Commonwealth Numbered Acts

TAXATION LAWS AMENDMENT ACT 1984No. 123, 1984 - SECT 152

152. Part VII of the Principal Act is repealed and the following Part is
substituted:
                            "PART VII - PENALTY TAX
Penalty for failure to furnish return

"222. (1) Where a taxpayer refuses or fails to furnish, when and as required
under or pursuant to this Act or the regulations to do so, a return, or any
information, relating to a year of income, being a return relating to or
information relating to, or to the affairs of, the taxpayer, the taxpayer is
liable to pay, by way of penalty, additional tax equal to double the amount of
tax payable by the taxpayer in respect of the year of income.

"(2) Where, but for this sub-section, an amount of additional tax, being an
amount less than $20, is payable by a taxpayer under this section in respect
of an act or omission, then, by force of this sub-section, the amount of the
additional tax shall be taken to be $20. Penalty for false or misleading
statements

"223. (1) Where-

   (a)  a taxpayer-

        (i)    makes a statement to a taxation officer, or to a person other
               than a taxation officer for a purpose in connection with the
               operation of this Act or the regulations, that is false or
               misleading in a material particular; or

        (ii)   omits from a statement made to a taxation officer, or to a
               person other than a taxation officer for a purpose in
               connection with the operation of this Act or the regulations,
               any matter or thing without which the statement is misleading
               in a material particular; and

   (b)  the tax properly payable by the taxpayer exceeds the tax that would
        have been payable by the taxpayer if it were assessed on the basis
        that the statement were not false or misleading, as the case may be,
        the taxpayer is liable to pay, by way of penalty, additional tax equal
        to double the amount of the excess.

"(2) Where-

   (a)  a partner in a partnership (in this sub-section referred to as the
        'defaulting partner')-

        (i)    makes a statement to a taxation officer, or to a person other
               than a taxation officer for a purpose in connection with the
               operation of this Act or the regulations, that is false or
               misleading in a material particular; or

        (ii)   omits from a statement made to a taxation officer, or to a
               person other than a taxation officer for a purpose in
               connection with the operation of this Act or the regulations,
               any matter or thing without which the statement is misleading
               in a material particular,
being a statement relating to, or to the affairs of, the partnership; and

   (b)  either or both of the following sub-paragraphs apply:

        (i)    the tax properly payable by the defaulting partner exceeds the
               tax that would have been payable by the defaulting partner if
               it were assessed on the basis that the statement were not false
               or misleading, as the case may be;

        (ii)   the tax properly payable by any other partner in the
               partnership (in this sub-section referred to as the 'other
               partner') exceeds the amount that would have been payable by
               the other partner if it were assessed on the basis that the
               statement were not false or misleading, as the case may be,
               then-

   (c)  in a case to which sub-paragraph (b) (ii) does not apply-the
        defaulting partner is liable to pay, by way of penalty, additional tax
        equal to double the amount of the excess referred to in sub-paragraph
        (b) (i);

   (d)  in a case to which sub-paragraph (b) (i) does not apply-the defaulting
        partner is liable to pay, by way of penalty, additional tax equal to
        double the amount of the excess referred to in sub-paragraph (b) (ii);
        and

   (e)  in a case to which sub-paragraphs (b) (i) and (ii) both apply-the
        defaulting partner is liable to pay, by way of penalty, additional tax
        equal to the sum of-

        (i)    double the amount of the excess referred to in sub-paragraph
               (b) (i); and

        (ii)   double the amount of the excess referred to in sub-paragraph
               (b) (ii).

"(3) Where, but for this sub-section, a person is liable to pay both-

   (a)  an amount of additional tax under sub-section (1) in respect of a
        statement relating to a matter; and

   (b)  an amount of additional tax under sub-section (2) in respect of a
        statement (whether or not the same statement) relating to the same
        matter, the person is liable to pay only whichever of those amounts
        the Commissioner determines.

"(4) Where-

   (a)  a trustee of a trust estate-

        (i)    makes a statement to a taxation officer, or to a person other
               than a taxation officer for a purpose in connection with the
               operation of this Act or the regulations, that is false or
               misleading in a material particular; or

        (ii)   omits from a statement made to a taxation officer, or to a
               person other than a taxation officer for a purpose in
               connection with the operation of this Act or the regulations,
               any matter or thing without which the statement is misleading
               in a material particular,
being a statement relating to, or to the affairs of, the trust estate; and

   (b)  the tax properly payable by a person who is or has been a beneficiary
        of the trust estate exceeds the tax that would have been payable by
        the last-mentioned person if it were assessed on the basis that the
        statement were not false or misleading, as the case may be, the
        trustee is personally liable to pay, by way of penalty, additional tax
        equal to double the amount of the excess.

