Brown v Commissioner of Taxation [1999] FCA 563

FEDERAL COURT OF AUSTRALIA

Brown v Commissioner of Taxation [1999] FCA 563

EXPLANATORY STATEMENT In these proceedings Mr Brown, the former Minister of Tourism, challenged a decision of the Administrative Appeals Tribunal refusing him an extension of time to lodge an objection against an assessment of income tax for the tax year 1991. The Commissioner had assessed Mr Brown to tax on a gift to him of a home unit worth $1 million from a company with which Mr Ray, a property developer, was involved. Mr Brown claimed he was not liable to pay tax on the $1 million because what he received was just a gift and not income. The Tribunal did not believe Mr Brown. It had regard to some letters which suggested that the transfer of the unit to Mr Brown took place in satisfaction of a claim to commission by Mr Brown for introducing a delegation of Japanese visitors to Mr Ray. That delegation subsequently purchased from interests with which Mr Ray was associated land in the Tweed district of NSW. In conducting a hearing into the merits and making findings of credit the Tribunal erred in the approach it should have taken to the question whether an extension of time should have been granted to Mr Brown to permit him to object against the assessment and appeal against it. The present judgment makes no determination as to whether Mr Brown is or is not assessable to tax in the circumstances of the case. That is a matter which, as a result of the judgment will need to be determined by the Administrative Appeals Tribunal or the Court unless settled between Mr Brown and the Commissioner. 6 May 1999

FEDERAL COURT OF AUSTRALIA

Brown v Commissioner of Taxation [1999] FCA 563

INCOME TAX – objections against assessments – objection lodged outside time prescribed – whether extension of time to object should be granted – whether Administrative Appeals Tribunal erred in law in determining that the taxpayer would fail in an appeal taking into account evidence adduced by the Commissioner and matters of credit. Decision of Tribunal set aside. Taxation Administration Act 1953 (Cth), s 14ZW Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344 considered Case 18/94 (1994) 94 ATC 204 cited Windshuttle v Deputy Federal Commissioner of Taxation (1993) 93 ATC 4992 followed Scott v Federal Commissioner of Taxation (1966) 117 CLR 514 approved Reuter v Federal Commissioner of Taxation (1993) 93 ATC 5030 followed Reuter v Federal Commissioner of Taxation (1993) 93 ATC 4037 approved Zizza v Commissioner of Taxation (Katz J, 1 February 1999, unreported) FCA 37 cited Kim Hyun Tai v Bolkus (1996) 42 ALD 249 cited Lighthouse Philatelics v Commissioner of Taxation (1991) 32 FCR 148 cited Comcare v A'Hearn (1993) 119 ALR 85 referred to Wedesweiller v Cole (1983) 47 ALR 528 referred to Fardon v Federal Commissioner of Taxation (1992) 92 ATC 4339 referred to Lovatt v Le Gall (1975) 10 SASR 479 cited