Tey v Commissioner of Taxation

REASONS FOR JUDGMENT 1 This is an appeal from a decision of the Administrative Appeals Tribunal ('AAT') given on 13 February 2006 in which the AAT affirmed the respondent's decision not to remit penalties imposed by the respondent on 2 December 2004 for the applicant's failure to lodge her income tax returns for the years ended 30 June 2001 and 2003. An appeal to this Court lies only on a question of law: s 44 of the Administrative Appeals Tribunal Act 1975 ('the AAT Act'). 2 The existence of a question of law is now not merely a qualifying condition to ground the appeal, but also the subject matter of the appeal itself: TNT Skypak International Australia Pty Ltd v Federal Commissioner of Taxation (1988) 82 ALR 175 per Gummow J at 178. It is for the applicant to precisely identify the question of law which founds the jurisdiction of this Court to hear the appeal: Birdseye v Australian Securities and Investments Commission [2003] FCAFC 232 at [18]. 3 The following facts are largely taken from the respondent's outline of submissions and from the decision appealed against. 4 The applicant failed to lodge her income tax returns for the years ended 30 June 1999, 2000, 2001 and 2003 by the prescribed dates. Reminder notices were sent to her on 29 October 2002 and 29 November 2002 in respect of her failure to lodge the 1999, 2000 and 2001 returns. 5 On 3 May 2003 the respondent advised the applicant in writing that action to obtain lodgement of the 1999, 2000 and 2001 returns would be suspended until 16 May 2003. She was later advised by the respondent that action would be further suspended until 13 June 2003. 6 On 2 December 2004, in relation to the applicant's income tax for the years ended 30 June 2001 and 2003, the respondent made a determination under clause 286-80 of Schedule 1, of the Taxation Administration Act 1953 (Cth) ('TAA') that a penalty amount of $550 for each year of income was imposed for failing to lodge the income tax returns for the years of income on time ('the FTL penalty decision'). The total amount of penalty therefore was $1100 which was payable by 29 December 2004. 7 On 23 December 2004 the applicant wrote to the respondent requesting remission of the penalties. On 24 February 2005 the respondent advised the applicant, in writing, of the respondent's decision not to remit the penalties because the income tax returns for the years of income had still not been lodged by the applicant. 8 On 22 April 2005 the applicant lodged a notice of objection against the FTL penalty decision and sought further time to forward grounds of objection. On 31 May 2005 the respondent disallowed the applicant's request for further time, again because returns had still not been lodged for the years of income. The respondent gave the applicant until 27 June 2005 to lodge the returns for the years of income and provide any further information. The returns were not lodged and, on 28 June 2005, the respondent disallowed the objection and sent a notice of decision to the applicant ('the FTL penalty remission decision'). 9 The applicant sought review of the FTL penalty remission decision in the AAT under Part IVC of the TAA. The matter was heard by the AAT on 18 January 2006. It gave its decision on 13 February 2006. That is the decision which is the subject matter of this appeal. 10 There was evidence before the AAT that the applicant carried on a business and, as such, was required to lodge business activity statements on a quarterly basis. The evidence was that she had lodged those statements, although usually late. 11 At the hearing before the AAT the applicant gave evidence. In its reasons, the AAT described her evidence: 'Essentially the applicant's evidence was that she was engaged in various Family Court and other litigation proceedings during the time when her income tax returns were due to be lodged And further that she had computer accounting problems all of which led her to not being able to prepare her returns and lodge the same in time.' 12 The AAT noted, however, that she had been able to lodge her 2002, 2004 and 2005 income tax returns during the same period and, as well, she had lodged business activity statements, although, as I have said, some were late. The AAT further noted that it emerged from the applicant's evidence that the real reason that she had not lodged her 2001 and 2003 income tax returns was that she did not believe that she was liable to pay any income tax for those years. 13 At the time of the hearing the applicant had still not lodged the returns for 2001 and 2003, although she stated that she intended to do so within the near future. It may be that, in fact, she lodged those returns on the same day as the hearing. 