"the answers to those questions are already contained in the previous submissions of the applicant, the evidence provided to date or already the knowledge of the respondent."[13]

14. On 12 February 2025, the Commissioner filed Written Submissions[14] (Commissioner's Submissions).
15. The proceedings are only concerned with whether the Applicant met the requirements in subsections 5(1)(a) and 5(1)(g) of the BCF Act. The remaining requirements in subsections 5(1)(b), (c), (d), (e) and (f) of the BCF Act are not in dispute.[15]
16. An important issue in the proceeding is whether the Applicant has discharged the burden of proving under section 14ZZK(b)(ii) of the TAA 1953 that the Objection Decision should have been made differently.

1. The parties agree as to the issues to be determined by the Tribunal on the application for review. The issues (referred to as Issue 1 and Issue 2 respectively) are conveniently set out in paragraph [44] of the Commissioner's SFIC as follows:

(a) whether the Applicant made payments, as reported in its BAS, to PN in the Relevant Periods. and

(b) if (a) is answered in the affirmative, whether:

(i) the payments give rise to PAYGW obligations under Subdivision 12-B, 12-C or 12-D in Schedule 1 to the TAA Act 1953 in accordance with subparagraph 5(1)(a)(i) and subsection 5(2) of the BCF Act. or

(ii) the Applicant had an obligation to pay an amount under Division 13 in Schedule 1 to the TAA Act 1953 in relation to an alienated personal services payment that it received in that period, in accordance with subparagraph 5(1)(a)(ii) and subsection 5(2) of the BCF Act.

Issue 2; the Applicant engaged in a scheme

(a) whether the Applicant or any associate or agent of the Applicant, entered into or carried out a scheme or a part of a scheme for the sole or dominant purpose of making the Applicant entitled to the CFB or increasing the amount of the CFB to which the Applicant would otherwise be entitled for the Relevant Periods, within the meaning of paragraph 5(1)(g) of the BCF Act."

1. The Commissioner submits that if the decision of the Tribunal is favourable to him on Issue 1, the Applicant will not have been entitled to receive any CFB and the Tribunal would not have to consider Issue 2.
2. The Applicant's position on Issue 1 was that it accepted it could not press an argument that the payments were simultaneously made by it in accordance with subparagraph 5 (1)(a)(i) and subparagraph 5(1)(a)(ii) of the BCF Act. Accordingly, it abandoned the latter and pressed its argument that payment was made under subparagraph 5(1)(a)(i) of the BCF Act.
3. The Applicant also accepted that if the Tribunal determined Issue 1 in favour of the Commissioner, the Tribunal would not have to determine Issue 2 as to whether the Applicant had engaged in a scheme.

1. Mr Ross indicated in his opening that the Applicant had been denied procedural fairness in the matter. The main reason was said by him to be the denial by the Tribunal of the earlier request for an extension because counsel was not available on the hearing date. There was also a complaint which the Tribunal understood to be about not having had the opportunity to read the bundle of authorities provided by the Commissioner in advance of the hearing. The Tribunal considers it appropriate to deal at the outset of these Reasons with some of the procedural history of the matter to provide context for the Applicant's recent requests for the vacation of the hearing date. Those requests were refused by the Tribunal for the Reasons which follow, and the substantive hearing proceeded as listed on 21 February 2025.
2. The progress of the Application for Review has been beset by delays, largely on the part of the Applicant or its representative, Mr Ross, since its inception.
3. The following provides a summary of the key steps in the progress of the Application for Review between 21 November 2023 and 21 January 2025:

(a) On 30 November 2023, the Tribunal granted an extension of time for the filing of the Application for Review under s. 29(7) of the AAT Act until 21 November 2023. > > (b) On 4 February 2024, directions were made by the Tribunal including a direction that the Applicant file and serve is Statement of Facts, Issues and Contentions and any evidence (including any witness statement) by 29 March 2024. > > (c) On 22 April 2024, the Tribunal directed that any further evidence (including any witness statements) be filed and served by 31 May 2024. > > (d) On 5 June 2024, the Applicant was directed by the Tribunal to reply to the Commissioner's request for further information and to provide any additional evidence relied upon by 10 July 2024. > > (e) On 8 August 2024, at a non-compliance directions hearing, Deputy President Lazanas made directions that the Applicant file and serve any additional evidence by 23 August 2024, with hearing certificates (indicating availability of the parties for a hearing in the period October/November 2024) to be filed by 27 August 2024. The Applicant indicated at this hearing that it wished to have 2 summonses to produce documents issued by the Tribunal and was told to make the necessary requests without delay. In the event, the requests for summonses were not made to the Tribunal until 20 November 2024. > > (f) On or shortly after 29 October 2024, the Tribunal listed the matter for a one-day hearing on 21 February 2025. The hearing date was taken from a list of available dates, agreed by the parties, and considering and accommodating the availability of counsel for the Applicant, which was contained in an email dated 29 October 2024 from the Applicant's representative to the Tribunal; and > > (g) On 21 January 2025 the Tribunal made pre-hearing directions for the period leading up to the hearing date of 21 February 2025.

