Boodhoo v Board of Inland Revenue

• Jurisdiction: Trinidad & Tobago
• Court: Court of Appeal (Trinidad and Tobago)
• Judge: Bernard, C.J.
• Judgment Date: 30 October 1986
• Neutral Citation: TT 1986 CA 31
• Docket Number: Civil Appeal No. 57 of 1985
• Date: 30 October 1986

Court of Appeal

Bernard, C.J.; Narine, J.A.; Persaud, J.A.

Civil Appeal No. 57 of 1985

Boodhoo

and

Board of Inland Revenue

Appearances

Mr. Robinson-Walters for the appellant (Board).

Rolston Nelson for the respondent (Taxpayer).

Robinson-Walters for the appellant.

R. Nelson for the respondent.

Income tax - Chargeable income — Appellant's assessment upheld.

Income tax - Chargeable income — Penalty for submission of incorrect return — Income Tax Ordinance, Ch. 33, No. 1, s. 83(4) — Whether legislation should indicate to tax payer exactly what category of statutory wrong doing was attributable to him — Whether penalty proceedings should be provided separately in the Income Tax Act.

Bernard, C.J.

1 At the close of the arguments in this appeal we allowed it in part and reserved on the other. In this connection we affirmed the readjusted chargeable income of $211,497.00 and ordered that the respondent be assessed accordingly. However, we reserved our decision with regard to the penalty imposed upon the respondent and affirmed by the Tax Appeal Board. We also reserved cur decision with regard to the matter of coats. We indicated then that we would give our reasons therefor later. I now give mine.

2 This was an appeal by the Board of Inland Revenue (“the Board”) against the decision of the Tax Appeal Board (“the Appeal hoard”) allowing by a majority the appeal by Bruce Procope (“the respondent() against assessment by the Board to income tax, additional tax and unemployment levy for the year of income 1972. In this connection by notice filed on April the 3rd, 1985, the Board in accordance with the provisions of section 43G of the Income Tax Ordinance Ch.33 No.1 (now section 9 of the Tax Appeal Board Act Ch. 4:50) requested the Appeal Board to state a case for the opinion of this Court which it did on April the 12 ^th of that year. The said notice was in the following terms:

“TAKE NOTICE that the respondent (the Board) herein bring dissatisfied with the judgment of the Appeal Board dated March 6 ^th, 1985, in the above matter, as being erroneous in point of law, do hereby request that you do state and sign a case for the opinion of the Court of Appeal, pursuant to section 9(1) of the Tax Appeal Board Act Chap. 4: 50.”

3 The point of law for the opinion of this Court is whether the majority decision of the Tax Appeal Board in allowing a particular sum, to wit $63,400, as a deductible item for income tax relief was right - the Chairman having dissented therefrom. Before I embark upon the exercise I desire to indicate that hereafter I shall, if it becomes necessary) refer to the Tax Appeal Board Act Ch.4:50 as the “Appeal Board Act” and because the Income Tax Ordinance Ch.33 690. l has since been replaced by the Income Tax Act Ch. 75:01 I shall for the purpose of tidiness confine my references to that Act hereafter as the “Income Tax Act”.

THE HISTORY

4 For the dear of income 1972 the respondent filed a return in which he represented the sum of $58,717.96 to be his chargeable income fair that gear. In 1976 the hoard commenced an audit examination in relation to that return. Arising out of that investigation the Board increased the respondent's chargeable income from $58,717.96 to 322,521.71 and assessed him to income tai and unemployment levy accordingly. The respondent objected to this assessment. As a result of the respondent's representations the Board revised the assessment and reduced the chargeable income from 332,522 to $211,497.00. On the basis of the adjusted chargeable income of $211,497.00 the Board thereafter assessed the respondent as follows:

Income Tax - 99,748.50

Additional tax under - 99,748.50

section 19(01.) of the

Income Tax Ordinance

Unemployment levy - 10,074.85

5 The adjusted chargeable income of $211.49,7.(10 vas arrived at by the Board as per hereunder:

$1. Chargeable income as returned by-appellant.	58,717.96
2. Fees earned for mutiny and sedition sedition trials	25,000.00
3. Director's fees - Planning Associates Ltd:	120.00
4. Fees for incorporation - Consolidated Investments Consultants Ltd	1,385.00
5. Expenses incurred in profession - met by cash	5,973.75
6. Unexplained deposits to cover - cheques. issued.	700.00
Carry forward	128,396.71
Brought forward	128,396.71
8. Cash expense - wife allowance –	6,000.00
9. Motor vehicle expenses –	2,400.00
10. Clothing –	4,800.00
11. Entertainment –	3,600.00
12. Purchase of shares in Gulf Park - Ltd, in the name of the appellant	2,900.00
13. Purchase of shares in Gulf Park - Ltd. in the name of P.A.J. Holdings Ltd.	63,400.00

