|
|
|
  |
| Sunday, 14 November 2004 |
 |
|
 |
Business |  |
| News Business Features Editorial
|
Evidence in tax appeals Observations by Cecil Aluthwela In a series of articles former Deputy Commissioner of (Appeals) Department of Inland Revenue Cecil Aluthwela gives his observations on the article titled " On tax appeals - Some reflections" by Stanley Fernando (BA Ceylon) Attorney-at-Law Lecturer and Examiner in Tax Law, Council of Legal Education, Visiting lecturer in Tax Law, Faculty of Law, University of Colombo which appeared in the July 1993 issue (vol.1 No.1) of the Journal of the Institute of Taxation. These observations present different points of view which may be of benefit and interest to the tax paying public. The Inland Revenue Act (Sri Lanka) referred to is Act No 28 of 1979. The sections referred to are those in the Act. Under this caption Mr. Fernando states "The burden of proof that an assessment is erroneous and excessive must be discharged by the appellant or by the revenue when the burden is on the revenue". I cannot understand how Mr. Fernando can conclude that there is an onus on the part of the revenue to establish that an assessment is erroneous and excessive. If Mr. Fernando is right the revenue will have to argue against the very assessment issued by it. That being an absurd situation it is necessary that Mr. Fernando be informed that there is no such onus on the revenue. Secondly, Mr. Fernando's statement above, lays on the appellant a burden not contemplated by the statute. According to Mr. Fernando the burden of proof entails the appellant establishing that the assessment is BOTH erroneous AND excessive. This however is not the requirement in terms of the statute. The statute uses the words "excessive" and "erroneous" disjunctively and not conjunctively. The statute confines the onus to establishing that the assessment is EITHER excessive OR erroneous vide section 121(5) of the Inland Revenue Act. Thus the statute contemplates a lesser burden on the appellant than that placed by Mr. Fernando. In this connection it is necessary to mention that under the Income Tax Ordinance (Chapter 188 of the Legislation Enactment of Ceylon), the onus on the appellant was to establish that the assessment is excessive; though in the case Guillain v CIT (decided in 1949) Dias J. tagged on the additional word WRONG. This is what he said, "Therefore when an assessee appeals against such an assessment, the onus of displacing this presumption rests on him, and it is for the assessee to begin and satisfy the Commissioner that the assessment is wrong or excessive". With the enactment of the Inland Revenue Act No. 4 of 1963 section 101 (4) the appellant could discharge the onus by establishing that the assessment is Excessive or Erroneous. There is also a minor issue which merits consideration, namely, the reference to lower appellate-tribunals. Mr. Fernando classes the Commissioner-General as a tribunal. In this Mr. Fernando is not alone. In Hakim Bhai v CIT, Garvin SPJ said "Where as in this case, the assessor and the various tribunals of appeal"; thereby implying that the Commissioner of Income Tax (the present Commissioner-General) is also tribunal. Again in CIT v Alludin Gratiaen J. said "before each successive tribunal" once again implying that the Commissioner of Income Tax (the present Commissioner-General) is a tribunal. This view however is not tenable as a tribunal generally is a body with quasi judicial functions, for example the labour tribunals, the rent tribunals, and so on. For tax purpose in Sri Lanka there is only one tribunal, that is the Board of Review. |
|
| News | Business | Features
| Editorial | Security
| Produced by Lake House |
