Case T85

Members:
P Gerber SM
KL Beddoe SM

Tribunal:
Administrative Appeals Tribunal

Decision date: 30 October 1986.

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Dr P. Gerber and K.L. Beddoe (Senior Members)

In this case, the applicant is more sinned against than sinning and deserves the fullest sympathy. The sequence of events can be briefly stated: In 1979, the applicant deposited $55,000 pursuant to the Loan (Income Equalization Deposits) Act 1976. She withdrew an amount of $30,000 in July 1980. In June 1981, she approached the Tax Office in Toowoomba with a request for advice. She made it clear that she wanted to withdraw the balance of $25,000, but so as not to bring the amount into the 1981 tax year.

2. She was assured, by one of the officers, a Mr K, that the delay was such that the payment would not be made until the next financial year. In reliance on that advice, the applicant signed the application for repayment and dated it 10 June 1981. On 23 June 1981 she received a cheque for the amount applied for. She was surprised, and went back to the Tax Office only to be told, this time by a Mr C, not to bank the cheque until after the financial year.

3. In any event, Mr C undertook to rectify any tax problems which might arise. In reliance on that advice, the applicant did not bank the cheque till after the end of the 1981 financial year. No cross-examination was directed to the applicant and this evidence thus stands unchallenged. What then are the consequences?

4. It is common ground that the advice was wrong. Section 17 subsec. (3) of the Loan (Income Equalization Deposits) Act 1976 states:

``Where a request is made to the authorized person in accordance with this section in respect of a deposit or part of a deposit, the deposit, or the part of a deposit, as the case may be, becomes repayable on the date on which the request is made.''

The relevant section of the Income Tax Assessment Act, sec. 159GD subsec. (1) states:

``Where -

• (a) the whole or a part of a deposit has become repayable -
  • (i) as a result of a declaration made under section 16 of the Loan (Income Equalization Deposits) Act 1976 in pursuance of a request made under that section; or
  • (ii) in consequence of a request made under section 17 of that Act; and
• (b) immediately before the request was made there was an unrecouped deduction in respect of the deposit,

there shall be included in the assessable income of the depositor of the year of income in which the request was made -

• (c) where the whole of the deposit, or so much of the deposit as has not previously become repayable, has become repayable in consequence of the request - an amount equal to the amount of the unrecouped deduction; or
• (d) where part only of the deposit, or of so much of the deposit as has not previously become repayable, has become repayable in consequence of the request - the amount by which the amount of the unrecouped deduction exceeds so much of the deposit as has not become repayable.''

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ATC 1120

5. The provision is unequivocal; the amount applied for became assessable income in the year in which the request was made, namely 1981. The condition is mandatory and cannot be waived by the respondent, let alone a tax officer in a regional tax office. It is unfortunate that the advice was given, but it is clear that:

``No conduct on the part of the commissioner could operate as an estoppel against the operation of the Act''

(per Kitto J.,
F.C. of T. v. Wade (1951) 84 C.L.R. 105 at p. 117).

In the light of the above statement, we are satisfied that if an error has occurred, it is not one by which the respondent is bound. The proposition in the United Kingdom is perhaps less harsh; see, for example,
Robertson v. Minister of Pensions (1948) 2 All E.R. 767, a decision of Denning L.J. which has since been followed in various other cases. But, be that as it may, an Australian Administrative Tribunal, faced with the strongest authority of the High Court and countervailing authority in the United Kingdom, must loyally follow the High Court.

6. It may be that this applicant has some means of redress, but the path she has chosen - a reference to this Tribunal, is not one of them. There is regrettably no alternative but to affirm the decision under review.

Claim disallowed