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TAXATION LAWS AMENDMENT ACT (No. 4) 1986 No. 154 of 1986 - SECT 44

44. After section 221YH of the Principal Act the following Subdivision is
inserted in Division 3 of Part VI:
               "Subdivision B-Provisional Tax Avoidance Schemes
Interpretation

"221YHAAA. (1) In this Subdivision-
'arrangement' means-

   (a)  any agreement, arrangement, understanding, promise or undertaking,
        whether express or implied, and whether or not enforceable, or
        intended to be enforceable, by legal proceedings; and

   (b)  any scheme, plan, proposal, action, course of action or course of
        conduct, whether unilateral or otherwise;
'associate', in relation to a person (in this definition referred to as the
'family member'), means-

   (a)  a relative of the family member;

   (b)  (except for the purposes of the definition of 'family partnership') a
        partner of the family member;

   (c)  (except for the purposes of the definition of 'family partnership') if
        a person who is an associate of the family member by virtue of
        paragraph (b) is a natural person-the spouse or a child of that
        natural person;

   (d)  a partnership in which the family member is a partner or in which
        another person who is an associate of the family member by virtue of
        another paragraph of this definition is a partner;

   (e)  a trustee of a trust estate where the family member or another person
        who is an associate of the family member by virtue of another
        paragraph of this definition benefits or is capable (whether by the
        exercise of a power of appointment or otherwise) of benefiting under
        the trust, either directly or through any interposed companies,
        partnerships or trusts; or

   (f)  a company where-

        (i)    the company is, or its directors are, accustomed or under an
               obligation, whether formal or informal, to act in accordance
               with the directions, instructions or wishes of the family
               member, of another person who is an associate of the family
               member by virtue of another paragraph of this definition, of a
               company that is an associate of the family member by virtue of
               another application of this sub-paragraph or of any 2 or more
               such persons; or

        (ii)   the family member is, the persons who are associates of the
               family member by virtue of sub-paragraph (i) and the preceding
               paragraphs of this definition are, or the family member and the
               persons who are associates of the family member by virtue of
               that sub-paragraph and those paragraphs are, in a position to
               cast, or control the casting of, more than 50% of the maximum
               number of votes that might be cast at a general meeting of the
               company;
'family partnership', in relation to a taxpayer, in relation to a year of
income, means a partnership where the taxpayer and at least one associate of
the taxpayer are partners in the partnership and the factor calculated in
accordance with the formula A, where-
---
B
A is the sum of the individual interests of partners in the partnership,
being-

   (a)  the taxpayer; and

   (b)  associates of the taxpayer,
in the net income, or the partnership loss, of the partnership of the year of
income; and
B is the net income, or the partnership loss, as the case may be, of the
partnership of the year of income,
exceeds 0.5;
'family partnership income', in relation to a family partnership of a
taxpayer, in relation to a year of income, means the amount included in the
assessable income of the taxpayer of the year of income under sub-section 92
(1) in respect of the net income of the partnership;
'family partnership loss', in relation to a family partnership of a taxpayer,
in relation to a year of income, means the amount of the deduction allowable
to the taxpayer under sub-section 92 (2) in the year of income in respect of
the partnership loss of the partnership;
'family trust', in relation to a person (in this definition referred to as the
'family member'), in relation to a year of income, means-

   (a)  a trust estate where the family member and at least one associate of
        the family member benefits, or is capable (whether by the exercise of
        a power of appointment or otherwise) of benefiting, at any time during
        the year of income, under the trust and, in a case where there is a
        net income of the trust estate of the year of income, the factor
        calculated in accordance with the formula A, where-
---
B
A is the sum of the shares of the net income of the trust estate of the year
of income-

        (i)    included, under section 97, 98A or 100, in the assessable
               income of a beneficiary, or assessable incomes of
               beneficiaries, of the trust estate, being-

                (A)  the family member; or

                (B)  associates of the family member; or

        (ii)   not being shares to which sub-paragraph (i) applies-in respect
               of which the trustee of the trust estate is liable to be
               assessed under section 98 in relation to beneficiaries of the
               trust estate, being-

                (A)  the family member; or

                (B)  associates of the family member; and
B is the net income of the trust estate of the year of income,
exceeds 0.5; or

   (b)  a trust estate where-

        (i)    the family member benefits, or is capable (whether by the
               exercise of a power of appointment or otherwise) of benefiting,
               at any time during the year of income, under the trust;

