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(1989)19S9June 17 ISTYLIAN1DES.J.] INTHE MATTER OF ARTICLE 146OFTHE CONSTITUTION ROUSHIAS HADJICHRISTODOULOU, Applicant, v. THE REPUBLIC OF CYPRUS.THROUGH THE COMMISSIONER OF INCOMETAX. Respondents. (Case No.7/S6) Tivcation— Income Tax — Assessment and Collection of Taxes — The Assessment and Collectionof TaxesLaw, I97S (Law4/7S)as amended by Laws 23/7S and41/79,section23
(1)— Time limit within which the Director may raise an assessment — The time is within the year of assessment or within six years of the expiration thereof — Year of 5 assessment means theperiod of 12months commencing on thefirstday of Januaryeachyear — Directormay invoke hispowers undersection 23.1, whenever he, bona fide, forms the view that no assessmentwas raisedorthetaxleviedisinsufficient—Thelimitinrespectoftheincome of 1970 (year of assessment 1971) endedon 31December 1977andfor \Q the subsequent year on 31 December 1978 —As the assessmentswere raisedon 13October
  1. they wereraised within the aforesaidtime limit. Taxation — Assessment and collection of taxes — Quantification and 15 recovery of — Governed by the Law in force at the time of such quantification, assessment and recovery — This does not amount to retrospective taxation. Constitutional Law— Taxation—Constituiion, Art. 24.3—.Quantification 2 0 andrecovery of taxesgoverned by the Lawinforce at the time ofsuch quantificationand/orrecovery —Thisdoesnot contravene Art. 24.3of 692 3 C.L.R. Hadjichristodoulou v. Republic theConstitution. 5 10 15 Constitutional Law — Taxation — Constitution. Art. 24.3 — Interest .. payable on amount of tax — It isnot taxation — It can be imposed retrospectively. Misconceptionoffact— What amounts tomisconception oftact— Failure tomake dueinquirycausinglackofknowledgeofmaterialfactsamounts to misconception of fact — It may consist of cither the taking into accountof non-existingfactsor thenon-taking into accountofexisting facts — Hardenof establishing it. fallson the person challenging the validityofthedecision in question—Presumptionthaian administrative decision isreachedoficracorrectascertainmentof ihcrelevant facts. Judicial control — Assessment of taxes — Inierfcrcncc by the Court — Principlesapplicable—Courtdocsnot interfereifthesubjudicc decision was reasonablyopen to therespondent on the basis of the correctfacts andinthe light of thecorrectapplicationof therelevantlegislation and principlesofLaw. 20 25 Taxation — Income Tax — Interest — Unjustifiableomission — The Assessment andCollection of Taxes Law. 197S (Law4/7S).as amended by Law23/
  2. section42
(2)— Michaclidou v. The Republic
(1985)3 C.L.R. IS36atpages 1848 to 1852 cited withapprovalandfollowedas regards meaningof "omission"and '•unjustifiable". The principles enunciated by ihc Court in determining ihc present recourse against the sub judicc assessment of income tax appear sufficiently in the hereinabove Headnotcs. 30 35 40 As regards the complaint in respect of the imposition of interest on theground of unjustifiable omission in the sense of section 42
(2)of Law 4/7S.asamended, itshould benoted that the applicant hadfailed to make anyreturn of income for the years ofassessment 1971.
  1. 1973,
  2. Hesubmitted hisreturns for theyears ofassessment !
  3. 1970(yearsof income).
