clr/1984/1984_3_857.pdf

(1984)Held, that the administration's assessment of facts isnot subject tojudicial control byan administrative Court on a recourse for annulment; that ataxpayer that fails or neglects to submit the income tax returns takes upon himself theriskof having his assessable income arrived at by an inquiry to be made by the 5 Commissioner and the determination and assessment of the tax by the Director; that it iswellsettled that in recourses against an assessment of income tax undei Article 146of the Constitution, this Ccurt will not interfere with the subjudice decisionof the Income Tax Authorities when it comes tc the conclusion 10 that such a decision was reasonably and properly open to them on thebasis of the corrected facts and in thelight of the correct application of the relevant legislation and principles of law; that the burden of proof to satisfy the Court that it should interfere with such a decision liesalways on an applicant; that 15 itisclearthat inviewofthefactsthatwerebefore therespondent Commissioner at the time and in the light of the relevant legislation, itwas reasonably open to himto reach theconclusions he did in respect of theapplicant's taxable incomeand it cannot be said that the assessments complained of were arbitrary or 20 that the said assessments were imposed contrary to the Income Tax Laws,1961to 1973ortheTaxes(Quantifying and Recovery) Law No. 53of 1963,asamended by Law 61of 1969; that the applicant has failed to discharge the burden of satisfying this Court that the casein hand isa proper caseto interfere with the 25 sub judice decision; accordingly the recourse must fail. -Application dismissed. Cases referred to: Nikou v. Republic

(1983)3 C.L.R. 1113 at p. 1117; Republic v. Georghiades

(1972)3 C.L.R. 594 at pp. 692-

1. 30 Recourse. Recourseagainsttheincometaxassessmentraisedon applicant for the years of assessment 1966-
2. N. Clerides, for the applicant. A. Evangelou, Senior Counsel of the Republic with 35 M. Photiou, for the- respondents.Cur.·adv. vult. MALACHTOS J. read the following judgment. The applicant inthisrecourseclaimsadeclarationoftheCourtthatthedecision 958 3 C.L.R. Panayiotou v. Republic Malachtos J. of the respondent in respect oftheincome taximposed onhim for the yearsof assessment 1966to 1972isarbitrary and,therefore, null and void and of no legal effect whatsoever. The relevant facts of the case are the following: 5 The applicant, who derives hisincome from a tourist agency business, wasassessed by the Commissioner of Income Tax to pay income tax for the years 1970 and 1971 (years of income 1969 and 1970). As he objected to this assessment, a capital investigation was carried out by an income tax assessor, on 10 information and particulars given by him. The examination covered the period as from 30.9.64 to 27.1.72 and it revealed that the applicant was under-assessed. To complete the investigationtheapplicantwasaskedtofurnish fuithcr information and particulars, asno agreement could be reached in respectof 15 his chargeable income. The applicant failed to produce the information and particulars askedfor and therespondent Commissioner proceeded with raising of additional assessments for the years of assessment 1966, 1967, 1968, 1969, 1970and1971, givingto the applicant full explanation as to how he arrived at 20 thechargeableincome byhisletter dated 18th September,
3. By this very same letter the respondent Commissioner was informingtheapplicantthatifhedidnotagree withtheadditional assessments raised, hecould file an objection, together with the following information and particulars: 25 30 (a) balance sheet of the income of "Alecos Tours London Ltd" as on 31.12.70 or 31.12.71; (b) copyoftheprofit and lossaccountofthesaidcompany in respect of the same period; (c) certificate of registration of the applicant's house in London as wellasdetailed statement of thepricepaid by him for the acquisition of the said house; (d) detailed statement of the rents collected by him from thelettingofhishousein Londonduringtheperiodas from 30.9.64 to 31.12.
4. 35 As against the above assessments the applicant objected, through hisadvocate, by letter dated 26.10.72and, at thesame time, undertook to submit the information requested by the respondent Commissioner. However, despite the repeated 859 Malachtos J. Panayiotoa r. Republic