        (ii)   if there is a net income of the trust estate of the year of
               income-the factor calculated in accordance with the formula A,
               where-
---
B
A is the share of the net income of the trust estate of the year of income
included, under section 97, 98A or 100, in the assessable income of the family
member or, not being such a share, in respect of which the trustee of the
trust estate is liable to be assessed under section 98 in relation to the
family member; and
B is the sum of the shares of the net income of the trust estate of the year
of income-

                (A)  included, under section 97, 98A or 100, in the assessable
                     income of the beneficiary, or assessable incomes of
                     beneficiaries, of the trust estate; or

                (B)  not being shares to which sub-sub-paragraph (A)
                     applies-in respect of which the trustee of the trust
                     estate is liable to be assessed under section 98 in
                     relation to the beneficiary, or the beneficiaries, of the
                     trust estate,
exceeds 0.5; and

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

                (A)  the trustee of the trust estate is, or the trustees of
                     the trust estate are, accustomed or under an obligation,
                     whether formal or informal, to act in accordance with the
                     directions, instructions or wishes of the family member,
                     of an associate of the family member or of any 2 or more
                     of such persons;

                (B)  the family member, an associate of the family member, or
                     any 2 or more such persons, may remove or appoint the
                     trustee, or any of the trustees, of the trust estate;
'family trust income', in relation to a family trust of a taxpayer, in
relation to a year of income, means the amount included in the assessable
income of the taxpayer of the year of income under section 97, 98A or 100 in
respect of the trust.

"(2) For the purpose only of determining whether a person is an associate of
another person within the meaning of this Subdivision, the definition of
'relative' in sub-section 6 (1) and the definition of 'associate' in
sub-section (1) of this section apply as if a reference in the definition
concerned to the spouse of a person included a reference to another person
who, although not legally married to the person, lives with the person on a
bona fide domestic basis as the husband or wife of the person.

"(3) A reference in this Subdivision to the carrying out of an arrangement by
a person includes a reference to the carrying out of an arrangement by a
person together with another person or other persons.

"(4) A reference in this Subdivision to an arrangement or a part of an
arrangement being entered into or carried out by a person for a particular
purpose shall be read as including a reference to the arrangement or the part
of the arrangement being entered into or carried out by the person for 2 or
more purposes of which that particular purpose is the dominant purpose.

"(5) A reference in this Subdivision to the net income of a partnership or the
net income of a trust estate of a year of income shall, if by virtue of Part
IIIA, the net income of the partnership or the trust estate of that year of
income included a net capital gain within the meaning of that Part, be taken
to be the amount that would have been that net income if that net capital gain
had not been so included.

"(6) A reference in this Subdivision to the partnership loss of a partnership
for a year of income shall, if by virtue of Part IIIA, a net capital gain
within the meaning of that Part was taken into account in calculating that
partnership loss, be taken to be the amount that would have been that
partnership loss if that net capital gain had not been so taken into account.
Additional estimates and information required to be set out in statement
estimating taxable income

"221YHAAB. Without limiting the generality of the information required to be
set out in a statement furnished under sub-section 221YDA (1), where a
taxpayer furnishes a statement under that sub-section setting out the
estimated taxable income of the taxpayer for a year of income (in this section
referred to as the 'current year of income'), the statement shall also
include-

   (a)  in a case where-

        (i)    the taxpayer is not a taxpayer in the capacity of a trustee;

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

                (A)  the taxable income of the taxpayer of the last preceding
                     year of income consisted of, or included, family
                     partnership income in relation to a partnership that was
                     a family partnership of the taxpayer in relation to the
                     last preceding year of income or family trust income in
                     relation to a trust estate that was a family trust of the
                     taxpayer in relation to the last preceding year of
                     income;

                (B)  there was a family partnership loss of the taxpayer in
                     the last preceding year of income in relation to a
                     partnership that was a family partnership of the taxpayer
                     in relation to the last preceding year of income; and

        (iii)  the partnership or trust estate, as the case may be, is, or
               might reasonably be expected to be, a family partnership or
               family trust, as the case may be, of the taxpayer in relation
               to the current year of income,
an estimate, in respect of the partnership or trust estate, of the family
partnership income or the family partnership loss, or the family trust income,
as the case may be, of the taxpayer for the current year of income; and

   (b)  in any case-such other information, estimates and explanations in
        connection with the application of this Subdivision as is specified in
        the form in which the statement is required to be furnished.
        Provisional tax avoidance schemes relating to taxpayers other than
        taxpayers in the capacity of trustees