  4. 1975.on 10/8/
  5. The assessments as far as the years of assessment 1977 and 197S were concerned were raised on 26/4/1977 and 1Q/8/I97S respectively. The Court found that there was an unjustifiable omission in respect of ihc.years 1971-1974.both inclusive.The Court further found that the decision to charge interest for the year of assessment 1975 was 693 Hadjichristodoulou v. Republic
(1989)reasonably open to the respondent. Having regard to all the circumstances, including the position o\ the taxpayer, a villager, and an animal breeder, theCourt thought that thedecision to impose interest in respect of [he year of assessment 1976was not reasonably open to the respondent. Charge of interest can be made undersection 42
(2)ifthere 5 is delay in making an assessment. There wasno delay in respect of the years of assessment 1977 and 197S.though the taxpayer submitted his returns on 3 December 1977and 15December 197S,respectively, after the assessments were raised. 10 In the light of the above the Court annulled in part the sub judicc decision as regard the imposition of interest for the years of assessment 1976, 1977and 1978. The Court dismissedtherecourse asfar asallother issuesare concerned. 15 • • Parr of sub judicc decisionsrelating to payment of interestintherespectofthe yearsofassessment 1976, 1977and 1978 annulled. Recourse in ailother respects dismissed. !\'oorderas to costs. 20 Cases referredto: Chhstou v.Republic
(1965)3CL.R. 214, 25 Matsisv.Republic(MinisterofFinanceandAnother)
(1969)3 CL.R. 245, Republic andAnother v. Frangos
(1965)3CL.R. 641. Mavromuti v.RepublicandAnother (No.!)
(1966)3 CL.R. 143. 30 Solomonides v.Republic (Commissionerof Income Tax)
(1968)3 CL.R. 105. Constannc Estates v.Republic
(1982)3 CL.R. 859, . . . 35 loannides v.Republic
(1985)3 C.L.R.1801f IgnatiouandAnother v.Republic(I9S9) 3CL.R. 346. 40 loannides v. Republic (Councilof Ministersand Others)
(1972)3 CL.R. 31S, - •- 694 3CL.R. Hadjichristodoulou v.Republic Mikelhdou v.Republic
(1981)3CL.R. 461, Platruisv. Republic(Councilof MinistersandAnother)
(1969)3 CL.R. 366, 5 P.G.G.Chitv.RepublicandAnother
(1965)3CL.R. 285, Christidcs v.Republic
(1966)3 CL.R. 732. 10 Makridcs v. Republic(Ministerof Finance)
(1967)3CL.R. 147, Ccorghiades v.Republic(19S2) 3CL.R. 659. Mangtiv.Republic
(1983)3 CL.R. 52, 15 Hadiitraclis and Another v.Republic
(1984)3 CL.R.
  1. Michachdouv.Republic(19S5) 3 CL.R.
  2. 20 Recourse, Recourse against the validity of the decision of the respondent on the objections of the applicant in respect of the income tax for the years of assessment 1971-1978 and the 25 imposition of special contribution for the year
  3. M. Pdides,tor the Applicant. Y.Uizarou,Counsel oi the Republic B.for the Respondent. 30 Cur. adv. wit. STYLIAN1DES. J. read the following judgment. The applicantbymeansofthisrecoursechallengesthevalidityolthe 35 decision oftheRespondent on the objections of theapplicant in respect of the income tax for the years of assessment 1971 to 197S (years of income 1970-1977); the imposition of special contribution for the four quaners of the year 1977 and the relevant Notices of Assessment. 40 TheRespondent imposed interest for allthe assessments and annulment of this decision isalso sought. 695 Stylianides, J. Hadjichristodoulou v. Republic
(1989)The facts of the case are as follows:The applicant. Roushias Hadjichristodoulou. of Akaki, Nicosia, derived his incomeat all material times from director's remuneration of his private family company Agroktimatikes 5 Epichirisis Roushias Ltd. and from other income, either belonging to that company, which was not recorded in the books of account of the company, and/or otherwise. The applicant was a stock farmer and animal breeder. In 1970 he founded and caused to be registered the aforesaid company 10 limited by shares. His pre-incorporation business was taken over by this company. Hewas a widower from 1970. He was living with his younger daughter, who married in 1976. Applicant failed tosubmit his returns of incomefor theyears 15 1970-1973 although such return were being sent to him for completion every year. His returns for the year 1974 to 1977 were submitted on the following dates and the only income declared was director's remuneration as follows:20 Year Date submitted 1974 1975 1976(
