| 21/8/2008 |
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| Court of Appeal - Decisions in Income Tax Cases |
| Case No: 84 |
Decided: 31 May, 1971 |
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Powers Of The Commissioner To Issue Additional Assessments. Personal Deductions Erroneously Allowed Clawed Back. Definition Of "Wholly". Use Of The Commissioner's Discretion
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The taxpayer was legally separated from his wife who was not wholly maintained by him as required by law, as she had some income in her own right. In the original assessment, the taxpayer was erroneously allowed personal deductions in her respect. These were clawed back by way of additional assessments.
Appellant's claims were dealt with as follows:
- When the Commissioner had originally allowed the deductions he had used his discretionary powers, and he could not subsequently revise his views.The Court held that, in granting personal deductions the Commissioner was not really using discretion: this only enabled him to ascertain facts. There was nothing at law to prevent him from updating his decision when it results that actual facts were not as originally thought to be.
- Appellant claimed that personal deduction wrongly allowed did not contribute income from any recognized source, and no additional assessments were therefore competent. The Court pointed out that the additional assessments did not change new income but only adjusted "chargeable income" which had been wrongly computed. In raising the additional assessments the Commissioner was only, as required by law, ascertaining that the taxpayer was charged with the correct amount of tax due from him.
- The deduction disallowed was correctly due at law. The Court disagreed. "Wholly maintained" meant precisely that, irrespective of how small was the amount of the income earned by the wife. The Court, however, recommended an appropriate change in the law which was later effected.
BSC Case No: 43/69
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