THE LEGISLATION

6 This is a convenient stake at which attention may be drawn to the relevant statutory provisions. They are sections 83, 85, 86, and 117 of the Income Tax Act and section 8 of the Tax Appeal Board Act Ch.4:50,

7 So far as the Income Tax Act is concerned the relevant provisions of the sections referred to are as follows:

• “83.(1) The Board shall proceed to assess every pets(n chargeable with the tax as soon as may be after the day proscribed for delivering the returns.

• (2) Where a person has delivered a return the Board may –

  • (a) accept the return and make an assessment accordingly; or

  • (b) refuse to accept the return and, to the best of its judgment, determine the amount of the chargeable income of the person and assess him accordingly.

• (3) Where a person has net delivered a return and the Board is of the opinion that such person is liable to pay tax, it mad, according to the best of its judgment, determine the amount of the chargeable income of such person and assess ham accordingly, but such assessment shall not affect any liabilities otherwise incurred by such person by reason of his refusal, failure or neglect to deliver a return.

• 4) Subject to section 89(2) and (3), if at anytime within the year of income or within sax years after the expiration thereof, the Board makes an assessment which results in a person being charged to tax for the year of income in respect of a total chargeable income in excess of the chargeable income disclosed in the return of income rendered by such person, the hoard may (unless the person assessed proves to the Board's satisfaction that the omission or incorrectness of the return did not amount to fraud, covin, art or contrivance, or gross or wilful neglect) charge such person, in addition to the total tax otherwise charged in the assessment, further tax not exceeding the amount of tax charged in respect of the excess.

• (5) If any person neglects or refuses to render a return of income as required by this Act the hoard may (unless such person proves to the Board's satisfaction that such neglect or refusal was for reasonable cause and ought fairly to be excused) charge such person additional tax equal to treble the amount of tax which would have been payable if this subsection had not been enacted.

• (8) Without prejudice to the powers conferred by section 124 the hoard may for reasons which may appear to it sufficient at any time remit in whole or in part any additional tax charged under this section.

• (9) A discretion to charge additional tax vested in the Board by this section may be exercised, on appeal under section 87 by the Appeal Board; but if the Appeal Board confirms the decision of the hoard to charge additional tax and finds that the additional tax imposed by the Board did not exceed the maximum additional tax which could properly be charged, the appeal as regards the additional tax shall be dismissed.

• 85.(1) After completing its assessment, the Board shall prepare lists oar persons liable to tax.

• (86) (1) The Board shall cause to be served on each person whose name appears on the assessment list a notice addressed to him at his usual place of abrade or business stating the amount of his chargeable income and the amount of tax payable by him, and informing him (f his rights under subsection (2).

• (2) If any person disputes the assessment he may apply to the board by notice of objection in writing delivered to the Board to review and to revise the assessment made upon him, :such application shall state precisely the: grounds of his objections to the assessment and shall be made within fifteen days from the date of the service oft the notice of assessment.

• 89. (1) Subject to this section, where it appears to the Board that any person liable to tax has not been assessed, or has been assessed at a less amount than that which ought tai have been charged, the Board may, within the year of income or within six years after the expiration thereof, assess such person at such amount or additional amount as according to its judgment ought to have been charged, and the provisions of this Act as to notice oar assessment, appeal and other proceedings under this Act shall apply to such assessment or additional assessment and to the tax charged thereunder.

• (2) Where any fraud or any gross or wilful neglect has been committed by or on behalf of any person in connection with or in relation to –

  • (a) any tax for the former years of assessment or for any subsequent year of income; or

  • (b) any claim, deduction, relief, exemption or other matter having or that might have had a direct ear indirect effect upon the amount of tax for the former years of assessment or for any subsequent year of income, an assessment or additional assessment as the case may be, may, for any such former year of assessment or year of income, be made apt any time on that person under subsection (1) or section 82 or, subject to subsection (3), on the personal representative of that person under subsection (3) or section 66 and section 83.

• 117. (1) The Board may for any purpose related to the administration or enforcement of this Act require any person, except a person engaged in confidential professional relationship with such person, to...