  1. a)1976(
  2. b)1977 10. 8.1977 10. S.1977 3.12.1977 15.12.1978 I5.12.I97S Remuneration declared £ 1.850 2.400 2.400 3.000 3.000 Residential Income £ 10 10 25 — — „ On 26th April. 1977. Respondent issued toapplicant aNotice 30 of Assessment for the year of assessment 1977 on income of £8.000.-: against this assessment theapplicant objected through his accountant Mr. Kalopetritis by letter dated 7th May. 1977(see Appendix Β to theopposition). 35 On 13th October. 1977. the Respondent issued to the applicant Notices of Assessment for the years of assessment 1971 to 1976. Objection was taken to these assessments by the same accountant in writing - (see Appendices C. D. Ε to the opposition). On 10thAugust. 197S. theRespondent raised assessment for 696 40 3 CL.R. Hadjichristodoulou v. Republic Stylianides, J. the year 197S. against which objection was made on the 20th September. 1978 -(see Appendix F). 5 10 15 On 22nd December, 1983. Respondent issued to applicant Notice of Assessment for Special Contribution for the four quarters of the year 1977, against which the applicant objected through another firm of accountants by letter dated 16th January, 19S4. On 12thOctober, 1978,applicant was requested inwriting by Respondent to submit his return of income for the year 1977 and capital statements as at 31st December of each of the years 1974 to 1977. showing his wife's and children's assets and liabilities accompanied by all necessary documents. Applicant submitted only his return of income for the year 1977 and two statements showing that his only assets and liabilities as to 31st December. 1977 and 31st December, 1978, were the following:- 20 31st December. 1977 25 1. Fourshares inthe aforesaid named private company. 2. Motor car. Registration No. HM 57. purchased in 1975. valued at £1.530.-. 3. He was indebted in £1,485.- to the Co-operative Credit Society of Akaki. 31st December. 1978 30 1. Thesame four shares. 2. A Peugeot car JQ 817, purchased on ISth September. 197S, at £5.000.-. Hesold motorcar HM57 at £3.500.35 40 Such statements showed no other movable or immovable property, bank account or anything else in Cyprus or abroad (Appendices Ηand Ito theopposition). The Respondent in investigating applicant's case requested him to submit evidence regarding any account that was kept by him with Barclays Bank and the Chartered Bank and copies of the drawings and building permits for the erection of his 697 Stylianides, J. Hadjichristodoulou v. Republic
(1989)daughters' houses, No drawings or building permits were submitted with regard to the houses, but a certificate from applicant's architects - Petevis and Georghiades-dated Sth March,
  1. to theeffect thatthehouse of Maria Gregoriou of Akaki was erected andcompleted in 1977 at a cost of £8.000.-. 5 On lSth April. 1981, Respondent demanded in writing - (see Appendix Μ to the opposition) - submission of copies of applicant's account with Barclays Bank from 1st January, 1970 to 31st December. 197S. Copy of accountwas submitted for the period 1st October, 1974 to 27th December, 1978, only. This 10 statement discloses that applicant was depositing and drawing various sums of money, which were not justified from the amounts of receipts as remuneration from thecompany, which. according to his version, was the only source of his income as from
  2. The Respondent ascertained that the applicant was 15 not recording in the books all theincome which belonged tothe company and thushewas making false entries by having pan of the company's income deposited in his own personal account and he was not making correct returns regarding his actual income. Itwas revealed thathefailed to declare assets which he 20 "owned as at 31st December. 1977: a small account at Barclays Bank, balance of his current account with his private company -£7.205.-.cost of acquisition of three fields in 1975 - £2.469.-. A parallel investigation was carried into the income tax 25 affairs of the company. The applicant was not responding to several requests of the Respondent to call at his office for settlement of his income tax liability and the applicant's auditors informed the Respondent 30 that their client was not co-operative with them and,duetothis, they ceased acting lor him. The Respondent proceeded and determined the amount of the object of the tax of the applicant for the aforesaid years, on 35 the basis of the evidence available to him and his such decision was communicated to the applicant by letter dated 25th October, 19S
