16 Sep 13 Decision Impact Statement - Gashi
The ATO has issued a Decision Impact Statement in relation to the decision of the Full Court of the Federal Court in Gashi v FCT  FCAFC 30; 2013 ATC 20-377. An application for special leave to appeal to the High Court was refused on 16 August 2013 (see  HCATrans 181).
The case concerned whether the taxpayers had discharged the onus of proving that default income tax assessments issued to them based on the asset betterment methodology were excessive. The case also concerned the question of whether the assessments were invalid.
The Full Court found that the Federal Court does not have jurisdiction in tax appeal proceedings under Part IVC of the Taxation Administration Act 1953 to determine if assessments are invalid.
Further, the Full Court held that the taxpayers had not discharged the onus of proving that the assessments were excessive. It is insufficient for a taxpayer simply to show error on the Commissioner's part under s 167. A taxpayer must positively prove his actual taxable income, and must show that unexplained accumulated wealth was from non-income sources.
The ATO's view of the decision is stated as follows:
"The ATO notes that the decision of the Full Court is consistent with the views of the Commissioner on the inability to challenge the validity of assessments in Part IVC tax appeals, on the operation of s 167 of the ITAA 1936, and on what is required by a taxpayer in a Part IVC tax appeal to discharge the onus of showing that an assessment issued under s 167 is excessive."