(1984)reminders bythe lespondent, the applicant failed to providethe required particulars. Finally, on 14.2.74,the respondent Commissioner infoimed the applicant that if he did not submit the infoimation requested within one month, he would have no alternative but to determine his income on the basis of the 5 available facts without further notice. As the applicant again failed to reply, the respondent Commissioner wrote the following letter to the applicant dated 21.1.75: "I refer to your objection to the tax assessments of your 10 income for the years of assessment 1966to 1972(yearsof income 1965to 1971)and Iwould inform youasfollows: (

1. a)your assessments for the above years were mainly based on your signed statements of the 27th January, 1972, particulars of the balance sheet of your income 15 for the aforesaid years were given to you in my letter of the same reference and dated 18thSeptember, 1972. (
2. b)you did not supply the information and particulars' requested in my aforesaid letter; (
3. c)the promise given byyour advocatein hisletter dated 20 26th Octobei, 1972that the said particulars would be submitted after your return from London and, in any event, not later than the end of January, 1973, was not kept; (
4. d)you failed to comply with the contents of my letter 25 dated 14thFebruary, 1974,bywhichyouwererequested to submit particulars in respect of your objection within one month from the date of my said letter. Nevertheless,yourcasewasre-examinedand ittranspiied that your tax assessments for the same years are coirect 30 and as a result I have decided to confiim them." Notice of tax payable in respect of years of assessment 1966 to 1972, dated 25.2.75, were enclosed in the aforesaid letter. This income and tax payable was determined as follows: Yearof assessment 1966 1967 Amount £4000.£4000.860 Tax Payable £915.800 £879.200 35 3 C.L.R. 1968 1969 1970 1971 5 1972 Panayiotoa v. Republic £4000.£5000.£5000.£5000.£5000.- MaJacbtos J. £871.700 £942.500 £767.000 £767.000 £912.500 The applicant being dissatisfied with the above assessments, filed the present recourse, which is based on the following grounds of law: 10 1. That the assessments raised are arbitrary and do not correspond to the actual income of the applicant; and 2. That the subjudice decision is contrary to the provisions of the Income Tax Law of 1961 as well as the Taxes (Quantifying and Recovery) (Amendment) Law of 1963. The only argument put forward by counsel for applicant in 15 hiswritten address,isthat atallmaterialtimestheapplicantwas residingintheUnitedKingdomandhewasonlyvisitingCyprus occasionally on a temporary basis. Hefurther argued that the fact that his son followed him to the United Kingdom since 1967andhisdaughter in 1968 and,finally, hiswifeinJuly1972, 20 support the said allegation of his client. He also argued that the acquisition of immovable property in the United Kingdom, the profits from his business there, etc., are not relevant to the assessment on his income tax in Cyprus as the money was earned through his business in England where he had already 25 paid income tax. On the other hand, it has been submitted bycounsel foi the respondent that theallegationofthe applicant that hewasnota resident of Cyprus, is unfounded. In the first place, the said allegationhasnot beenput forward before therespondent when 30 his case wasexamined by him, but, on the contrary, according to his own income tax teturns submitted for the years 1965to 1971, theapplicant wasa resident of Cypruslivingwithhiswife in respect of whom he claimed an allowance. Moreover, he claimed tax allowancesin respect of histwochildren whowere 35 studying at the time in the United Kingdom. Counsel for the respondent also submitted that the only reasonableinference from the statementsmadebytheapplicant 861 Malachtos J. Panayiotou v. Republic

(1984)before the Commissioner is that he was at the material time a resident of Cyprus. The legal principles governing the interference by an Admi­ nistrative Courtwiththedetennination of thefactual basisofan administrative act or decision, are well known and have been 5 expounded inmany decisions of this Court. Intherecentcase of Achilleas Nikonv. The Republic

(1983)3CL.R. 1113 at page 1117 the following is stated: "Thereis ampleauthoritywithregard tothenonreviewabi­ lity of the determinationon themerits in respect of which 10 I dealt at length in the case of TheRepublic, through The PublicServiceCommission v. Lefkos Georghiades