  3. Notices of Assessment for the years of assessment 1971 to 197S (years of income 1970 to 1977) and Notices of Assessment for special contribution for the four 40 quaners of the year 1977 were sent to him on same day. 69S 3 CL.R. Hadjichristodoulou v. Republic Stylianides, J. Thegrounds on which the applicant reliesare:- 5
  4. The assessments for the years of assessment 1971 and
  5. which were raised on 13th October,
  6. were made outside the six years* period provided in section 23
(1)of the Assessment and Collection of Taxes Law. 197S(Law No.4/78),as amended. 10
  1. The Respondent failed to make a correct assessment of the factual background and thus acted under a misconception of fact. 15
  2. Thedemand for interest onthetax payable from thedates stated on the Notices, i.e. from 1st December of the year ofassessment attherateof6% for theyearsof assessment 1971 to 1977and 9% for the year of assessment 1978,is ultra viresand lacks due reasoning. 20
  3. The case for the annulment of the special contribution isa corollary tothejudgement oftheCourt ontheincometax pan of thecase. GROUND 1: 25 The liability to pay tax accrues in the year when the income was earned, irrespective of whether the Commissioner of Income Tax has sent anotice of assessment on the taxpayer or not and the income tax isdeemed to have been imposed at the timewhentheincomeisearnedandtheliabilityactuallyaccrued 30 (Demetris Petrou Christou and The Republic of Cyprus through The Commissioner of Income Tax
(1965)3 CL.R. 214; Andreas Matsis v.Republic (Minister of Finance and Another)
(1969)3CL.R. 245.acase on estate duty). 35 The Assessment and Collection of Taxes Law, 1978 (Law No. 4/78), as amended by Laws 23/78, 41/79, is a Law to consolidate andamend the Laws relating to the assessment and collection of taxes. This legislation regulates the machinery of assessment andobjections andnot thejurisdiction tochargetax. 40 which isderived from the IncomeTax Legislation. Section 23
(1)of Law4/7Sreads:- 699 Stylianidcs, J. Hadjichristodoulou v. Republic
(1989)"23.-
(1)WhereitappearstotheDirectorthatanyperson on whom has been imposed under any Law. including a Communal Chamber Law imposing a personal contribution in the form of income tax enacted either before or after the commencement of this Law. has not been assessed or has 5 been assessed at a less amount than that which he ought to have been assessed, the Director may, within the year of assessment or within six years of the expiration thereof. assess such person at such an amount of tax or additional amount of tax as was imposed and ought to have been 10 assessed and collected under the provisions of the Law imposing the tax, and the provisions of this Law shall apply to such assessment and tothetax assessed thereunder: Providedthat inmakinganysuchassessment the Director 15 shall allow such deductions as the Law applicable to the respective year of assessment provides and the tax payable on any such assessment shall be at the rates provided in the Lawapplicable to the respective vear of assessment." 20 When the liability for tax accrues and is neither met nor extinguished, the statutory provisions applicable for the quantification and recovery of such tax at the time of such quantification and assessment and recovery are the Laws in force at this time. This does not amount to retrospective 25 taxation, nor issuch Law contrary to the provisions of Anicle 24. paragraph 3.of the Constitution. The permissible time for assessment isunder sub-section
(1)ofsection 23within the year of assessment or within six years of the expiration thereof. •'•Year of assessment' means the period of twelve months 30 commencing on the first day ofJanuary ineach year." Under section 6 of the Income Tax Legislation, tax shall be charged, levied and collected for each year of assessment upon the chargeable income of any person for the year immediately 35 preceding the year of assessment. Under section 23
