wholly or partly remitted - decision affirmed

Taxation Administration Act 1953 (Cth), ss 14ZZK, Sch 1 284-20, 284-75, 284-8-, 284-90, 298-10, 298-20, 298-30

Bosanac v Commissioner of Taxation [2019] FCAFC 116; (2019) 267 FCR 169

BRK (Bris) Pty Ltd v. Federal Commissioner of Taxation [2001] FCA 164; 2001 ATC 4111; [2001] FCA 164; (2001) 46 ATR 347

Federal Commissioner of Taxation v Dalco [1990] HCA 3; (1990) 168 CLR 614

Federal Commissioner of Taxation v Ross [2021] FCA 766

Gauci v Federal Commissioner of Taxation [1975] HCA 54; (1975) 135 CLR 81

Imperial Bottleshops Pty Ltd & Egerton v Federal Commissioner of Taxation [1991] FCA 276; (1991) 22 ATR 148

Pascoe v Federal Commissioner of Taxation (1956) 30 ALJR 402

Sanctuary Lakes Pty Ltd v Commissioner of Taxation [2013] FCAFC 50; (2013) 212 FCR 483

Trautwein v Federal Commissioner of Taxation [1936] HCA 77; (1936) 56 CLR 63

Practice Statement Law Administration 2012/5 'Administration of the false or misleading statement penalty - where there is a shortfall amount'

1. Mrs Angela Tilli (Mrs Tilli or Applicant) seeks a review of the Commissioner of Taxation's (Commissioner or Respondent) decision dated 13 June 2023 to disallow the objection to Notices of Assessment for a shortfall penalty for the 2015, 2016 and 2017 income years (Penalty Assessments).
2. Although Mrs Tilli concedes that she is liable to pay an administrative penalty, in her view the behaviour resulting in the shortfall arose from a failure to take reasonable care and should therefore have been imposed at the base penalty rate of 25%, or alternatively, the Tribunal should exercise a discretion to remit the administrative penalties to that amount.

(a) The Tribunal documents;[1] > > (b) The Supplementary Tribunal documents;[2] > > (c) The Applicant's Statement of Facts, Issues and Contentions filed on 1 March 2024; > > (d) The Applicant's Response to the Respondent's Statement of Facts, Issues and Contentions filed on 5 June 2024; > > (e) The Applicant's Submissions and Evidence filed on 20 May 2025;[3] > > (f) The Respondents Statement of Facts, Issues and Contentions filed on 24 April 2024; > > (g) The Respondent's submissions filed on 3 April 2025; and > > (h) The oral submissions made by each party at the hearing.

2. Mrs Tilli did not file a witness statement, affidavit or other similar document in support of her application for review. She was also not present at the final hearing.
3. The Applicant's Submissions and Evidence filed on 20 May 2025, included a document purporting to be 'expert evidence' of an accountant, Mr Matt Fogarty, a partner at an accounting firm in Western Australia.
4. The document had a number of troubling anomalies. For example, it did not follow a traditional affidavit or statutory declaration format, was not drafted in the first person, was unsigned, did not set out the questions posed to the expert, the facts and assumptions appeared to be copied from the Applicant's Statement of Facts Issues and Contentions (ASFIC) and there was no clear opinion expressed. Mr Fogarty was not called to give evidence.
5. Mr Mestichelli confirmed the 'expert evidence' was only relied upon to the extent it spoke to the penalties issue. In circumstances where the document simply repeats the ASFIC in respect of the penalty issue and given the various anomalies with the document, I have placed no weight on its contents.

1. The facts are taken primarily from the Respondent's Statement of Facts, Issues and Contentions, but also some of the key documents contained in the Tribunal documents.
2. During the relevant income years, Mrs Tilli resided with the husband, Mr Joseph Tilli (Mr Tilli) and her daughter in the family home. She was not engaged in external employment but was responsible for running the household and related domestic duties.
3. In December 2004, the Sciacca Family Trust (SFT) was established. Mrs Tilli is a trustee of the SFT together with her brother and sister. SFT acquired a property located at Great Northern Highway (Northern Highway Property) in January 2004 and another at Rockingham (Rockingham Property) in June 2005 from Mrs Tilli's parents.
4. The existing residence on the Rockingham Property was demolished in 2006 and three units constructed. Unit 1 was retained by SFT and is used as holiday home. Unit 3 was sold in July 2007 and Unit 2 has been continually rented out.