"221YHAAC. (1) Subject to sub-section (3), where-

   (a)  a taxpayer other than a taxpayer in the capacity of a trustee
        furnishes a statement under sub-section 221YDA (1) setting out the
        estimated taxable income of the taxpayer for a year of income (in this
        sub-section referred to as the 'current year of income');

   (b)  the Commissioner is satisfied that there is, or might reasonably be
        expected to be, a family partnership or family trust of the taxpayer
        in relation to the current year of income; and

   (c)  the Commissioner serves on the taxpayer a notice in writing stating
        that the Commissioner is of the opinion that-

        (i)    the taxpayer has obtained or, but for this sub-section, would
               obtain, a provisional tax benefit, of an amount specified in
               the notice, in connection with an arrangement in respect of the
               partnership or trust estate in relation to the current year of
               income, being an arrangement entered into or carried out before
               or after the commencement of this section; and

        (ii)   having regard to-

                (A)  the manner in which the arrangement was entered into or
                     carried out;

                (B)  the form and substance of the arrangement;

                (C)  the time at which the arrangement was entered into and
                     the length of the period during which the arrangement was
                     carried out;

                (D)  the result in relation to the operation of this Division
                     that, but for this sub-section, would be achieved by the
                     arrangement;

                (E)  any change in the financial position of the taxpayer that
                     has resulted, will result, or may reasonably be expected
                     to result, from the arrangement;

                (F)  any change in the financial position of any person who
                     has, or has had, any connection (whether of a business,
                     family or other nature) with the taxpayer, being a change
                     that has resulted, will result, or might reasonably be
                     expected to result, from the arrangement;

                (G)  any other consequence for the taxpayer, or for any person
                     referred to in sub-sub-paragraph (F), of the arrangement
                     having been entered into or carried out; and

                (H)  the nature of any connection (whether of a business,
                     family or other nature) between the taxpayer and any
                     person referred to in sub-sub-paragraph (F),
it would be concluded that the person, or one of the persons, who entered into
or carried out the arrangement or any part of the arrangement did so for the
purpose of enabling the taxpayer to obtain a provisional tax benefit in
connection with the arrangement or of enabling the taxpayer and another
taxpayer or other taxpayers each to obtain a provisional tax benefit in
connection with the arrangement (whether or not that person who entered into
or carried out the arrangement or any part of the arrangement is the taxpayer
or is the other taxpayer or one of the other taxpayers), the estimated taxable
income of the taxpayer of the current year of income shall be deemed to have
been increased by the amount of the provisional tax benefit specified in the
notice.

"(2) A reference in sub-section (1) to the obtaining by a taxpayer of a
provisional tax benefit in connection with an arrangement in respect of a
partnership or trust estate (in this sub-section referred to as the 'scheme
partnership' or the 'scheme trust estate', as the case requires) in relation
to a year of income (in this sub-section referred to as the 'current year of
income') is a reference to all of the following paragraphs being satisfied:

   (a)  either of the following sub-paragraphs applying:

        (i)    an amount not being included under sub-section 92 (1) or under
               section 97, 98A or 100, as the case requires, in the assessable
               income of the taxpayer of the current year of income in respect
               of the net income of the scheme partnership or of the net
               income of the scheme trust estate, as the case may be, where
               that amount would have been so included or might reasonably be
               expected to have been so included, in the assessable income of
               the taxpayer of the current year of income if the arrangement
               had not been entered into or carried out;

        (ii)   a deduction being allowable under sub-section 92 (2) to the
               taxpayer in relation to the current year of income in respect
               of the partnership loss of the scheme partnership where an
               amount, being the whole or a part of the deduction, would not
               have been allowable, or might reasonably be expected not to
               have been allowable, to the taxpayer in relation to the current
               year of income if the arrangement had not been entered into or
               carried out;

   (b)  any one or more of the following sub-paragraphs applying:

        (i)    another amount, or other amounts, being included, or being
               reasonably likely to be included, under sub-section 92 (1) or
               section 97, 98A or 100, in the assessable income of the
               taxpayer of any other year or years of income (including a year
               of income ending before the commencement of this section) in
               respect of the net income of a partnership or trust estate that
               is a family partnership or a family trust, as the case may be,
               of the taxpayer in relation to that other year or other years
               of income where that amount or those amounts would not have
               been so included, or might reasonably be expected not to have
               been so included, in the assessable income of the taxpayer of
               that other year of income or those other years of income if the
               arrangement had not been entered into or carried out;

