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02 Mar 2009 Taxpayer unable to object to private ruling because of Commissioner's errors - Investa

In what can only be described as a bizarre outcome, the AAT has held that it lacked jurisdiction to consider a taxpayer's appeal relating to an adverse private ruling request, because the Commissioner had not dealt with the arrangement which the taxpayer raised in the request for a ruling. In particular, the Commissioner had ignored most of the arrangement and ruled on a question that was different from the question asked by the taxpayer. The AAT said, at para 21, as follows:

"In persisting with the wrong question as the only issue for the ruling, the Commissioner has stymied the taxpayer’s efforts to obtain a private binding ruling of any relevance to the scheme identified. However, in my view, the tribunal’s powers do not extend to reframing the only issue arising under the scheme identified in the ruling."

In concluding that it had no jurisdiction, the AAT said, at para 23, as follows:

"As I have no power to restate the scheme for review of the objection decision on the ruling, I cannot proceed to consider the matters argued before me in relation to the reviewable decision, being the decision on the objection made on 16 October 2007. It follows that I must dismiss the application in the hope that the Commissioner will reconsider the actual scheme identified and issue a new ruling on the subject matter of the scheme about which the taxpayer sought a private ruling."

Investa Properties Limited and FCT [2009] AATA 121 (AAT, Hunt SM, 25 February 2009).

For a copy of the decision, go here.

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