(1),theRespondent haspower toraise new or additional assessments, when it appears to him that a taxpayer was not assessed at all or was under-assessed. The 40 power conferred under section 23 may be exercised within six years after the end of the year of assessment. Under paragraph 700 3 CL.R. Hadjichristodoulou v. Republic Stylianides, .1. 2 of section 23, where any person has been guilty of fraud or wilful default, the time-limit of the six years mentioned insubsection (I) isincreased to twelve years. 5 Theonlylimitation totheexerciseofthesepowers isthetime to which Ihave referred. The Respondent is entitled to invoke his powers under section 23
(1). whenever, he, bona fide, forms the view that no 10 assessment wasraised,orthetax leviedisinsufficient, withinsix years of the expiration of the year of assessment - (The Republic of Cyprus, through
  1. The Attorney-General,
  2. The Ministry of Finance through The Director of The Department of Inland Revenue, and loannis Chr. Frangos 15
(1965)3 CL.R. 641; Theophilactos Mavromati (i\o. 1) and The Republic of Cyprus, through 1.The Director of Inland Revenue, 2. The Minister of Finance
(1966)3CL.R. 143, at p. 150: Dr. Solon Solomonides v.Republic (Commissioner of Income Tax)(\96$) 3 CL.R. 105; Constanne Estates v. 20 Republic (19S2) 3CL.R. 859:loannides v.Republic
(1985)3 CL.R. 1801; Apostolos Ignatiou and Another v. The Republic of Cvprus. through The Commissioner of Income r;i.Y(I9S9)3CL.R. 346). 25 In the present case the six years limit ended for the income of 1970.year of assessment 1971.on 31st December. 1977.and for the year of income 1971.year of assessment 1972.on 31st December. 197S. Theassessments were raisedon 13thOctober. 1977.within the time prescribed bv the Law. 30 GROUND2: With regard tothe misconception of fact it iscommon place that failure to make adue inquiry causing lack of knowledgeof 35 material facts amounts tomisconception offact -(see.interalia. Constantinos loannides v.Republic (Council of Ministers and Others)
(1972)3 CL.R. 318: Mikellidou v. Republic
(1981)3CL.R. 461). Amisconception as to facts may consist of either the taking into account of non-existing facts or the 40 non-taking into account of existing facts. The burden of establishing that an administrative decision 701 Stylianides. J. Hadjichristodoulou v. Republic
(1989)was reached on the basis of a misconception as to the material facts lieson the person challenging the validity of such decision on this ground, as there exists a presumption that an administrative decision isreached after acorrect ascertainment of the relevant facts. (See, inter alia. Costas Platritis r. 5 Republic (Council of Ministers and Another)
(1969)3 CL.R. 366). It iswellsettled that,inanyrecourse underArticle 146of the Constitution against an assessment, the Coun willnot interfere 10 with thesubjudice decision oftheincometax authorities,ifitis of the opinion that such decision was reasonably and properly open to them on the basisofthecorrect facts and in the lightof thecorrect application of therelevant legislation and principles of law - (see P.G.G. Clift and The Republic of Cyprus 15 through (a) The Minister of Finance, (b) The Commissioner of Income Fax
(1965)3CL.R.2S5; Christos Christides and The Republic of Cyprus, through The Director of Inland Revenue Department of the Ministry of Finance
(1966)3 CL.R. 732; Rallis Makrides v. Republic 20 (Minister of Finance)
(1967)3 CL.R. 147; Georghiades v. Republic
(1982)3 CL.R. 659: Mangli v. Republic
(1983)3 CL.R. 52: HadjiEraclis and Another v. Republic (19S4) 3 C.L.R. 604). 25 With regard toground 2and the incorrect assessment of the factual background, counsel for the applicant referred to the following matters:Personal living expenses, car expenses, gifts to daughters. 30 income not subject to income tax. child allowance for the younger daughter of the taxpayer who was living with him until 1976when she was married. It was argued by counsel for the applicant that the living 35 expenses of the taxpayer assessed bv the Respondent at £10.000.- for the years'l970 to 1977'(both inclusive) were excessive, having regard to the standard of living ot the applicant, his way of life, his family condition and the social conditions in hisvillage Akaki. 