        (ii)   another amount, or other amounts, being, or being reasonably
               likely to be, assessable under section 98 in any other year or
               years of income in respect of a share of the taxpayer of the
               net income of a trust estate that is a family trust of the
               taxpayer in relation to that other year or other years of
               income (including a year of income ending before the
               commencement of this section) where that amount or those
               amounts would not have been so assessable, or might reasonably
               be expected not to have been so assessable, in that other year
               of income or those other years of income if the arrangement had
               not been entered into or carried out;

        (iii)  another amount, or other amounts, not being allowable under
               sub-section 92 (2) to the taxpayer as a deduction or deductions
               in relation to any other year or years of income (including a
               year of income ending before the commencement of this section)
               in respect of the partnership loss of a partnership that is a
               family partnership of the taxpayer in relation to that other
               year or other years of income where that amount or those
               amounts would have been so allowable or might reasonably be
               expected to have been so allowable, to the taxpayer in that
               other year of income or those other years of income if the
               arrangement had not been entered into or carried out;

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

        (i)    provisional tax not being payable by the taxpayer in respect of
               the current year of income where that provisional tax would
               have been, or might reasonably be expected to have been,
               payable by the taxpayer if the arrangement had not been entered
               into or carried out;

        (ii)   the amount of provisional tax payable by the taxpayer in
               respect of the current year of income being less than the
               amount that would have been, or might reasonably be expected to
               have been, payable by the taxpayer if the arrangement had not
               been entered into or carried out, and, for the purposes of
               sub-section (1), the amount of the provisional tax benefit
               shall be taken to be-

   (d)  in a case to which paragraph (e) does not apply-the amount referred to
        in whichever of sub-paragraphs (a) (i) and (ii) is applicable; or

   (e)  where the scheme partnership or scheme trust estate was a family
        partnership, or a family trust, as the case may be, of the taxpayer in
        relation to the last preceding year of income-

        (i)    where sub-paragraph (a) (i) applies in relation to the scheme
               partnership or scheme trust estate, the taxable income of the
               taxpayer of the last preceding year of income consisted of, or
               included, family partnership income in relation to the scheme
               partnership or family trust income in relation to the scheme
               trust estate and, in the case of a scheme partnership, the
               taxpayer furnished an estimate of the family partnership income
               of the taxpayer in relation to the scheme partnership for the
               current year of income-

                (A)  the amount calculated in accordance with the formula
                     1.11A - B, where-
A is the amount of the family partnership income of the taxpayer in relation
to the scheme partnership, or the amount of the family trust income of the
taxpayer in relation to the scheme trust estate, as the case may be, in
relation to the last preceding year of income; and
B is the amount of the estimate furnished by the taxpayer of the family
partnership income of the taxpayer in relation to the scheme partnership, or
of the family trust income of the taxpayer in relation to the scheme trust
estate, as the case may be, for the current year of income; or

                (B)  the amount referred to in sub-paragraph (a) (i),
whichever is the greater;

        (ii)   where sub-paragraph (a) (ii) applies in relation to the scheme
               partnership, there was a family partnership loss of the
               taxpayer in relation to the scheme partnership for the last
               preceding year of income and the taxpayer furnished an estimate
               of the family partnership loss of the taxpayer in relation to
               the scheme partnership for the current year of income-

                (A)  an amount calculated in accordance with the formula
                     A-1.11B where-
A is the amount of the estimate furnished by the taxpayer of the family
partnership loss of the taxpayer in relation to the scheme partnership for the
current year of income; and
B is the amount of the family partnership loss of the taxpayer in relation to
the scheme partnership in relation to the last preceding year of income; or

                (B)  the amount referred to in sub-paragraph (a) (ii),
whichever is the greater; or

        (iii)  where sub-paragraph (a) (ii) applies in relation to the scheme
               partnership, the taxable income of the taxpayer of the last
               preceding year of income consisted of, or included, family
               partnership income in relation to the scheme partnership and
               the taxpayer furnished an estimate of the family partnership
               loss of the taxpayer in relation to the scheme partnership for
               the current year of income-

                (A)  the amount calculated in accordance with the formula
                     1.11A + B, where-
A is the amount of the family partnership income of the taxpayer in relation
to the scheme partnership in relation to the last preceding year of income;
and
B is the amount of the estimate furnished by the taxpayer of the family
partnership loss of the taxpayer in relation to the scheme partnership for the
current year of income; or

                (B)  the amount referred to in sub-paragraph (a) (ii),
whichever is the greater.