"(5) Sub-section (4) shall not be taken as implying that a reference in any
other provision of this Part to a taxpayer does not include a reference to a
taxpayer in the capacity of a trustee.

"(6) Where, but for this sub-section, an amount of additional tax, being an
amount less than $20, is payable by a person under this section in respect of
an act or omission, then, by force of this sub-section, the amount of the
additional tax shall be taken to be $20.

"(7) Where a person omits from a return furnished under or pursuant to this
Act or the regulations, being a return of income derived by the person, a
partnership or a trust estate during a period, any assessable income derived
by the person, the partnership or the trust estate, as the case may be, during
the period, the person shall, for the purposes of this section, be taken to
have made a statement in the return to the effect that the person, the
partnership or the trust estate, as the case requires, did not derive the
assessable income during the period.

"(8) A reference in this section to a statement made to a taxation officer is
a reference to a statement made to a taxation officer orally, in writing, in a
data processing device or in any other form and, without limiting the
generality of the foregoing, includes a statement-

   (a)  made in an application, certificate, declaration, notification,
        objection, return or other document made, given or furnished, or
        purporting to be made, given or furnished, under or pursuant to this
        Act or the regulations;

   (b)  made in answer to a question asked of a person under or pursuant to
        this Act or the regulations;

   (c)  made in any information furnished, or purporting to be furnished,
        under or pursuant to this Act or the regulations; or

   (d)  made in a document furnished to a taxation officer otherwise than
        under or pursuant to this Act or the regulations, but does not include
        a statement made in a document produced pursuant to paragraph 264 (1)
        (b).

"(9) A reference in this section to a statement made to a person other than a
taxation officer for a purpose in connection with the operation of this Act or
the regulations is a reference to such a statement made orally, in writing, in
a data processing device or in any other form and, without limiting the
generality of the foregoing, includes such a statement-

   (a)  made in an application, certificate, declaration, notification or
        other document made, given or furnished to the person;

   (b)  made in answer to a question asked by the person; or

   (c)  made in any information furnished to the person.

"(10) In this section-
'data processing device' means any article or material from which information
is capable of being reproduced with or without the aid of any other article or
device;
'taxation officer' means a person exercising powers, or performing functions
under, pursuant to or in relation to this Act or the regulations. Penalty tax
where certain anti-avoidance provisions apply

"224. (1) Where-

   (a)  for the purpose of making an assessment or arising out of the
        consideration of an objection, the Commissioner has calculated the tax
        that is assessable to a taxpayer in relation to a year of income;

   (b)  a step (in this sub-section referred to as the 'relevant step') in the
        calculation of the tax consisted of-

        (i)    an amount being included in the assessable income of the
               taxpayer; or

        (ii)   a deduction or rebate not being allowable, in whole or in part,
               to the taxpayer;

   (c)  the relevant step was dependent on, or involved, any one or more of
        the following, namely:

        (i)    the formation by the Commissioner of, or the refusal or failure
               of the Commissioner to form, an opinion that relates to a tax
               avoidance scheme;

        (ii)   the attainment by the Commissioner of, or the refusal or
               failure by the Commissioner to attain, a state of mind that
               relates to a tax avoidance scheme;

        (iii)  the making by the Commissioner of, or the refusal or failure by
               the Commissioner to make, a determination that relates to a tax
               avoidance scheme;

        (iv)   the exercise by the Commissioner of, or the refusal or failure
               by the Commissioner to exercise, a power to treat a matter or
               thing that relates to a tax avoidance scheme in a particular
               way,
being an opinion, state of mind, determination or power under, or referred to
in, a provision of this Act (other than a provision of Division 13 of Part III
or Part IVA); and

   (d)  either of the following sub-paragraphs apply:

        (i)    in a case to which sub-paragraph (b) (i) applies-the taxpayer
               did not include in the taxpayer's return for the year of income
               or the objection, as the case may be, the amount referred to in
               that sub-paragraph as part of the taxpayer's assessable income;
               or