1. In August 2018, the Commissioner commenced an audit of the Applicant's tax affairs. A Confirmation of Audit letter together with a Cost of Living questionnaire (Questionnaire) was sent to Mrs Tilli on 2 October 2018.
2. On 17 August 2018, Mrs Tilli signed the completed Questionnaire, which stated that the annual living expenses of her and her dependants amounted to $49,500, she received loans/ drawing from SFT, but otherwise did not receive income from gifts, loans or savings. She did not t list any other assets.
3. On 3 September 2018, the Applicant lodged tax returns for the 2015, 2016 and 2017 income years (Relevant Years). The returns were prepared and lodged by Mr Domenic Bianchi, who also provided services to Mr Tilli and his associated entities. In each of the Relevant Years, Mrs Tilli declared income of $20,500 from SFT in trust distributions.
4. On 25 September 2018, the Commissioner issued a Notice of Assessment for the 2017 income year. On 26 September 2028, the Commissioner issued a Notice of Assessment for the 2015 income year. On 15 November 2018, the Commissioner issued a Notice of Assessment for the 2016 income year.
5. On 26 November 2018, Mrs Tilli, together with her legal practitioner (Mr Mestichelli) attended an interview (Compulsory Interview) with the Respondent conducted under s 353(10) of Schedule 1 of the Taxation Administration Act 1953 (Cth) (TAA53).
6. The transcript of the Compulsory Interview records that:
   • Mr Tilli provided her around $600 in cash per week in 2015, but this amount had reduced to little or none by August 2018. From these cash payments, Mrs Tilli paid the household shopping expenses;
   • Mr Tilli paid for the remaining bills and utilities and the Applicant was unaware of the source of those funds;
   • Mrs Tilli was not aware of the substantial deposits being made into her personal bank accounts including the source or purpose of the funds. She did not monitor the balance of her accounts and did not use online banking;
   • She was unable to explain the repayment of a mortgage in her name;
   • She was unable to explain a proof of debt in the amount of $71,000 lodged in her name in the liquidation of Primestyle liquidation;
   • She was not sure which trust the trust distribution disclosed in her income tax return was from. She did not recall receiving any funds;
   • The income tax returns were prepared by Mr Bianchi. She recalled that 'I just sign things. I don't really look at a lot of things. I just sign.';
   • The Questionnaire was prepared by Mr Bianchi who was provided the figures by her husband. All she did was sign it;
   • She signed documents willingly and Mr Tilli would not force her to sign any documents.
7. Between April 2020 and January 2021, the audit was placed on hold as a result of COVID-19. On 8 February 2021, the Commissioner issued its position paper. A response was provided by the Applicant on 5 March 2021.
8. On 9 June 2021 the Commissioner finalised the audit and provided the Applicant with its reasons for decision. In the Relevant Years, the Commissioner determined:

(i) Mrs Tilli had omitted income totalling $180,184.50 comprised of: > > > (i) Rental income from properties owned by SFT totalling $28,383.34; > > > > (ii) Unexplained deposits and payments into the Applicant's bank accounts totalling $122,868,23; and > > > > (iii) Cash deemed have been received by Ms Tilli from Mr Tilli totalling $28,933.00; and > > (j) Mrs Tilli was liable for a shortfall penalty arising from making a false or misleading statement, calculated at a base penalty rate of 50% on the basis the Applicant behaved recklessly. The penalty was also subject to an uplift of 20% for the 2016 and 2017 income years due to the penalty being repeated in those years.

9. On 23 June 2021, the Commissioner issued Notices of Amended Assessments and Penalty Assessments for the Relevant Years reflecting the audit decision.

