| 4/2/2012 |
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| Court of Appeal - Decisions in Income Tax Cases |
| Case No: 66 |
Delivered on: 22 March 1976 |
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Late Filing By Respondent Of Written Pleas. Amount Of Double Taxation Relief Due. Discretionary Powers Of The Commissioner Of Inland Revenue.
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The decision in this case, which was an appeal by the Revenue regarding double taxation relief, was spread over three Court pronouncements: two preliminary and one final.
In the first preliminary decision, the Court considered the fact that the respondents' formal written reply to the Revenue's appeal had been filed late. The Court ruled that it was inadmissible and had to be extracted from the records. This notwithstanding, the Court allowed the case to continue to be heard, so that respondent could advance all valid pleas verbally. In the second preliminary decision, the Court had to rule on a plea of nullity brought by the respondent who suggested that the amount of double taxation relief given by the Board of Special Commissioners could not constitute a point of law. The Court, however, stated that the Revenue was appealing on the grounds that the amount of relief was left to the department to determine, and that once the Board had agreed with the Commissioner's method of tackling the matter, it could not substitute its own discretion to determine the amount of relief due. This issue was a point of law.
In the final decision, the Court ruled that the Commissioner had discretionary powers to determine the amount of the doubly taxed income. The wording used by the law was that the claimant had to 'prove to the satisfaction of the Commissioner' the amount of the doubly taxed income. The Revenue agreed with the taxpayer regarding the gross amount of the income in question: the only argument was what expenses were to be allowed thereagainst. The Revenue held that a larger proportion of the taxpayer's total expenditure should be allocated against this income than what the taxpayer felt was adequate, thus reducing the amount on which relief was due.
The Board of Special Commissioners made its own calculations as to what should be so apportioned and decided accordingly. The Court held that this was an infringement of the Revenue's discretionary power in this respect, and as there was no indication that the Revenue had erred on a point of law in arriving at its conclusions, the Board's decision was over-ruled and that of the Commissioner of Inland Revenue re-instated.
BSC Case No: 7/66
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