(1972)3 C.L.R. 594, at pages 692-695. Suffice it to say thatthe administration'sassessments offacts ishotsubject tojudicial control by anadministrative Couitonarecoursefor annul- 15 ment. (See Zacharopoullos 'Digest of Caselaw'

(19351952), Vol. 1, at p.41, para.251 under the heading 'Non-· reviewability of the Determinationon the Merits' and the numerous decisions of the Greek Councilof State for the years 1961-1963, Vol. Ά ' (A-N)p. 77, which may be con- 20 densed as follows: 'The ground for annulmentdiiected against theadmi­ nistration's determination of the facts is rejected as unacceptable or, questioning such detennination on the merits, since same is not proved to be the product 25 of a misconception of the facts or in excess of the extieme limits of the discietionary powers of the administration. Moreover,theground for annulment referring to the inefficiency and misconception of the reasoning of the act against which the recourse is 30 directed and attacking the determination of the facts made by the administration.without exceeding the extreme limits of its discretionary powers is rejected as unacceptable1''. Further, it must be borne in mind that the applicant has 35 failed to submit to the respondent the relevant information despite therepeated reminders tothateffect. Onthis pointthe . followingpassage,whichappearsatpage 1118intheNikoucase, supra, is relevant: 862 3 C.L.R. 5 10 15 Panayiotou y. Republic Malachtos J. "Needles to say that one should not lose sight of the fact that theapplicant himselffailed tosubmit at the appropriate time his returns of income which would inevitably contain mattersthat would havebeen within hisexclusive knowledge and which could be duly investigated by the respondent , Commissioner. A tax-payer that fails or neglects to submit the income tax returns takes upon himself the risk of havinghisassessableincomearrived at by an inquiry, which inthepresent casecould not buthave beenthebestpossible. Moreover undet section 13

(3)of the Assessment and Collection of TaxesLaw, 1978-1979,incases where a person hasnot delivered a return and the Director is of the opinion that such person is liable to pay tax to the best of hisjudgment, the Director may determine the object of the tax and assesssuch person according to the nature and extent of his business." And, further down at page 1119 the following is stated: 20 25 30 35 "It is well settled that in recourses against an assessment of income-tax under Article 146 of the Constitution, this Court will not interfere with the sub judice decision of the Income-Tax Authorities when it comes to the conclusion that sucha decision wasreasonly andproperly opento them on the basis of the corrected facts and in the light of the correctapplication ofthe relevant legislation and principles oflaw.Theburdenofproof to satisfytheCourtthat it should interfere with such a decision lying always on an applicant. (SeeRallis Makrides v. The Republic

(1967)3 C.L.R. 147; Clift v. The Republic

(1965)3 C.L.R. 285; Christidesv. The Republic

(1966)3 C.L.R. 732; Coussoumidesv. The Republic

(1966)3 C.L.R. 1,adopted and followed in Lilian Georghiades v. The Republic

(1980)3 C.L.R. p. 525 at pp. 544-545, which latter case was apptoved on appeal by the Full Bench of this Court, its judgment lepoited undei the same name in

(1982)3 C.L.R. p. 659." It is clear to me that in view of the facts that were before the respondent Commissioner at the time and in the light of the relevant legislation, it was reasonably open to him to leach the conclusions he did in respect of the applicant's taxable income and it cannot be said that the assessments complained of were ;a« Malachtos J. Panayiotoa τ. Republic

(1984)arbitraly or that thesaid assessments weit imposed contraryto the IncomeTax Laws, 1961 to 1973 oi the Taxes (Quantifying and Recovery) Law No. 53 of 1963,as amended by Law 61 of 1969. Finally, 1must say thatin the present case the applicant has 5 failed to discharge the burden of satisfying this Court thatthe case in hand is a proper case to interfere with the sub judice decision complained of. Therefore, this recourse fails and is hereby dismissed. On the question of costs, I make no order. 10 Recourse dismissed.No order as to costs. 864