4. On 29 January 2025, Mr Ross (accountant for and representative of the Applicant) sent an email to the Tribunal (Applicant's Adjournment Request) which sought "an urgent vacation of the hearing date on 21 February 2025" and a "postponed hearing date in late April or May 2025."
5. The grounds for the requested adjournment were set out in the Applicant's Adjournment Request, the most substantial of which concerned alleged delays around the issue of and compliance with two summonses (one addressed to the Commissioner and the other to the Tax Practitioners Board) requested by the Applicant on 20 November 2024. The Applicant's Adjournment Request then continued:

"I request that this application be determined urgently after the Commissioner for Taxation has had an opportunity to respond to it on the merits and that this application be dealt with in chambers on the papers while I am overseas on annual leave until 4 February".

6. On 31 January 2025, the Respondent's representative, Mr Pagano, responded by email to the Applicant's Adjournment Request in the following terms:

"The Respondent opposes the Applicant's request to have the hearing adjourned to a later date. > > As noted in our correspondence yesterday, the Respondent only received the sealed summons on Tuesday 28 January 2025. The Applicant's failure to serve us in a timely manner has truncated the timeframe available to produce the summonsed documents.... > > The Commissioner is confident that we will have compiled all documents within the scope of the summons, to the extent legally possible, by Wednesday 5 February 2025. No further extensions will be required for the ATO to comply with the summons return date, or indeed any of the Tribunal's orders made on 21 January 2025. > > The Respondent is ready to go to hearing, and it is our position that there is no justifiable reason to have the hearing date adjourned." > > The Commissioner went on to address individually each of the grounds raised in the Applicant's Adjournment Request.

7. The Tribunal listed the matter for a Case Management Telephone Directions Hearing (CMTDH) on 5 February 2025 at 9 am, the earliest possible listing time having regard to Mr Ross's stated availability.
8. After hearing the parties' submissions as to the stated grounds for adjournment set out in the Applicant's Adjournment Request, the Tribunal referred to and explained the following matters which the Tribunal considers in determining whether to grant an adjournment.
9. The starting point is sections 9 and 56 of the Administrative Review Tribunal Act 2024 (Cth) (ART Act).
10. Section 9 of the ART Act contains the objective of the Tribunal, including relevantly, subsection 9(b), which reads:

"The Tribunal must pursue the objective of providing an independent mechanism of review that ...

(b) ensures that applications to the Tribunal are resolved as quickly, and with as little formality and expense, as a proper consideration of the matters before the Tribunal permits".

Section 56 of the ART Act provides that the Decision makers and their representatives as well as other parties and their representatives are to assist the Tribunal to achieve the objective in section 9. The Tribunal directed Mr Ross's attention to s.56(2) of the ART Act, which reads:

"A party to a proceeding in the Tribunal (other than the decision-maker in a proceeding for review of a decision) and any person representing the party must use their best endeavours to assist the Tribunal to achieve the objective in section 9."

The parties were then taken by the Tribunal to the paragraphs concerning adjournments contained in paragraphs 5.12 to 5.15 of the Administrative Review Tribunal (Common Procedures) Practice Direction 2024 (Practice Direction). Paragraph 5.12 of the Practice Direction provides:

"5.12 The Tribunal will not adjourn a hearing date unless it considers that there are good reasons to justify the adjournment. In general, the following matters are not, of themselves, sufficient reasons for an adjournment to be granted: > > (a) the unavailability of counsel or representation..."

The parties were then taken by the Tribunal to the Note for legal and other representatives - Tribunal processes (Note), authorised by the President of the Tribunal and published to the profession and to the public on 24 October 2024. The Note provides guidance to legal and other representatives appearing before the Tribunal regarding the expectations of the Tribunal as to meeting the Tribunal's objective as to as to timeliness and the range of measures which support the Tribunal in its timely processing of applications for review, from beginning to end including in respect of requests for adjournments. The parties were referred to the following dot points which appear in the Note under the heading "What does this mean for you?":

"* Requests for adjournment will be granted only where there is a good reason for doing so and it is fair to do so in all the circumstances. Parties should not assume that a request for an adjournment will be granted. That is so even if all parties agree. > > * Representatives will be expected to comply with Tribunal directions in the same way that they are expected to comply with court directions and should be aware that non-compliance may have serious consequences."