"(3) The amount of the estimated taxable income of a taxpayer of a year of
income shall not be increased, by virtue of an application, or applications,
of sub-section (1), to an amount that would, by virtue of sub-section 221YDA
(2) or (4), result in the amount of provisional tax payable by the taxpayer in
respect of the year of income exceeding the amount that would, but for section
221YDA, be the amount of provisional tax payable by the taxpayer in respect of
the year of income.

"(4) For the purposes of this Division, the Commissioner may treat an amount
by which the estimated taxable income of a taxpayer is increased by virtue of
an application, or applications, of sub-section (1) as being attributable to
income of a particular kind to such extent as the Commissioner considers
reasonable. Provisional tax avoidance schemes relating to trustees liable to
be assessed under section 98

"221YHAAD. (1) Subject to sub-section (3), where-

   (a)  a taxpayer in the capacity of a trustee of a trust estate who is
        liable to be assessed under section 98 in respect of a share of the
        net income of the trust estate of a year of income (in this
        sub-section referred to as the 'current year of income') to which a
        beneficiary is presently entitled furnishes a statement under
        sub-section 221YDA (1) setting out the estimated taxable income of the
        taxpayer;

   (b)  the Commissioner is satisfied that the trust estate is, or might
        reasonably be expected to be, a family trust in relation to the
        beneficiary in relation to the current year of income; and

   (c)  the Commissioner serves on the taxpayer a notice in writing stating
        that the Commissioner is of the opinion that-

        (i)    the taxpayer has obtained or, but for this sub-section, would
               obtain, a provisional tax benefit, of an amount specified in
               the notice, in connection with an arrangement in respect of the
               trust estate in relation to the current year of income in
               relation to the beneficiary, being an arrangement entered into
               or carried out before or after the commencement of this
               section; and

        (ii)   having regard to-

                (A)  the manner in which the arrangement was entered into or
                     carried out;

                (B)  the form and substance of the arrangement;

                (C)  the time at which the arrangement was entered into and
                     the length of the period during which the arrangement was
                     carried out;

                (D)  the result in relation to the operation of this Division
                     that, but for this sub-section, would be achieved by the
                     arrangement;

                (E)  any change in the financial position of the taxpayer that
                     has resulted, will result, or may reasonably be expected
                     to result, from the arrangement;

                (F)  any change in the financial position of any person who
                     has, or has had, any connection (whether of a business,
                     family or other nature) with the taxpayer, being a change
                     that has resulted, will result, or may reasonably be
                     expected to result, from the arrangement;

                (G)  any other consequence for the taxpayer, or for any person
                     referred to in sub-sub-paragraph (F), of the arrangement
                     having been entered into or carried out; and

                (H)  the nature of any connection (whether of a business,
                     family or other nature) between the taxpayer and any
                     person referred to in sub-sub-paragraph (F),
it would be concluded that the person, or one of the persons, who entered into
or carried out the arrangement or any part of the arrangement did so for the
purpose of enabling the taxpayer to obtain a provisional tax benefit in
connection with the arrangement or of enabling the taxpayer and another
taxpayer or other taxpayers each to obtain a provisional tax benefit in
connection with the arrangement (whether or not that person who entered into
or carried out the arrangement or any part of the arrangement is the taxpayer
or is the other taxpayer or one of the other taxpayers), the estimated taxable
income of the taxpayer of the current year of income shall be deemed to have
been increased by the amount of the provisional tax benefit specified in the
notice.

"(2) A reference in sub-section (1) to the obtaining by a taxpayer of a
provisional tax benefit in connection with an arrangement in respect of a
trust estate (in this sub-section referred to as the 'scheme trust estate') in
relation to a year of income (in this sub-section referred to as the 'current
year of income') in relation to a beneficiary is a reference to all of the
following paragraphs being satisfied:

   (a)  an amount not being assessable under section 98 to the taxpayer in the
        current year of income in respect of a share of the beneficiary of the
        net income of the scheme trust estate where that amount would have
        been so assessable or might reasonably be expected to have been so
        assessable to the taxpayer in the current year of income if the
        arrangement had not been entered into or carried out;

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

        (i)    another amount, or other amounts, being assessable, or being
               reasonably likely to be assessable, to the taxpayer or another
               taxpayer under section 98 in any other year or years of income
               (including a year of income ending before the commencement of
               this section) in respect of a share of the beneficiary of the
               net income of a trust estate that is a family trust of the
               beneficiary in relation to that other year or other years of
               income where that amount or those amounts would not have been
               so assessable, or might reasonably be expected not to have been
               so assessable, in that other year of income or those other
               years of income if the arrangement had not been entered into or
               carried out;

        (ii)   another amount, or other amounts, being included, or being
               reasonably likely to be included, under sub-section 92 (1) or
               section 97, 98A or 100, in the assessable income of the
               beneficiary of any other year or years of income (including a
               year of income ending before the commencement of this section)
               in respect of the net income of a partnership or trust estate
               that is a family partnership or family trust, as the case may
               be, of the beneficiary in relation to that other year or other
               years of income, where that amount or those amounts would not
               have been so included, or might reasonably be expected not to
               have been so included, in the assessable income of the
               beneficiary of that other year of income or those other years
               of income if the arrangement had not been entered into or
               carried out;

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

        (i)    provisional tax not being payable by the taxpayer in respect of
               the current year of income where that provisional tax would
               have been, or might reasonably be expected to have been,
               payable by the taxpayer if the arrangement had not been entered
               into or carried out;

        (ii)   the amount of provisional tax payable by the taxpayer in
               respect of the current year of income being less than the
               amount that would have been, or might reasonably be expected to
               have been, payable by the taxpayer if the arrangement had not
               been entered into or carried out, and, for the purposes of
               sub-section (1), the amount of the provisional tax benefit
               shall be taken to be-

   (d)  in a case to which paragraph (e) does not apply-the amount referred to
        in paragraph (a); or

   (e)  where-

        (i)    the scheme trust estate was a family trust of the beneficiary
               in relation to the last preceding year of income; and

        (ii)   a taxpayer in the capacity of a trustee of the scheme trust
               estate was liable to be assessed under section 98 in respect of
               the beneficiary's share of the net income of the scheme trust
               estate of the last preceding year of income,
whichever of the following amounts is the greater:

        (iii)  the amount calculated in accordance with the formula 1.11A - B,
               where-
A is the amount that was so assessable in respect of that share; and
B is the amount of the estimated taxable income of the taxpayer for the
current year of income;

        (iv)   the amount referred to in paragraph (a).

"(3) The amount of the estimated taxable income of a taxpayer of a year of
income shall not be increased, by virtue of an application, or applications,
of sub-section (1), to an amount that would, by virtue of sub-section 221YDA
(2) or (4), result in the amount of provisional tax payable by the taxpayer in
respect of the year of income exceeding the amount that would, but for section
221YDA, be the amount of provisional tax payable by the taxpayer in respect of
the year of income.

"(4) For the purposes of this Division, the Commissioner may treat an amount
by which the estimated taxable income of a taxpayer is increased by virtue of
an application, or applications, of sub-section (1) as being attributable to
income of a particular kind to such extent as the Commissioner considers
reasonable.

"(5) A reference in this section to the estimated taxable income of a taxpayer
who is liable to be assessed under section 98 in respect of a share of the net
income of a trust estate shall be read as a reference to that share. Review of
decisions

"221YHAAE. (1) A taxpayer dissatisfied with a notice served on the taxpayer
under paragraph 221YHAAC (1) (c) or 221YHAAD (1) (c) may, within 60 days after
service of the notice, lodge with the Commissioner an objection in writing
against the notice stating fully and in detail the grounds on which the
taxpayer relies.

"(2) The provisions of Division 2 of Part V (other than section 185) apply in
relation to an objection made under sub-section (1) in the same manner as
those provisions apply in relation to an objection against an assessment.

"(3) The fact that an appeal or review relating to an objection under
sub-section (1) is pending does not affect the operation of a notice referred
to in that sub-section, and provisional tax and additional tax under section
207 may be recovered as if no such review or appeal were pending.

"(4) Where, by reason of a decision of the Commissioner, of the Tribunal or of
a court in relation to an objection made under sub-section (1), a person's
liability to provisional tax is reduced-

   (a)  the amount by which the provisional tax is so reduced shall be taken,
        for the purposes of section 207, never to have been payable; and

   (b)  the Commissioner shall-

        (i)    refund the amount of any provisional tax overpaid; or

        (ii)   apply the amount of any provisional tax overpaid against any
               liability of the person to the Commonwealth, being a liability
               arising under, or by virtue of, an Act of which the
               Commissioner has the general administration, and refund any
               part of the amount not so applied.". 


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