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21 Jun 06 Penalties for incorrect BAS returns affirmed - Tenvoc Properties

The AAT has affirmed the imposition of penalties on a taxpayer, a property development company, which failed to include sales of property made by it in 3 business activity statements (BAS). The penalty was imposed pursuant to Division 284 of Schedule 1 of the Taxation Administration Act 1953 ("the TAA") and on the alleged basis that the tax shortfall resulted from recklessness by the taxpayer or its agent as to the operation of the taxation law. The BAS were prepared by bookkeepers employed by the taxpayer, but signed by the managing director of the taxpayer. The AAT said, at para 44:

"The Tribunal is satisfied as earlier discussed that the [taxpayer] by Mr Cormack [its managing director] was reckless and grossly careless in regard to the conduct of its taxation affairs. It showed an indifference to and a disregard of the consequences of its conduct referrable to its taxation position. The conduct of the Applicant with reference to answers given to the tax auditors and tardiness with reference to compliance with a section 65 notice are also here relevant. No remission should be granted."

Tenvoc Properties Pty Ltd and FCT [2006] AATA 529 (AAT, Purvis DP, 20 June 2006).

For a copy of the decision, go here

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