        (ii)   in a case to which sub-paragraph (b) (ii) applies-the taxpayer
               claimed or included in the taxpayer's return for the year of
               income or the objection, as the case may be, the deduction or
               rebate or the part of the deduction or rebate, as the case may
               be, referred to in that sub-paragraph as, or as part of, an
               allowable deduction or rebate, as the case may be, the taxpayer
               is liable to pay, by way of penalty, additional tax equal to-

   (e)  in a case to which sub-paragraph (b) (i) applies-double the difference
        between the tax properly payable by the taxpayer and the tax that
        would have been payable by the taxpayer if it were assessed on the
        basis that the taxpayer's assessable income were reduced by the amount
        referred to in sub-paragraph (b) (i) or the part of that amount that
        the taxpayer did not include in the taxpayer's return for the year of
        income or the taxpayer's objection, as the case may be, as part of the
        taxpayer's assessable income, as the case may be; or

   (f)  in a case to which sub-paragraph (b) (ii) applies-double the
        difference between the tax properly payable by the taxpayer and the
        tax that would have been payable by the taxpayer if it were assessed
        on the basis that the taxpayer's allowable deductions or rebates, as
        the case may be, were increased by the amount of the deduction or
        rebate or the part of the deduction or rebate, as the case may be,
        referred to in sub-paragraph (b) (ii) that the taxpayer claimed or
        included in the taxpayer's return for the year of income or the
        taxpayer's objection, as the case may be, as, or as part of, an
        allowable deduction or rebate, as the case may be.

"(2) In sub-section (1), 'tax avoidance scheme' means a scheme within the
meaning of Part IVA that was entered into or carried out for the sole or
dominant purpose of enabling a person to pay no tax or less tax. Penalty tax
where Division 13 of Part III applies

"225. (1) Where-

   (a)  for the purpose of making an assessment or arising out of the
        consideration of an objection, the Commissioner has calculated the tax
        that is assessable to a taxpayer in relation to a year of income;

   (b)  in calculating the tax assessable to the taxpayer, a prescribed
        provision was, or prescribed provisions were, applied; and

   (c)  either of the following sub-paragraphs apply:

        (i)    no tax would have been assessable to the taxpayer in relation
               to the year of income if-

                (A)  the prescribed provision or prescribed provisions, as the
                     case may be, had not been applied; and

                (B)  the tax had been assessed on the basis that the
                     particulars contained in the return of the taxpayer for
                     the year of income or in the objection, as the case may
                     be, were correct in so far as they were relevant to the
                     operation of the prescribed provision or prescribed
                     provisions, as the case may be;

        (ii)   the amount of tax (in this sub-section referred to as the
               'amount of claimed tax') that would have been assessable to the
               taxpayer in relation to the year of income if-

                (A)  the prescribed provision or prescribed provisions, as the
                     case may be, had not been applied; and

                (B)  the tax had been assessed on the basis that the
                     particulars contained in the return of the taxpayer for
                     the year of income or the objection, as the case may be,
                     were correct in so far as they were relevant to the
                     operation of the prescribed provision or prescribed
                     provisions, as the case may be,
is less than the amount of tax referred to in paragraph (a), the taxpayer is
liable to pay, by way of penalty-

   (d)  in a case where-

        (i)    the prescribed provision or prescribed provisions, as the case
               may be, were applied in relation to a scheme within the meaning
               of Part IVA; and

        (ii)   the scheme was entered into or carried out for the sole or
               dominant purpose of enabling a person to pay no tax or less
               tax-
additional tax equal to-

        (iii)  in a case to which sub-paragraph (c) (i) applies-double the
               amount of the tax referred to in paragraph (a); or

        (iv)   in a case to which sub-paragraph (c) (ii) applies-double the
               amount by which the amount of the tax referred to in paragraph
               (a) exceeds the amount of claimed tax; or

   (e)  in any other case-additional tax, in respect of the period commencing
        on the last day allowed to the taxpayer for furnishing the taxpayer's
        return of income for the year of income and ending on the day on which
        the assessment is made or a decision is made on the objection, as the
        case may be, at the rate of 25% per annum of-

        (i)    in a case to which sub-paragraph (c) (i) applies-the amount of
               the tax referred to in paragraph (a); or

        (ii)   in a case to which sub-paragraph (c) (ii) applies-the amount by
               which the amount of the tax referred to in paragraph (a)
               exceeds the amount of claimed tax.