1. In August 2021, the Applicant lodged an objection against the Notices of Assessment and Penalty Assessments for the Relevant Years. In the objection form Mrs Tilli stated her taxable income should be the income declared in the original income tax returns plus some further income identified as part of an audit on SFT. She also stated that the Penalty Assessments were excessive as the returns were completed in a manner consistent with what she considered to be the correct application of the tax laws, and she co-operated fully in the audit process.
2. Between November 2022 and March 2023, the Applicant provided further documents to the Commissioner in support of the objection.
3. On 13 June 2023, the Commissioner issued the objection decision which:
   • disallowed the objection to the Notices of Amended Assessment for the 2015 and 2016 income years;
   • allowed in part the objection to the Notice of Amended Assessment for the 2017 income year. Specifically, the Commissioner found an amount of $444 was rental income already taken into account in the Commissioner's calculations; and
   • disallowed the objection to the Penalty Assessments for Relevant Periods.

1. On 2 August 2023, the Applicant filed an application in the Tribunal seeking review of the Respondent's decision to disallow the objection in respect of the Notices of Amended Assessment for the 2015 and 2016 income years and the Penalty Assessments for the Relevant Years, disallow in part the objection in respect of the Notices of Amended Assessment for the 2017 income year and not remit the shortfall interest charges (SIC) imposed under s 280-100 of Schedule 1 of the TAA 53 and included in the assessments for the Relevant Years.
2. The proceeding was initially scheduled for hearing on 10 and 11 April 2025. In late March 2025, the Applicant made an application to vacate the hearing, which was opposed by the Respondent. After hearing submissions from both parties, I was satisfied it was appropriate to vacate the hearing and to allow the Applicant an opportunity to file any expert evidence on or before 30 May 2025. The hearing was relisted to commence on 10 July 2025.
3. This date was also vacated at the request of the parties. The hearing was scheduled and proceeded on 17 October 2025. The Applicant was not present at the hearing. Mr Mestichelli confirmed that he was authorised to conduct the hearing in her absence and that he was aware she may not join the MS Teams hearing as she was outside the jurisdiction.
4. At the commencement of the hearing, Mr Mestichelli also advised the Tribunal that the application for review in respect of the Notices of Amended Assessment for the Relevant Years and remission of the SIC was no longer pursued by Mrs Tilli and the Respondent's objection decision in respect of these issues should be affirmed.
5. Mr Mestichelli confirmed the only issue that remained for determination by the Tribunal was whether the base rate of the penalty imposed resulted from a failure to take reasonable care, and should therefore have been imposed at 25%,or in the alternative, whether the Tribunal should exercise a discretion to remit the penalty to that amount.

1. The law concerning administrative penalties is contained in Division 284 of Schedule 1 of the TAA 53. Section 284-75 provides as follows:

284-75 Liability to penalty > > (1)You are liable to an administrative penalty if: > > (a)you make a statement to the Commissioner or to an entity that is exercising powers or performing functions under a *taxation law (other than the *Excise Acts); and > > (b)the statement is false or misleading in a material particular, whether because of things in it or omitted from it. > > Note: This section applies to a statement made by your agent as if it had been made by you: see section 284-25. > > ... > > Exceptions to subsections (1) and (4) > > (5)You are not liable to an administrative penalty under subsection (1) or (4) for a statement that is false or misleading in a material particular if you, and your *agent (if relevant), took reasonable care in connection with the making of the statement. > > (6)You are not liable to an administrative penalty under subsection (1) or (4) if: > > (a)you engage a *registered tax agent or BAS agent; and > > (b)you give the registered tax agent or BAS agent all relevant taxation information; and (c) the registered tax agent or BAS agent makes the statement; and > > (d)the false or misleading nature of the statement did not result from: > > (i)intentional disregard by the registered tax agent or BAS agent of a *taxation law (other than the *Excise Acts); or > > (ii)recklessness by the agent as to the operation of a taxation law (other than the Excise Acts). > > (7)If you wish to rely on subsection (6), you bear an evidential burden in relation to paragraph (6)(b). > > ...

