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The court granted the appeal after the Commissioner admitted that a taxpayer objection ought to have been allowed.
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Taxpayer wins appeal against Tax Commissioner in Federal Court
16 July 2024
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The Federal Court of Australia has allowed an appeal against objection decisions by the Commissioner of Taxation concerning a taxpayer's use of imputation benefits from franking distributions.
The appeal applicant Bradley Maguire represented himself in court to appeal against objection decisions issued by the ATO on 31 October 2022.
The objection decisions related to an amended assessment of income tax for the income years ended 30 June 2016, 30 June 2017 and 30 June 2018, which was issued on 1 September 2020.
The amended assessments were based on determinations under s 177EA of the Income Tax Assessment Act 1936 (Cth) which denied the applicant the use of imputation benefits from franking distributions.
During the proceedings, the Federal Court was informed by senior counsel that the Tax Commissioner accepted that the objection by the taxpayer should be allowed in full.
Justice Logan said the Tax Commissioner had likely received advice and come to a settled view in fact and law that the assessments were excessive.
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This meant that Maguire had discharged his onus of proving that the assessments were excessive by demonstrating by admission of fact and law that s 177EA of the Income Tax Assessment Act 1936 (Cth) had no application.
On the first day of trial, the parties jointly promoted orders to the Court to allow the appeal and set aside the Tax Commissioner's objection decisions.
The court issued the following orders:
The appeal be allowed;
- The Respondent’s objection decision be set aside;
- In lieu thereof, it be ordered that the Objections of the Applicant concerned be allowed in full;
- The matter be remitted to the Respondent for the issuing, pursuant to s 14ZZQ of the Taxation Administration Act 1953 (Cth), of such amended assessments as are necessary to give effect to this order; and
- Each party to bear their own costs of the proceeding
Justice Logan said while Maguire may have hoped for an earlier concession from the ATO, by coming to a view that the assessments were excessive, the Tax Commissioner had acted promptly.
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