"(2) Where-

   (a)  for the purpose of making an assessment or arising out of the
        consideration of an objection, the Commissioner has calculated the tax
        that is assessable to a taxpayer in relation to a year of income; and

   (b)  in calculating the tax assessable to the taxpayer, a prescribed
        provision was not applied in a particular case by reason of the Income
        Tax (International Agreements) Act 1953, the Commissioner shall
        determine the following amounts:

   (c)  the amount (if any) of additional tax that, but for sub-section (3)
        and the Income Tax (International Agreements) Act 1953, the taxpayer
        would have been liable to pay in relation to the year of income under
        sub-section (1);

   (d)  the amount (if any) of additional tax that the taxpayer would have
        been liable to pay in relation to the year of income under sub-section
        (1) if that sub-section were applied on the basis that a reference in
        that sub-section to the application of a prescribed provision included
        a reference to the application of a provision of the Income Tax
        (International Agreements) Act 1953 by reason of the application of
        which a prescribed provision was not applied in a particular case.

"(3) Where the Commissioner has determined an amount or amounts under
sub-section (2) in relation to a taxpayer in relation to a year of income, the
taxpayer is liable to pay, by way of penalty, additional tax in relation to
the year of income equal to that amount or the lesser of those amounts, as the
case may be, and, where the taxpayer is liable to pay additional tax under
this sub-section in relation to the year of income, the taxpayer is not liable
to pay additional tax under sub-section (1) in relation to the year of income.

"(4) In sub-sections (1) and (2), 'prescribed provision' means section 136AD
or 136AE.

"(5) In the application of sub-sections (1) and (2), the possibility that
section 31C, Subdivision C of Division 2 of Part III or Part IVA would have
applied in a particular case in which it did not apply shall be disregarded.
Penalty tax where Part IVA applies

"226. Where-

   (a)  for the purpose of making an assessment or arising out of the
        consideration of an objection, the Commissioner has calculated the tax
        that is assessable to a taxpayer in relation to a year of income;

   (b)  in calculating the tax assessable to the taxpayer, a determination or
        determinations made by the Commissioner under sub-section 177F (1) was
        or were taken into account; and

   (c)  either of the following sub-paragraphs apply:

        (i)    no tax would have been assessable to the taxpayer in relation
               to the year of income if no determination had been made under
               sub-section 177F (1) in relation to the taxpayer in relation to
               the year of income;

        (ii)   the amount of tax (in this section referred to as the 'amount
               of claimed tax') that would, but for this section, have been
               assessable to the taxpayer in relation to the year of income if
               no determination had been made under sub-section 177F (1) in
               relation to the taxpayer in relation to the year of income is
               less than the amount of tax referred to in paragraph (a), the
               taxpayer is liable to pay, by way of penalty, additional tax
               equal to-

   (d)  in a case to which sub-paragraph (c) (i) applies-double the amount of
        the tax referred to in paragraph (a); or

   (e)  in a case to which sub-paragraph (c) (ii) applies-double the amount by
        which the amount of the tax referred to in paragraph (a) exceeds the
        amount of claimed tax. Assessment of additional tax

"227. (1) The Commissioner shall make an assessment of the additional tax
payable by a person under a provision of this Part.

"(2) Nothing in this Act shall be taken to preclude notice of an assessment
made in respect of a person under sub-section (1) from being incorporated in
notice of any other assessment made in respect of the person under this Act.

"(3) The Commissioner may, in the Commissioner's discretion, remit the whole
or any part of the additional tax payable by a person under a provision of
this Part, but, for the purposes of the application of sub-section 33 (1) of
the Acts Interpretation Act 1901 to the power of remission conferred by this
sub-section, nothing in this Act shall be taken to preclude the exercise of
the power at a time before an assessment is made under sub-section (1) of the
additional tax. Return to be incorporated in objection for certain purposes

"228. Where-

   (a)  arising out of the consideration of an objection, the Commissioner has
        calculated the tax that is assessable to a taxpayer in relation to a
        year of income; and

   (b)  the taxpayer furnished a return for the year of income, then, for the
        purposes of the application of paragraphs 224 (1) (d), (e) and (f) and
        225 (1) (c) to a calculation of the kind referred to in paragraph (a)
        of this section-

   (c)  subject to paragraph (d), the return shall be taken to be incorporated
        in, and read as one with, the objection; and

   (d)  if the return is inconsistent with the objection, the objection shall,
        to the extent of the inconsistency, prevail over the return.".