The Full Federal Court held firstly that her Honour was in error in concluding that special circumstances were necessary for a remission of the penalty (see para 21 of the Court's judgment). The Full Federal Court then held that the matter should have been remitted to the AAT for determination in accordance with law (that is, without taking into account the irrelevant considerations). The Court said, at para 26:
"The ultimate conclusion of the primary judge on the relevant question of law raised by the appeal was correct. However, it is by no means clear that her Honour correctly construed the Tribunal’s reasoning. There was no basis for her Honour, in effect, to substitute her own decision on the matter under review by the Tribunal. The matter should have been remitted to the Tribunal for consideration of the question of whether any part of the penalty should be remitted on the basis that the outcome is harsh, having regard to the particular circumstances of the Taxpayer."
Archibald Dixon as Trustee for the Dixon Holdsworth Superannuation Fund v Commissioner of Taxation  FCAFC 54 (Full Federal Court; Spender, Ryan and Emmett JJ; 8 April 2008).
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