Finally, the parties were taken to the decision of the President of the Tribunal in Bunnings Group Limited and Privacy Commissioner (Guidance and Appeals Panel)[16] (Bunnings), a matter in which the parties had made a joint request on 17 December 2024 that the directions hearing listed for 20 December 2024 be adjourned to 10,11 or 12 February 2025. The Tribunal in Bunnings refused the request for an adjournment. I referred to, and read aloud to the parties, paragraphs [7] - [9] of Bunnings, which state:

"7. Consistent with s.9 of the ART Act, the Tribunal has a responsibility to manage its cases, from lodgement until final resolution, expeditiously. It must retain control of the progress of its cases rather than allowing the parties to determine the pace at which a case proceeds. Consequently, requests for an adjournment of any case event, including a directions hearing or a substantive hearing, will not be granted unless there is good reason to do so. The fact that both parties agree to an adjournment on its own does not constitute a good reason. Neither does the convenience of the parties or their representatives. Once the parties are given fair notice of a case event, ordinarily, they should assume that it will go ahead as scheduled and that they will have to participate. > > 8. The assiduous manner in which the Tribunal will manage proceedings before it and retain control over their progress was emphasised in a note that was sent by the Tribunal to legal and other representatives on 24 October 2024. The note emphasised that: > > - representatives will be expected to comply with Tribunal directions in the same way that they are expected to comply with court directions. > > - requests for additional time in which to provide material will not be necessarily granted, even if all parties agree. > > - requests for extensions of time or adjournments will only be granted if there is good reason for doing so, and they will not necessarily be granted even if all parties agree; and -cases will be scheduled for hearing as soon as possible. > > 9. Consistent with s. 56 of the ART Act, parties and their representatives must conduct proceedings before the Tribunal responsibly and in a manner that supports the Tribunal to achieve its objective in s. 9. This includes complying with the Tribunal's practice directions, orders and directions. It also includes refraining from seeking extensions of time and adjournments for which there is no proper basis."

In the event, the Tribunal refused the Applicant's Adjournment Request and confirmed with the parties that the hearing of the application for review would be proceeding as listed on 21 February 2025. The Tribunal was persuaded that there was no proper basis for granting an adjournment in circumstances which included that:

(a) the Applicant had been aware of the 21 February 2025 hearing since the end of October 2024 when the matter had been listed by the Tribunal for hearing. The date chosen for the hearing had expressly taken account of the availability of Mr C. Bevan, counsel for the Applicant, with a date chosen from the list of Mr. Bevan's available dates in February and March 2025 provided by Mr Ross to Mr Pagano and copied to the Tribunal and Mr Bevan in an email dated 29 October 2024. > > (b) Deputy President Lazanas had, in a non-compliance directions hearing on 8 August 2024, requested of Mr Ross that the Applicant take the necessary steps for the issuing of any summons as expeditiously as possible. Mr Ross filed the Applicant's request to issue the summonses on 20 November 2024. Notwithstanding the delay, for various reasons, until late January 2025 when the summonses were served, the Tribunal was satisfied that the Commissioner and the Tax Practitioners Board had taken, or were taking, the necessary steps to produce the required material in response to the summonses. > > (c) The parties had agreed that the application was a one-day hearing, there were no witnesses in the matter other than EN, who was not required for cross examination, and once the summonses were responded to there were no outstanding matters to be completed before the substantive hearing could proceed.

Accordingly, when Mr Ross sought in opening to re-agitate the question of an adjournment, the Tribunal reminded him of the history of the matter, noted the strenuous opposition of the Commissioner to any further delays and informed Mr Ross that the hearing of the Application for Review would proceed as scheduled, which it did. It follows from what is said above that the Tribunal rejects the proposition that the Applicant has been denied procedural fairness in this matter.