40 With regard to car expenses,it wasargued that it should not 702 3 CL.R. Hadjichristodoulou v. Republic Stylianides, J. beestimatedat£2.000.-inall. Itwasarguedthat it waswronglycomputed. as the said car was mainly used for company purposes andthat,at anyrate,the reasonable amount shouldbe in the region of£1.000.-. With regardto gifts to daughters,there isno disputethat the said sums were given to them. His main contention isthat the gift ofsharesof£18.000.-.whichheadmitsthat hetransferred to the donees-daughters,wasmade for theservices they rendered throtigh the years,without proper remuneration and. therefore. a reasonable deduction should have been made so as to reflect the amounts which was saved by the applicant due to his daughters' services, as in tact that amount or such deductible amount was not earned or belonged to the taxpayer, but to his daughters. £525.- were credited to the directors' current account and £1.000.- from the sale of a private car was ignored by the Commissioner. No allowance was given for the younger daughter-childofthetaxpayer -for theyears 1971to 1976until her marriage. Most of the items to which this ground refers were within thepersonal knowledge ofthetaxpayer. Heshould have in his returns and/or otherwise give full particulars to substantiate his allegations and claim the deductions, etc.. to which under the Lawheclaims to havebeen entitled. The estimate tor the applicant's living and car expenses is reasonable inthecircumstances ofthecase. Not even ascintilla evidence was adduced to the Respondent substantiating the allegation that the car was used mainly for the purpose of the company. The property, which was subsequently turned into shares. wasincludedinthecapital statement asat 1stJanuary. 1970and not includedinthecapital statement asat 31st December. 1970. because it was transferred in the name of the company. The value ofshares inthecompany, whichtheapplicant gifted tohis daughters,hastobetaken intoconsideration,i.e..addedback so as to ascertain the applicant's correct chargeable income. Ifind nomerit intheallegations withregardto thehouseand thefurniture and£1.000.-cash.With regard tothededuction for 703 Stylianides, J. Hadjichristodoulou v. Republic
(1989)hisdaughter,the Law provides that,inrespect of achildover the age of 16, a deduction is made of £100.-, if it receives full time education in any secondary school, college, university or other educational institution in the Republic and £400.- if full time education is received outside Cyprus. The secondary education of the younger daughter was completed in 1972; hewas nomore after 1972 entitledtoany childdeduction, astherequirements of the Law were not satisfied. 5 On the basis of the aforesaid facts and the principles 10 governing the determination of a recourse of this nature, expounded earlier on in this Judgement. I reached the conclusion that the sub judice decision is not a product of misconception of fact. The Respondent carried out, so far as possible in the circumstances, a due inquiry. The sub judice 15 decision was reasonably open to the Respondent and is not faulty in this respect. GROUND 3: 20 The applicant complains that by the Notices of Assessment the Respondent demandedfrom theapplicant andmade payable by him interest as from 1st December of the respective year of assessment, at the rate of 6% per annum in relation to the tax for the years of income 1970 to 1976 and at 97c as from 1st 25 December, 1978 in relation to the tax for the year of income
  1. It was submitted that the delay in the determination of the objection was not due to the applicant and that, if any delay in 30 the making of the assessment was not due to the applicant's unjustifiable omission. Furthermore, that this part of the sub judice decision lacks due reasoning. In therespective Noticesof Assessment (Appendices ΡtoV) 35 we read:"
  2. Επειδήη καθυστέρηοηστη διενέργεια της βεβαΰοσης της φορολογίαςοφείλεταιστηδική οαςαδικαιολόγητη παρά­ λειψη τόκος προς 6% ετήοια καθίσταται πληοωτέος από 40 1.12...." 704 3 C.L.R. Hadjichristodoulou ν. Republic Stylianides, J. In theNotice of Assessment for theyear 1978 (Appendix W) we read:5 "