2. A taxpayer will have shortfall amount where the tax calculated on the statement made to the Commissioner is less than the tax calculated on the basis that the statement was not false or misleading.[4]
3. The shortfall amount is calculated using the following table in s 284-90

You have a *shortfall amount as a result of a statement described in subsection 284-75(1) or (4) and the amount, or part of the amount, resulted from Intentional disregard of a *taxation law (other than the *Excise Acts) by you or your agent

You have a *shortfall amount as a result of a statement described in subsection 284-75(1) or (4) and the amount, or part of the amount, resulted from reckless ness by you or your agent as to the operation of a *taxation law (other than the *Excise Acts)

You have a *shortfall amount as a result of a statement described in subsection 284-75(1) or (4) and the amount, or part of the amount, resulted from a failure by you or your agent to take reasonable care to comply with a *taxation law (other than the *Excise Acts)

1. The base penalty amount (BPA) is increased by 20% where the same penalty is imposed again in a subsequent year.[5]
2. The Commissioner must give written notice to the taxpayer of the liability to pay the penalty and of the reasons why the taxpayer is liable to pay the penalty unless the Commissioner decides to remit all of the penalty[6] Otherwise, the Commissioner must make an assessment of an amount of an administrative penalty under Division 284 of the TAA 53.[7]
3. Where an administrative penalty has been imposed, the Respondent may remit all or part of it[8] Although the discretion is framed broadly, the power to remit must be exercised for a proper purpose, in accordance with the objects of the TAA 53.[9]
4. A taxpayer that is dissatisfied with such an assessment may object against it in the manner set out in Pt IVC of the TAA 53.

1. On an application for review of a reviewable objection decision, the Applicant has the burden of proving, if the taxation decision concerned is an assessment, that the assessment is excessive or otherwise incorrect and what the assessment should have been. This includes Penalty Assessments.
2. The onus rests solely with the Applicant to establish the claim they assert[10]. There is no onus upon the Commissioner, and it is not necessary for him to show the Penalty Assessment was correctly made[11]. Further, he is entitled to rely on any deficiency in proof of the excessiveness to uphold the assessment.[12] The standard of proof that applies is on the balance of probabilities.
3. The manner by which an Applicant may seek to discharge the owners of proof can vary and depend on the circumstances of a particular case. Self -serving statements must be received with caution.[13] This does not necessarily mean that a self -serving statement should not be believed or accepted, but some other corroborative evidence would normally be required.[14]

1. The issue for determination is whether the Applicant has demonstrated that the Penalty Assessments are excessive or otherwise incorrect on the basis that:

(a) the penalty imposed is excessive or incorrect - this requires the Tribunal to determine whether the shortfall amount as a result of the false or misleading statement resulted from recklessness or a lack of reasonable care by the Applicant or her agent; and/or > > (b) the penalty imposed is excessive on the basis that it should've been remitted in part or in full.

1. Mr Mestichelli argued the Penalty Assessments are excessive on the basis that the conduct of Mrs Tilli did not amount to recklessness in circumstances where:
   • The Applicant is unsophisticated in respect of financial matters and was a passenger in respect of her taxation affairs, which were relatively complex. Further, she did not appreciate the consequence that would fall upon her for the error in the assessments;
   • She was reliant on her husband and Mr Bianchi in the preparation of her tax returns. These were significant relationships based on trust and she genuinely believed her taxation affairs were being attended to properly;
   • She complied with all requests for information and fully participated in the audit and objection; and
   • Her conduct is more appropriately assessed as a failure to take reasonable care rather than reckless.
2. The Applicant also contended that in respect of the exercise of discretion, in addition to matters outlined above:
   • Mrs Tilli is not in paid employment, receives limited income from the SFT trust and has limited capacity to pay;
   • Mr Tilli was the subject of debt recovery action by the ATO that culminated in his bankruptcy. Through that process the family home was sold;
   • If the penalty were not remitted in part, there would be an unjust or intended consequence to the Applicant.