1. The background facts concerning the corporate status of the Applicant, set out in paragraphs [10] - [17] of the Commissioner's Amended SFIC, are agreed between the parties. The directors of the Applicant during the Relevant Periods were EN and PN, who are spouses.
2. On 28 October 2019, the Applicant entered a contract with Rowe Consulting Services Pty Ltd (Contract) for the provision of services to the Reserve Bank of Australia (RBA).[17] Under the terms of the Contract, the Applicant was to procure that the Nominated Person in Part 1: Work Order Form was to provide the Services (as defined). The nominated person was PN.
3. On 24 January 2020, the Applicant issued a tax invoice to Rowe Consulting for $18,711 for services rendered in December 2019.[18]
4. On 28 January 2020, the Applicant issued a tax invoice to Rowe Consulting for $8,019 for services rendered in January 2020.[19]
5. On 30 March 2020, the Applicant issued a tax invoice to Rowe Consulting for $24,750 for services rendered in February 2020.[20]
6. Commonwealth Bank statements for the account listed on the tax invoices in the payment instructions are produced as prima facie evidence of payments being made to the Applicant by "ROWE TRUST" for $18,711 on 28 January 2020, $8,019 on 29 January 2020 and $24,750 on 30 March 2020.[21]
7. In the Applicant's BAS for the March 2020 Quarter, the Applicant reported W1 of $19,642 and W2 of $5,938.[22] This was later amended to W1 of $31,350 and W1 of $8,590.[23]
8. In the Applicant's BAS for the June 2020 Quarter, the Applicant reported W1 of $12,500 and W2 of $2,500.[24] This was later amended to W1 of $15,270 and W1 of $2,886.[25]
9. The Tribunal notes that the Applicant contends for the purposes of the Application for Review that the original BAS lodged by the Applicant for the Relevant Periods are the correct ones.[26]

1. In the Applicant's SFIC, the Applicant advanced its withholding of payment argument based on the Applicant being liable to pay an amount on account of alienated personal services under Division 12 Schedule 1 of the TAA 1953 under subsection 5(1)(a)(ii) of the BCF Act. In the Applicant's Amended SFIC, it advanced a withholding of payment argument based on both subsections 5(1)(a)(i) and 5(1)(a)(ii) of the BCF Act. At the hearing of the Application for Review, accepting that both arguments could not be run simultaneously, the Applicant only pressed its argument under subsection 5(1)(a)(i) of the BCF Act, around the payment of salary/wages or director fees to PN.
2. The Applicant's primary submission on the payment requirement issue is that the Contract provides for the provision of services by PN (as the Nominated Person), and, when supported by the prima facie evidence comprised of the tax invoices (referred to in paragraphs [39], [40] and [41] above) and the bank statements, this provides sufficient evidence to establish the Applicant's entitlement to the CFB Payments in the Relevant Periods.[27] The Applicant's Amended SFIC at paragraphs [5] - [7], repeats what is said in the Bevan memorandum at paragraphs [4] - [6] as to the asserted error in the Objection Decision in relation to the payment requirement.
3. The Applicant's Submissions contend that the Tribunal has sufficient evidence to find on the balance of probabilities that PN performed the work under the Contract and was remunerated by transfers from the Applicant's bank account to PN's bank account and that such payments are accountable for as remuneration of PN under subsection 5(1)(a)(i) of the BCF Act.[28]
4. At paragraph [17] of the Applicant's Submissions, the Applicant states that the following payments were made by it to PN after the date of Contract for the period ending 31 March 2020:

"(a) 3/01/2020 $1,000.00 > > (b) 5/01/2020 $5,000.00 > > (c) 30/01/2020 $11,000.00 > > (d) 3/02/2020 $1,000.00 > > (e) 13/02/2020 $500.00 > > (f) 18/02/2020 $500.00 > > (g) 19/02/2020 $500.00 > > (h) 28/02/2020 $600.00 > > (i) 15/03/2020 $500.00 > > (j) 24/03/2020 $350.00 > > (k) 31/03/2020 $2,000.00 > > (l) TOTAL $22,950.00".

5. The Applicant contends that it is the taxpayer who determines the nature of an expense or activity and not the regulatory authority. The Applicant relies, in support of this proposition, on a passage from the Full Court Federal Court decision in Magna Alloys and Research Pty Ltd v Federal Commissioner of Taxation[29] (Magna Alloys) which states:

"...What is required is that the relevant expenditure be appropriate and adapted for the ends of the business carried on for the purpose of earning assessable income....For practical purposes and within the limits of reasonable human conduct, it is for the man who is carrying on the business to be the judge of what outgoings are necessarily to be incurred....It is no part of the function of the Act or of those who administer it to dictate to taxpayers in what business they shall engage or how to run their business profitably or economically."[30]

6. The Applicant's Submissions which go to the issue of whether the Applicant engaged in a scheme, including the argument about whether section 254T of the Corporations Act 2001 (Cth) has application, have been considered by the Tribunal, but are not summarised in these Reasons because the Tribunal has determined that it is not necessary for the Tribunal to determine Issue 2. The Tribunal notes, in relation to the section 254T argument, that there is no evidence before the Tribunal that the directors of the Applicant gave consideration at the material time to the issues around the application of that provision to the Applicant's circumstances.