14 After stating the relevant facts about which the AAT observed 'are not seriously in dispute', the AAT gave short reasons for its decision: '7. The respondent imposed penalties of $550 and under s 286 of the Taxation Administration Act Schedule 1 for each of the offences constituted by the failure to lodge the 2001 and 2003 returns. 8. The respondent declined to remit these penalties under s 298-20 of the Taxation Administration Act Schedule 1 as the respondent took the view that the reasons advanced by the applicant for her failure to lodge the relevant income tax returns did not warrant any reduction in the penalty. 9. In the Tribunal's view the decision of the respondent was justified and the applicant has not advanced any grounds which would justify any remission of the penalties imposed by the respondent.' 15 The applicant lodged her notice of appeal to this Court on 15 February 2006. The questions of law said to be raised on the appeal are: '(a) The application of s 286 of the Taxation Administration Act Schedule 1; and (b) the application under s 298-20 of the Taxation Administration Act Schedule ; (c) see enclosed decision.' 16 The grounds to support the questions of law were identified in the notice of appeal as: '(a) The Administrative Appeals Tribunal's admitted information supplied by the Respondent as evidence objected by the Applicant. Evidence that were (sic) not relevant. (b) The Tribunal erred and mislead (sic) by information/evidence provided by the Respondent. (c) The decision of the Tribunal was SUBJECTIVE AND UNJUST. (d) The decision of the Tribunal made no mention of substantial evidence provided by the Applicant. (e) There was no tax payable by the Applicant for years 2001 & 2003.' 17 On 7 March 2006 Lee J ordered the applicant to file particulars of grounds of appeal by 28 March 2006. On that day the applicant filed a document which purports to give particulars of the grounds of appeal. On this appeal the applicant sought to adduce further evidence. The material which is sought to be adduced did not come into existence until after the respondent had made the decision complained of. Indeed, the material did not come into existence until after the AAT decision. The applicant sought to tender the material for the purpose of inviting this Court to come to a different conclusion on the facts to that arrived at by the AAT. It should not be admitted: Servos v Repatriation Commission (1995) 56 FCR 377 per Spender J at 385. 18 An examination of the notice of appeal and the particulars contained in that last mentioned document indicate that no question of law is raised on this appeal. Clearly, the grounds in paragraphs (b) and (c) are not questions of law. Nor, in my opinion, are the grounds in paragraphs (a), (d) and (e). In any event, the AAT was obliged to consider any relevant material which had been supplied to it by the respondent pursuant to the respondent's obligation under s 37 of the AAT Act. None of the information supplied was relevant. The complaint in paragraph (d) cannot be sustained. The AAT's reasons, to which I have already referred, show that the AAT did have regard to the applicant's evidence. The AAT was under no obligation to refer to each piece of evidence that the applicant had put before the AAT. 19 Paragraph (e) is simply not relevant. At the time the respondent made the FTL penalty remission decision, which was subject to review before the AAT, the respondent did not know whether there was any tax payable by the applicant for the years under question because the applicant had not lodged her returns. They were still not lodged, I think, at the time that the AAT made its decision. 20 The applicant argued on this appeal that the respondent should not have imposed a penalty because there was no tax payable in the two relevant financial years. That, as I have said, was not known to the respondent at the time the FTL penalty remission decision was made. Nor, if it is relevant, was that known to the AAT when it made its decision. In any event, that is not a question of law. She also argued that in the past the Deputy Commissioner had not imposed penalties on other people where no tax was payable. That was not a fact proved before the respondent or the AAT. It is not a relevant matter on this appeal. She also said that the respondent was unfairly targeting her. There was no evidence before the AAT of that and that does not raise any question of law. She contended that the AAT should be more sympathetic. That, again, unfortunately, is not relevant and certainly is not a question of law. In my opinion, the appeal does not raise any question of law. 21 It is incompetent and should be dismissed with costs. I make the following orders: