i 4 } je an 4A A226 | | THOMAS & ROSS LYD. ¥ COMMISSIONER OF TAKSTION, L SUD GENT 5 HIGGINS J. Two appeals from d@cisicns of a Board of Review. Both ap,eals = one as to the year ending 30th, June 1920, the other as to the year ending 30th, June 1921 - invo!ve the same point of law, and, by conseyt, have been beard together. The appeals are made under sec. 51(6) of the Income Tax 'jsseasment Act 1922-27, tn the original notice of a,peal to this Court, the Yoard mt was made the respondent, This wae clearly wrong; but, by consenfort counsel for the aypellant, and of counsel acting for the Commissioner as well as for the Board, the Commissioner has been substituted far @s respondent. Ly notice of amended assesement dated 3gth July 1926, the Com- emiseioner had aded £560 as for "ad itional tax,omitted income" to the original assessment for the year ended 3%th. June 1920; and by notice of anended asseesment of the same date the Commissioner had added £500 aes for the same reason to the original assessment for the year ended 30th, June 1921, The taxpayer - geompany - lodged an objection against both additions "on the ground that the income alle ~eged was not earned. by the company", On 2th. December 1927 the Commissioner notified the company that he had disallowed the objection; at the request of the company the decision of the Commissioner was 50(4) referred to a Booed of Neview tor review (sec./gigigy); on Zlst sep- stember 1928 the Loard dismissed the "appeal" (sic) from the Com- missioner. The company did not state as one of its grounds of objec- Deluvered ab. ll {929 THOMAS & ROGS VV COMMISSIONER OF TAXN. HIGGINS J. -tion that the additions were made more than three yeats from the date when the tax payable on the assessments was originally due and payable ¢see secs, 2 & 37 of the Act 1922-25; secs. 2 & 37 of Act 1922-27); and, in my opinion, the taxpayer was 'precluded from mak- -ing use of this ground of objection before the Board of Review. For sec. 51(2) says expressly that "a taxpayer shall be limited on the review to the grounds stated in his objection". But the appellant contends further that the Board,in consider- +ing the objection taken, took up a mistaken attitude as to the bur- «den of pro§f - that it upre treated the appellant as having to satise «fy the Board that the addition to the assessment was wrong - that the independently Board ought to have addressed its mind AdcSSc. to the question, was the alleged income earned. The Board was meant to be an administra- «tive body, for practical business decisions,sfxthe having all the a body whose powers of the Commissioner, Ang whens decisions are to be deeméd to is urged, it be dedisions of the Commissioner (sec.44); and it pught to make up ' as its own mind/to the facts independently of the Commissioner, The ease of Coghlan V_ Cumberland (1896 1 Ch. 704) has been cited. That case was an appeal under the Judicature Act and rules froma single judge without a jury; and the words of Lindley M.R. show that it is the duty of the Court of Appeal to rehear the case, to re- -consider the mderials before thé judge with such other materials as it may decide to admit to mk meke up its own mind independently. ' THOMAS & ROSS V_ COMMISSIONER OF TAXN. HIGGhiS J. But here the Commissioner relies on sec. 39 of the Act - "The pro- "eduction of any notice of assessment or of any document under the "hand of the Commissioner...... purporting to be a copy of a notice " of assessment shall (a) be conclusive evidence of the due making of the assess- «ment; and . (b) be conclusive evidence that the amount and all the par- -ticulars of the assessment are correct; except in pro- sccedings on appeal against the assessment when it shall be prima fecie evidence only. » Counsel for the appellant rejoins that a reference of the Commission- er's decision to a Board of Review is not an appeal 'at all, and that the words as to the assessment being prima facie evidence are there= fore inapplicable, But if the refegence to the Board is not an against the assessment, "appeal"/ then the notice of assessment is conclusive, impregnable, as to the amount and all particulars of the assessment being correct. The exceptiong is in favour of the tagpayer; and if the taxyayer does not come within the exception, #e ts bound conclusively by the ass- sessment; and what is then the use of the Soard of Review coming after the Commissioner if it has to treat his sssessment as con- ~clusive ? *his section 39 has come down to us from the original Act of 1915, practically unchanged (sec. 35). ¢t appleéd first to assess- amantsa befare there were/ anv Rnarda of Appeal orige-ealled) boards 4e THO AS & ROSS V_ COMR, OF TAXN. HIGGINS J of review - when the only appeal was to some Court, It was retained by the legislature after the cataclysm when itxmaxxdisenwered the extraordinary discovery was made that boards of appeal crented under Sa several the Act of 1921 were an infringement of the/judiciary sections of the Constitution. We must treat these words "proceedings on appeal against avsesement" , as nakng having some distinctive effect; and the only way in which they can get such an efféct is by treating the words as applying to all proceedings in which the as.essment tmx is called in question, whether by way of review mr (as the proceeding is now called), or by way of appeal, as the procedure used to be called, At all events, I shall assume, in favour of the company, that the amended assessment is only prima facie evidence against it; and that such evidence can be rebutted. "ut if it is prima facie evidence, that means that the burden of showing that the alleged income wo barned fatiyxix fall& on the company, "he words used by the Board are that it was not satisfied "that the amended assessment was excessive", Vrobably, the word "excessive" is tgken from the : present section 36, and that section may not be strietly applicable to this case, But even if so, the error is not fatal to the decision of the Board, as, in effect, the assésauent would be "excessive" if no aduitional income had been earned. The only function of the Court, under the circumstances, is under sec. 51(6), to hear and decide the ajpeal from the decision of the Board. if. in the opinion/of the Court. it "involvea a queatian in 50 T™OMAS & ROSS V COMR, OF TAXN, HIGGINS J. of law." In my opinion, the decision of the Board does m involve a question of law ~ the question being whether the cnus of proof lies on the taxpayer when a decision of the Yommissioner comes before a Board of Re- «view. The Board has frankly and expressly shown that it thinka the onus does so lie; and its attitude on this question directly affemts the meni¢ decision of the Board on the alleged additional income earned. 1 think th that the Board was right on the point, I am told that if 1 decided that the Board was wrong on this point, I should have to investigate the facts as to the alleged income myself (there has been no argument on the sub- nor has the evidence been even mentioned/ l lind. ~ject{, and find whether it was in fact earned vy the company; , the juég- ment of the majority in the recent case of the Ruhamah Froperty Co. Ltd. Y__Commissioner of Taxation (not yet reported) would seem to favour that procedure, But, whether such would be my proper course or not, I have no alternative, when I find that the Board was right on the question of law, but to dismiss this appeal from the Board, The case has been closely and ably argued, but I decide that the decision of the Bard on the point of law involved was right, and that the eppeal from the Board should be dismissed. Probably I should add that I offered to give the parties the oppor= -tunity of obtaining the opinion of the "ull Yourt on such a subject, ase ~suming that the Judiciary Act sec,18 applies; but the parties have doth + preferred that I should decide the matter, without prejudice to any such appeal from my decision as may be open to them,