1. On an application for review, the Applicant bears the burden of proving that the Objection Decision should have been made differently (section 14ZZK(b)(ii) of the TAA 1953).
2. Relying upon this provision, the Commissioner puts the Applicant to proof of the facts upon which he relies to discharge his burden of proving that the Objection Decision should have been made differently. The standard of proof is on the balance of probabilities and no special burden exists beyond that.[31] As Logan J stated in Cheung v Commissioner of Taxation,[32] section14ZZK does not mean proof to demonstration, only proof on the balance of probabilities (referencing section 140(1) Evidence Act 1995 (Cth)).[33]
3. In RFZD and Commissioner of Taxation[34], SM Kirk observed:

"...Discharging the burden of proof requires the Applicant to establish the facts upon which it relies and, if it is necessary for the Applicant to establish a particular fact in order to displace the Respondent's decision, the Applicant must satisfy the Tribunal with respect to that fact."[35] > > ..." The taxpayer can discharge the burden in any one of several ways. For example, it can do so by direct evidence and/or by drawing inferences from the evidence, but not from conjecture. While evidence from a taxpayer is not prima facie unacceptable, uncorroborated, self-serving statements are to be tested closely and received with the greatest caution. Importantly, there is no onus on the Commissioner to show that an...objection decision, is correct. Therefore, the Applicant cannot succeed merely by identifying errors or flaws in the Respondent's decision."[36] (citations omitted)

4. Importantly, the Commissioner is entitled to put the Applicant to proof of any or all facts relevant to the Objection Decision.[37]
5. In the Objection Decision, the Commissioner stated the basis on which the Respondent was of the view that the Applicant had failed to discharge its onus of proof:

"25. We are of the view that you do not satisfy the payment and withholding requirements for a CFB payment, because there is insufficient documentation available to establish that you made payments subject to PAYGW to the directors, of the following amounts in relevant tax periods, as per amended business activity statement lodged on 9 December 2022: > > Tax Period ending.....W1..... W2..... > > 30 March 2020..... $31,350.....$8,590..... > > 30 June 2020..... $15,270.....$2,886." > > "31. We consider that there is insufficient documentation available for you to establish that there has been actual or constructive payment of wages in the amount referred to in paragraph 25 to [PN] in the relevant periods (the March 2020 to June 2020 tax periods), pursuant to section 11-5 of Schedule 1 to TAA 1953. We considered the following: > > (1) We have reviewed the information provided and have found that the payments in the bank statements are not consistently timed payments such as weekly, fortnightly or monthly. There are no payment transactions that are recorded on bank statements as salary/wages or director fees. > > (2) Payments have been highlighted and advised are for director fees have the description "Transfer to xx0521" and "Personal Loan Repayment." > > (3) You last reported wages on your 2016 Income Tax Return. No wages have been reported since and you were employed elsewhere in 2017 and 2018. > > (4) In 2019, you reported in your income tax return dividend payments of $55,000 were made to your directors. > > (5) We are unable to clearly establish what the transfers to account ending in xx0521 were paid for as bank statements provided for prior periods show a similar pattern and these were not reported as payments subject to PAYGW. > > (6) A review of your business activity statements between 1 July 2016 to 31 December 2019 was completed, and we have identified that historically you have not paid wages or director fees. This was shown by no amounts having been declared at W1 and W2 on business activity statements during this period. > > (7) No payslips were able to be provided for the relevant periods (or any previous periods). > > (8) The information in our possession and supplied by you does not substantiate th[at] wages have been paid to [PN], and therefore does not specifically confirm that wages had been paid in the March 2020 and June 2020 tax period."[38]

6. The Commissioner's fundamental complaint is about the lack of contemporaneous evidence of both payments made by the Applicant to PN which add up to the total amounts shown against W1 (gross wages) and W2 (PAYG withholding) in the BAS for the Relevant Periods, and what the purpose of the payments was.
7. The Tribunal is entitled to place "great weight on the absence of contemporaneous evidence" which gives a clear explanation of both the fact of, and the purpose for which, particular payments have been made. The focus of the Tribunal on the absence of probative contemporaneous records which prove, on the balance of probabilities, what actually occurred, is not unreasonable. As Charlesworth J explained in McPartland v Commissioner of Taxation:[39]

"It guards against the mischief that a taxpayer may wait years before explaining transactions by way of post-construction, so as to treat past transactions in a way that suits his or her circumstances at a later time."[40]

8. A lack of consistency in the evidence provided by the Applicant may also tell against it when deciding whether the onus of proof has been discharged by the Applicant. The Commissioner has made the following observations about inconsistencies which he submits have arisen from the contemporaneous evidence which is available:

"(a) The Applicant's BAS reporting for labels W1 and W2 for the Relevant Periods were extraordinary in comparison to previous recent BAS reporting. > > (b) There were no changes to the Applicant's circumstances in or around the time of the initial BAS lodgement (7 September 2020) that reasonably explains the extraordinary reporting for the Relevant Periods aside from the availability of CFB relief. and > > (c) The amounts highlighted in bank statements, contended by the Applicant as being salary or wages ...paid to [PN], are not payments of salary or wages ...to [PN] because they were not contemporaneously characterised or identified as such."

