The Commissioner of Taxation of the Commonwealth of Australia v Traviati [2012] FCA 546

FEDERAL COURT OF AUSTRALIA

The Commissioner of Taxation of the Commonwealth of Australia v Traviati [2012] FCA 546 Citation: The Commissioner of Taxation of the Commonwealth of Australia v Traviati [2012] FCA 546

Appeal from: [2011] AATA 478

Parties: THE COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA v MARIO TRAVIATI

File number(s): VID 842 of 2011

Judge: MIDDLETON J

Date of judgment: 1 June 2012

Catchwords: INCOME TAX – penalty imposed in relevant tax income years under s 226G of the Income Tax Assessment Act 1936 (Cth) – whether tax shortfall caused by failure of the taxpayer or his or her registered tax agent to take reasonable care – statutory construction of ss 226G and 226K – whether if a taxpayer adopts a reasonably arguable position for the purposes of s 226K they should be accepted as having taken reasonable care. INCOME TAX – penalty imposed in relevant tax income years under s 226G of the Income Tax Assessment Act 1936 (Cth) – whether additional penalty tax should be remitted in whole or in part under s 227(3) – factors relevant to the exercise of the discretion in s 227(3) – whether the penalty would be harsh having regard to the particular circumstances of the taxpayer – that the taxpayer's position conformed with a decision of a Federal Court judge was irrelevant – relevance of the imposition of the general interest charge under Pt IIA, Div 1 of the Taxation Administration Act 1953 (Cth). ADMINISTRATIVE LAW – whether error of law by the Administrative Appeals Tribunal in construction of ss 226G and 226K of the Income Tax Assessment Act 1936 (Cth) – whether error of law by the Administrative Appeals Tribunal in exercise of the discretion in s 227(3).