1. The Commissioner's position can be summarised as follows:
   • The Applicant's submission that Mrs Tilli was unsophisticated taxpayer and relied upon the advice of her husband or Tax Agent is not supported by any evidence;
   • In the Compulsory Interview, Mrs Tilli admits she never questioned the origin of money in her accounts, did not complete or critically review important documents before signing them and made no attempt to understand her financial affairs. The fact she relied upon Mr Tilli and her tax agent does not relieve her of any responsibility or accountability;
   • There is no suggestion of any duress or coercion; and
   • Mrs Tilli's current circumstances and capacity to pay are irrelevant in respect of remission.

1. Mrs Tilli, in conceding the application for review in respect of the primary tax liabilities, is taken to admit the statements made by her to the Commissioner were false and misleading.
2. Mrs Tilli made a forensic decision not to provide a witness statement or give evidence in the proceeding. As a consequence of this choice, there was no direct evidence from the Applicant which sought to explain the conduct that gave rise to the penalties under review, her current circumstances or any other aspect of her submissions.
3. As the TAA 53 makes plain, in taxation matters, the onus rests squarely on the Applicant to establish that the assessment is excessive or otherwise incorrect. That onus requires the Applicant to positively prove the facts said to support the relief sought. It is not sufficient for an Applicant to merely point to perceived deficiencies in the Respondent's case or to advance submissions unsupported by evidence.
4. In practical terms, it will be incredibly difficult for a taxpayer to discharge that onus in the absence of positive evidence, especially in a matter such as this where an explanation as to the taxpayer's conduct is of significance.
5. I put these concerns to Mr Mestichelli at the hearing. He acknowledged the onus may present some difficulties, but submitted it was also open to the Tribunal to draw inferences from the responses provided by Mrs Tilli in the Compulsory Interview.

Was the Applicant reckless in relation to the operation of the tax law?

1. As can be gleaned from the table in s 284-90 to Schedule 1 of the TAA 53, recklessness suggests conduct that is more blameworthy than a failure to take reasonable care to comply with a taxation law but less culpable than an intentional disregard of a taxation law.
2. The concept of recklessness was explained by the Federal Court as follows[15]:

Recklessness in this context means to include in a tax statement material upon which the Act or regulations are to operate, knowing that there is a real, as opposed to fanciful, risk that the material may be incorrect, or be grossly indifferent as to whether or not the material is true and correct, and that a reasonable person in the position of the statement-maker would see there was a real risk that the Act and regulations may not operate correctly to lead to the assessment of the proper tax payable because of the content of the tax statement. So understood, the proscribed conduct is more than mere negligence and must amount to a gross carelessness.

3. Recklessness is assessed objectively. The question is not whether the taxpayer subjectively believed that her affairs were being properly attended to or whether she trusted others to manage those affairs on her behalf, but whether her conduct displays an indifference to a real risk her tax returns were incorrect, and the risk was obvious to a reasonable person in her position.
4. The Tribunal's factual findings are necessarily constrained by the evidence before it. In this matter, the primary evidence of Mrs Tilli's conduct and engagement in respect of her tax affairs is derived from the Compulsory Interview. The interview occurred in the context of a compliance process and is not a narrative account volunteered by Mrs Tilli in respect of her understanding of events.
5. The Tribunal did not have the benefit of any direct evidence from Mrs Tilli explaining the circumstances in which she relied on others, or any steps she may contend were taken to inform herself of her obligations. The Applicant made a forensic decision not to give evidence or adduce any other material that might provide a broader context to her behaviour. The Commissioner was also denied the opportunity to cross-examine her alleged reliance on her husband or Mr Bianchi.
6. While I draw no adverse inference from that decision, the paucity of evidence before me necessarily limits the factual conclusions that may be drawn in Mrs Till's favour. The onus requires the Applicant to establish facts sufficient to displace the Commissioner's assessment. That onus cannot be discharged by speculation, bare assertion or by inviting the Tribunal to draw favourable inference in absence of positive evidence.
7. During the Relevant Years, the Applicant disclosed only $20,500 in notional trust distributions as her assessable income. At the same time, her self-reported annual living expenses totalled $49,500. That level of expenditure was objectively inconsistent with the limited income disclosed in her returns.
8. The Notices of Amended Assessment were ultimately issued on the basis that she had received significant amounts of undeclared income identified through unexplained deposits, rental income and cash from Mr Tilli. These were substantial receipts directly relevant to her income position.
9. By her own admission, Mrs Tilli did not monitor bank accounts in her own name, made no inquiries as to the source or character of substantial funds deposited into those accounts or considered the tax consequences of these receipts. Further, she did not ask questions or seek to understand the content of her income tax returns before signing them.
10. Mrs Tilli's conduct was not merely passive. She admitted to signing documents of clear legal and financial significance without reading them or attempting to understand their contents or consequences. This behaviour reflects a complete abdication of personal responsibility for her own financial and taxation affairs.
11. While it is common and often understandable for taxpayers to rely on professional advisors, such reliance does not absolve a taxpayer of all accountability. There remains an expectation that a taxpayer will have some minimum level of engagement with their affairs, awareness of significant income and assets in their name, preparedness to ask basic questions and willingness to review, understand and attest to the accuracy of documents before signing them. Mrs Tilli did none of these things.
12. This is not a case of inadvertent carelessness or isolated oversight, but rather wilful disengagement. The Applicant chose not to know, and not to ask, in circumstances where a reasonable person would have recognised the real risk that returns lodged on her behalf may not have been correct.
13. Although the Compulsory Interview indicates Mrs Tilli relied on her husband (and to a lesser extent Mr Bianchi) in relation to the preparation of her tax affairs, there is no evidence from the Applicant explaining the nature and extent of that reliance, the steps she took to ensure compliance, or why her conduct should be regarded as excusable or otherwise justified.
14. Even if I accept the bare assertion that she trusted her husband and Mr Bianchi in the management of her taxation affairs, this does not convert conduct that is objectively reckless into conduct that merely lacks reasonable care. The test does not turn on the Applicant's subjective confidence that others would take care of things but on whether her conduct objectively demonstrated an indifference to obvious risks.
15. In my view, a reasonable person in the Applicant's position would have recognised the disparity between the income disclosed, the expenses incurred and funds actually available to her in the Relevant Period, as giving rise to an obvious risk that the returns were incorrect and would have made enquiries as to the tax treatment of funds used to meet the expenses.
16. The Applicant effectively admitted information was provided to the Commissioner through her husband or Mr Bianchi without any oversight by her personally. The fact the Applicant may have relied on others to complete and lodge her income tax returns does not relieve her of the responsibility to be aware of the content of those returns, including whether they contain a false or misleading statement. Mrs Tilli's failure to take even rudimentary steps to review or question the return supports the conclusion that she was indifferent to whether the returns were correct.
17. In this context, the Applicant's conduct cannot be characterised as a failure to take reasonable care and is properly characterised as reckless.
18. There is Federal Court authority_[16]_, that the uplift contained in s 284-20 of Schedule 1 of the TAA 53 is imposed automatically and is not a matter for the exercise of discretion by the Commissioner. This is the case even where a series of penalty assessments, each involving a base penalty amount worked out using the relevant items in s 284-90 are made contemporaneously. The Tribunal has no power to set aside the imposition of the uplift of the base penalty amount.

Is there a basis to exercise a discretion to remit the penalties?

1. The Commissioner has a discretionary power to remit a penalty, including for a false or misleading statement. Whilst the discretion is framed without limitation, the exercise of that discretion is guided by Practice Statement Law Administration 2012/5 'Administration of the false or misleading statement penalty - where there is a shortfall amount' (PSLA 2012/5).
2. The Commissioner is required, in accordance with PSLA 2012/5, to consider the following principles in deciding whether to remit a penalty[17]:
   • The purpose of the penalty provision, which is to encourage taxpayers to take reasonable to take reasonable care and complying with their tax obligations;
   • Consistent and equitable treatment by reference to specific rates of penalty. The objective would be compromised if the penalties imposed at the rate specified in the law were remitted without just cause, arbitrarily or as a matter, of course; and
   • The amount of the penalty rate in isolation is not valid reason for a mission in the absence of specific reasons why it would be unjust in the taxpayers particular Circumstances.
3. Consistent with the principles in PSLA 2012/ 5 remission in full or in part of a shortfall penalty arising from a false or misleading statement will generally only occur where the result is unjust having regard to all the circumstances.[18]
4. Mrs Tilli submitted that a partial remission of the penalty is appropriate having regard to her lack of financial sophistication, trust and reliance upon Mr Tilli and Mr Bianchi in the preparation of the returns, her age and current financial position including the impact of Mr Tilli's bankruptcy. In her view, unless the penalty was remitted, she would suffer an unjust or unintended result.
5. As I have already discussed, there is no evidence before the Tribunal directed to her lack of financial sophistication or the nature and extent of her reliance on Mr Tilli or Mr Bianchi. PSLA 2012/5 makes clear that factors such as the Applicant's financial position, including their assets income or capacity to pay, are not relevant considerations in determining whether remission of the penalty is appropriate. A clear distinction is drawn between the imposition of penalties which is directed to matters relevant to the blameworthiness of the conduct and the recovery of those liabilities which may involve consideration of broader or different considerations.
6. In any event, even if I were persuaded those matters were relevant in the exercise of the remission discretion, there is no evidence before me in respect of her current financial position, the impact of Mr Till's bankruptcy, or how she will suffer an unjust or unintended result. Mrs Till's failure to attend the final hearing on account of being overseas, is a fact difficult to reconcile with her contention that her limited income and asset position require a remission of the penalty.
7. At the forefront of my mind is that the exercise of the remission discretion must be consistent with the purpose of the penalty regime. I have found the Applicant's conduct was not careless, passive or isolated. There was a wilful blindness and complete abdication of responsibility for her tax affairs. In the absence of a full and proper explanation, remission (even in part) would risk conveying a message that reckless indifference or voluntary disengagement carries no real consequences. I do not consider that outcome would be consistent with the purpose of the legislative regime.

1. Having regard to the evidence, I am satisfied:
   • During the Relevant Years, the shortfall amount as a result of a false or misleading statement resulted from recklessness and the penalty was properly imposed at 50% of the tax shortfall amount;
   • In circumstances where the same penalty was imposed in subsequent years, the uplift of 20% in the 206 and 2017 income year applies; and
   • There is no basis upon which the discretion to remit the shortfall penalties should be exercised.
2. The Applicant has therefore failed to discharge her onus of proving the Penalty Assessment are excessive and the Commissioner's objection decision is therefore affirmed.

[4] Taxation Administration Act 1953 (Cth) (TAA 53), Sch 1, s284-80

[6] TAA 53, Sch 1, s298-10

[9] Sanctuary Lakes Pty Ltd v Commissioner of Taxation [2013] FCAFC 50; (2013) 212 FCR 483 AT [193] per Greenwood J

[10] Trautwein v Federal Commissioner of Taxation [1936] HCA 77; (1936) 56 CLR 63 at [87]

[11] Gauci v Federal Commissioner of Taxation [1975] HCA 54; (1975) 135 CLR 81 at [89]

[12] Federal Commissioner of Taxation v Dalco [1990] HCA 3; (1990) 168 CLR 614 at [624]

[13] Pascoe v Federal Commissioner of Taxation (1956) 30 ALJR 402 at [403]

[14] Imperial Bottleshops Pty Ltd & Egerton v Federal Commissioner of Taxation [1991] FCA 276; (1991) 22 ATR 148 at [155]

[15] BRK (Bris) Pty Ltd v. Federal Commissioner of Taxation [ 2001] FCA 164; 2001 ATC 4111; [2001] FCA 164; (2001) 46 ATR 347 per Cooper J at [77]

[16] See Bosanac v Commissioner of Taxation [2019] FCAFC 116; (2019) 267 FCR 169 and Federal Commissioner of Taxation v Ross [2021] FCA 766

[17] Practice Statement Law Administration 2012/5 'Administration of the false or misleading statement penalty - where there is a shortfall amount' at paragraph 16F