1. The key points in the Commissioner's Submissions on the payment requirement issue can be summarised as follows:

(a) The Applicant has not established, through contemporaneous evidence, that the payments and the associated withholdings purportedly made by it to PN and which are said to be characterised as director's fees, satisfy subsection 5(1)(a)(i) of the BCF Act.[41] > > (b) the Applicant has provided inconsistent and contradictory entries for items W1 and W2 in its BAS for the Relevant Periods. The Applicant cannot meet its burden of proof without establishing the BAS entries upon which it relies. The necessary contemporaneous records establishing the underlying payments and amendments and planned amendments to the BAS have not been produced.[42] > > (c) the payments in the Relevant Periods are not identified by the bank statement entries as salary, wages or director's fees and there is a lack of other contemporaneous evidence to demonstrate the nature of the payments.[43] and > > (d) there is no pattern of wage-paying behaviour in the period from 1 January 2013 to date, other than the W1 and W2 reported in the Relevant Periods.[44]

2. The Commissioner's concluding submission on the Applicant's failure to discharge the onus, states:

"The inconsistent and contradictory contentions and lack of contemporaneous, objective evidence regarding the nature of the payments means that the Applicant has not met the required burden of proof. The Commissioner contends that its differing explanations are self-serving reconstructions, haphazardly forwarded to characterise disparate payments to whatever would entitle the Applicant to CFB. The self-serving nature of the Applicant's evidence warrants scrutiny, and, on the balance of probabilities, the Applicant has not met its onus of proving the character of the purported payments as salary, wages, director's fees or PSI."[45]

3. Mr Pagano repeatedly said in his oral submissions to the Tribunal that this matter is all about "substantiation". In saying that the Commissioner's case was "purely one of substantiation" he was adverting to the Commissioner's contention that the Applicant had failed to discharge the onus of proof it carried under section 14ZZK(1)(b)(ii) of the TAA 1953.
4. In support of that primary submission, Mr Pagano made oral submissions as follows:

(a) The Tribunal will need to be satisfied on the balance of probabilities as to whether the payments made by the Applicant to PN had a withholding obligation attached to them under any of the relevant subdivisions of Division 12 in Schedule 1 to the TAA 1953. > > (b) The Commissioner says that the Applicant has not discharged its onus of proof because the bank statements relied upon by the Applicant to substantiate the W1 and W2 entries in the Applicant's BAS: > > > (i) do not add up to the correct quantum stated in the BAS. > > > > (ii) none of the bank statement entries relied upon refer to director's fees. and > > > > (iii) none of the entries state a connection to the Contract. > > (c) There are no minutes of directors' meetings of the Applicant which evidence the payment of directors' fees or wages to PN under the terms of the Contract. > > (d) There is no credible evidence documenting why the Applicant changed from its history of paying dividends (in place since 2016) to the payment of wages. On this point the question for the Tribunal is not whether the Applicant should have issued a dividend but whether it can be satisfied that the payments relied upon carried the necessary withholding obligation. > > (e) The Tribunal was taken to paragraph [17] of the Applicant's Submissions and was asked to compare the payments listed there with the line entries in the Applicant's Commonwealth Bank statements or the PN and EN Commonwealth Bank statements (attached to the Applicant's Amended SFIC at Tribunal Book, Tab 3, pages 11 and 13, and 15 respectively) which the Applicant relied upon to substantiate the listed payments. > > (f) Reference was made to the Applicant's bank statement entry for 30 January 2020 for a payment of $11,000 described as "Loan Repayment" and it was submitted that the Tribunal could not be satisfied that this payment related in any way to the Contract or that it was a director's fee. > > (g) Further examples were given of the entry for 21 April 2020 on the PN and EN bank statements, a payment of $10,000 described as "mortgage", which it was submitted did not evidence a director's payment or a payment to which a withholding obligation attached. Also, on the same PN and EN bank statement, was an entry for 22 May 2020 for a payment of $7,850.00 described as "Loan" which the Applicant had claimed was a director's fee payment. The statement shows that the $7,850 was transferred back to the Applicant's account on 23 May 2023 with that transaction described as" Loan repayment". It was noted that this transaction had been the subject of a specific question in the RFI, which question had not been answered by the Applicant. and > > (h) There is no differentiation in the characterisation of payments recorded as line entries in the various bank statements relied upon by the Applicant between transactions which occur prior to the date of the Contract being entered into (28 October 2019) and transactions after that date. This serves to reinforce the submission that the Applicant is unable to substantiate on a balance of probabilities that the payments referred to in the bank statements relate to the Contract or have withholding obligations attached to them.

1. While the Tribunal is satisfied that certain payments were made by the Applicant to PN in the Relevant Periods, it is not able to conclude, on the contemporaneous evidence available, that the payments relied upon by the Applicant gave rise to PAYGW obligations under Subdivision 12-B, 12-C or 12-D in Schedule 1 to the TAA Act 1953 in accordance with subparagraph 5(1)(a)(i) and subsection 5(2) of the BCF Act.
2. The Tribunal agrees with the Commissioner that the Applicant has failed to provide the necessary documentary and evidentiary substantiation of the matters referred to in paragraph [25] of the Objection Decision, (for reasons including those set out in paragraph [31] of the Objection Decision) (both paragraphs extracted in paragraph [56] above). The consequence of that failure is that the Applicant has not discharged the burden of proving, on the balance of probabilities, that the Objection Decision should have been made differently (under section 14ZZK(b)(ii) of the TAA 1953).
3. The Tribunal accepts that the Applicant received three payments from the "ROWE TRUST", for the amounts of $18,711, $8,019 and $24,750 respectively, into the Applicant's bank account xx5043. Those payments would seem to correspond to the three tax invoices raised by the Applicant and addressed to Rowe Consulting Services Pty Ltd in respect of services provided to the RBA under the Contract (see paragraphs [38] - [42] above).
4. The Tribunal can also ascertain from the bank statements for the Applicant's bank account xx5043 that transfers of funds which correspond with the amounts set out in paragraph [17] of the Applicant's Submissions (extracted at paragraph [49] above) appear, for the most part, to have been made to PN's Mastercard account xx0521. However, the substantiation difficulties begin with the descriptions which accompany the bank statement entries on the Applicant's bank account xx5043 for the amounts set out in paragraph [17] which are as follows:

(a) 3/01/2020 $1,000.00 Transfer to xx0521...Company expenses. > > (b) 5/01/2020 $5,000.00 Transfer to xx1372...no description. > > (c) 30/01/2020 $11,000.00 Loan Repayment. > > (d) 3/02/2020 $1,000.00 Transfer to xx0521...Company expenses. > > (e) 13/02/2020 $500.00 Transfer to xx1372...no description. > > (f) 18/02/2020 $500.00 Transfer to xx0521...Company expenses. > > (g) 19/02/2020 $500.00 Transfer to xx0521...Company expenses. > > (h) 28/02/2020 $600.00 Transfer to xx0521...Company expenses. > > (i) 15/03/2020 $500.00 Transfer to xx1372...no description. > > (j) 24/03/2020 $350.00 Transfer to xx0521...Company expenses. > > (k) 31/03/2020 $2,000.00 Transfer to xx0521...Company expenses.

5. The descriptions in the bank statement entries do not reference wages, salary, director's fees or provide any other reference or link to the Contract. There are no other contemporaneous documents which might assist, such as minutes of a director's meeting referencing the Contract and the payment arrangements under it. There are no payslips or other supporting documents. There is no witness evidence from JN or anyone else to provide any explanation of the purpose for which the payments were made or to reconcile those payments with the amounts shown as W1 and W2 in the Applicant's BAS for the Relevant Periods.
6. Further, the descriptions of payments in the bank statements are not distinguishable in nature from the descriptions of payments in the bank statements for the time period prior to the Relevant Periods. There is also no pattern of wage-paying by the Applicant to PN in the past, which might provide the Tribunal with a suitable reference point. All these matters underscore the need for the Tribunal to place great weight on the absence of contemporaneous evidence which would explain the purpose for which the payments under consideration have been made.
7. The Tribunal in Re Trustee for JC Mobile Sharpening Discretionary Trust[46] (JC Mobile Sharpening) was faced, in another CFB payment case, with a not too dissimilar set of circumstances to the present case in that the Applicant sought to establish the actual or constructive payment of salary and wages by relying on records of payments comprising a series of funds transfers that could not clearly be identified from contemporaneous documents as being for the purpose of paying wages or salary. Further, as is the case here, it was not clear how the payments relied upon lined up with what was reported in the Applicant's BAS.[47]
8. On the question of whether there had been an actual payment of salary or wages to a Mr Cook, SM Kirk concluded:

"Both the January to June 2020 Payments and the July to December 2019 Payments solely comprise fund transfers made by the Applicant to Mr Cook's Credit Card or to third parties purportedly on Mr Cook's behalf.....There is no contemporaneous evidence before the Tribunal to demonstrate the treatment of the January to June 2020 Payments, or the July to December 2019 Payments, beyond characterising them as what they are, namely payments to a credit card and payments to third parties for unknown purposes."[48]

9. Further, SM Kirk said, in relation to the complete absence in JC Mobile Sharpening of any relevant company minutes of director's meetings:

"Finally, the Tribunal notes that there is no contemporaneous written record of the decision by the Applicant to commence paying salary and wages to Mr Cook. In VNBM, in relation to a minute recording a decision to increase wages, Senior Member Olding stated 'Accountants in public practice are well accustomed to preparing minutes of directors' meetings. I would have thought that company minutes would be an obvious, if not the first, place to look for documentary evidence of the applicant's intention.'"[49]

10. A differentiating feature of JC Mobile Sharpening from the present case, is that in the former matter the Tribunal had the benefit of an affidavit from Mr Cook and the cross examination of both Mr Cook and the Applicant's tax agent, both of whom attended the hearing and gave evidence. As previously noted, the only witness evidence provided by the Applicant in this matter is the EN Statement, which was filed for the limited purpose of putting the Bevan Memorandum into evidence. The Applicant otherwise made the decision not to call evidence from any other witness, including PN, who was present at the hearing but did not give evidence.
11. It follows that the Tribunal does not accept the Applicant's submissions as to the sufficiency of the evidence upon which it relies, which submissions have been summarised at paragraphs [47] and [48] above. The Tribunal is not satisfied that the Applicant has provided sufficient contemporaneous documentation to establish that there has been actual or constructive payment of wages, salary, or director's fees by the Applicant to PN in the Relevant Periods. The passage quoted from Magna Alloys, a case about the deductibility of legal expenses, is not relevant for present purposes and does not address the point about the lack of evidence of the purpose for the payments to which the Applicant wishes to attach a withholding obligation.
12. Having determined Issue 1 in favour of the Commissioner, it is not necessary for the Tribunal to consider and determine Issue 2.

1. The Tribunal finds that the Applicant did not meet the eligibility requirements for the CFB for the Relevant Periods and its CFB entitlement for the Relevant Periods is nil.
2. The Tribunal further finds that on the evidence before the Tribunal, the Applicant has not discharged the burden of proving under section 14ZZK(b)(ii) of the TAA 1953 that the Objection Decision should have been made differently.
3. The Tribunal affirms the decision under review.

Appearing for the Applicant: Mr D Ross, Ross Accounting Pty Ltd

Appearing for the Respondent: Mr A Pagano, Australian Taxation Office

Solicitors for the Respondent: Mr A Mossman, Mr D Ong, Australian Taxation Office

[7] Tribunal Book, Tab 2, pages 47 - 48.

[15] Commissioner's Amended SFIC, [47].

[21] Tribunal Book, Tab 2, pages 13 - 14.

[26] Applicant's Amended SFIC, [24(f)].

[28] Applicant's Submissions, [5] - [7], [14].

[29] [1980] FCA 150; [1980] 49 FLR 183.

[30] [1980] FCA 150; [1980] 49 FLR 183, 205.

[31] Commissioner of Taxation v Cassaniti [2018] FCAFC 212; (2018) 266 FCR 385, [88] (per Steward J).

[32] [2024] FCA 1370.

[33] [2024] FCA 1370, [17].

[34] [2022] AATA 988.

[35] [2022] AATA 988, [71].

[36] [2022] AATA 988, [75].

[37] Sibai v Commissioner of Taxation [2021] FCA 1353, Jagot J at [72].

[38] Tribunal Book, Tab 12, T2, [25], [31].

[39] [2023] FCA 1260.

[40] [2023] FCA 1260, [54] - [61] at [61].

[41] Commissioner's Submissions, [22(a)].

[42] Commissioner's Amended SFIC, [53] - [58]; Commissioner's Submissions, [24] - [25].

[43] Commissioner's Submissions, [27(a)].

[44] Commissioner's Submissions, [27(d)].

[45] Commissioner's Submissions, [39].

[46] [2022] AATA 2482.

[47] [2022] AATA 2482, [46] - [50].

[48] [2022] AATA 2482, [76].

[49] [2022] AATA 2482, [112].