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The Full Federal Court (Lindgren, Emmett and Edmonds JJ) has held that the taxpayer was not entitled to an order that an amended assessment (which contained both an assessment of primary tax and an assessment of additional tax) was to be set aside in its entirety, even if, as argued by the taxpayer but not admitted by the Commissioner, the Commissioner's remission decision in relation to the additional tax was invalid. The taxpayer did not seek an alternative order that the assessment of additional tax be set aside for invalidity.

Lindgren and Edmonds JJ said, at para 28:

"(1)...Notwithstanding its title, the notice of amended assessment was a notice of the amended assessment of taxable income and the primary tax payable thereon, and of the assessment of additional tax. There is no occasion for saying that because the notice incorporated the assessment of additional tax, invalidity of the latter assessment invalidated the entire assessment process, including the issue of the notice of the amended assessment of the primary tax.

(2)...the most that can be said is that invalidity of the remission decision because of bad faith would bring down the assessment of the additional tax and the notice of that assessment. There would be no effect on the amended assessment of the primary tax or on the ‘notice of amended assessment’ in so far as it was a notice of that amended assessment.

(3) The appellant fails in the only attack that he makes: an attack on the notice in its entirety."

Bonnell v FCT [2008] FCAFC 146 (Full Federal Court; Lindgren, Emmett and Edmonds JJ; 18 August 2008).  

For a copy of the decision, go here

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