  3. Επειδήηκαθυστέρησηστηδιενέργειατης βεβαίωσης τηςφορολογίας οφείλεταιστηδικήσαςαδικαιολόγητη πα­ ράλειψητόκοςπρος9%ετήσιακαθίσταται πληοωτέοςαπό 1.12.78." The relevant statutory provision issection42
(2)of Law 4/
  1. 10 as amendedby Law 23/7S,which reads:- 15 20 25 30 35 40 "
  2. -
(2)Οσάκιςη καθυστέρησις εις τηνδιενέργειαν βεβακόσειος οφείλεται εις άδικαιολόγητονπαράλειψιντου φορολογουμένου, καταβάλλεται τόκος προς εννέα τοις εκατόνετησύιος απότης πρώτης ημέραςτουΔεκεμβρίου. του έτους εις το οποίον αναφέρεται ηβεβαύοσις. ανεξαρ­ τήτως του έτους εν τωοποίο)όνταχ εγένετο ητοιαύτηβεβαίωσις." ('"42.-
(2)Whenever thedelay inmaking anassessment is dueto ataxpayer's unjustifiable omission, interest at therate of nine percentum per annumshall be payable from thefirst day of Decemberof theyear to which theassessment relates. irrespective of thevear inwhichsuchassessment was actually made."') The proviso tosub-section
(2)of section 42 reads:••Providedthattheinterest payable with regard toany year of assessment preceding the year of assessment beginning on the 1st January. 197S, shall be at the rate of six per centum per annum." I dealt in some length with interest in tax cases and particularly with the aforesaid statutory provisions in Michaelidou v.Republic
(1985)3C.L.R.
  1. at pp. 1S4Sto 1S
  2. InterestinthisLaw isneithertaxnorpenaltyand.therefore,the constitutional provision prohibiting imposition retrospectively of tax isnotapplicable. Law 4/7S came into operation on 1st January.
  3. The 705 Stylianides. J. Hadjichristodoulou v. Republic
(1989)language of the sub-section and the proviso for payment of interest demands that the Law must be applied so as to have a retrospective operation. As said in Michaelidou case (supra), for interest to be 5 payable theremustbeunjustifiable omission."Omission*'means a failure togive any notice,makeany return,produceor furnish any document or other information required by or under the Law. The omission must be unjustifiable. A distinction must be made between unjustifiable and unreasonable. It is upon the 10 administration to determine,in each particular case, subject to judicial review by this Court, whether an omission is unjustifiable ornot. Even· person chargeable with tax has underthe Law togive 15 notice to the Director by the prescribed date in any year of assessment that he is so chargeable. He must. also, make a return of the object of the tax and such particulars as may be required by him to be rendered lor the purpose of the Law. whereby the tax is imposed. 20 The Respondent stated in his aforesaid decision that there was an unjustifiable omission on behalf of the applicant in the sense of section
  1. 25 The applicant failed to make anν return of income for the years of assessment
  5. He submitted his returns for theyears of assessment
  6. 1976 (years of income
  7. 1975) on 10th August.
  8. Assessments were raised for the vears of assessment 1971 to 1976 (both inclusive) on 13th 30 October.
  9. The delay in the making of the assessments for the years of assessment
  12. 1974 was due to the unjustifiable omission of the applicant to submit any returns. 35 With regard to the year of assessment
  13. the decision of the Respondent for payment of interest was reasonably open to him. This is not the case, however, with regard to the year of assessment
  14. Having regard to all the circumstances of the 40 particular case, including the taxpayer's position -a villager,an animal breeder -the time of raising theassessment for the year 706 3 C.L.R. Hadjichristodoulou v. Republic Stylianides, J. of assessment 1976,thedecision for interest for thisyear isnot sustained. 5 10 Assessments were raisedfor theyear of assessment 1977on 26th April. 1977 and for the year of assessment 1978 on 10th August.
  15. Objections were made on 7th May. 1977,and 20th September.
  16. respectively. -(see Appendix A) (p.2) and Appendices Βand Fto the opposition). Sub-section
(2)of section 42 applies where thereis delay in making an assessment andsuch delay is dueto the unjustifiable omission of thetaxpayer. For theaforesaid years of assessment there was no delayin 15 making the assessments, though the taxpayer submitted his returns on 3rd December. 1977 and 15th December, 197S. respectively, after theassessments were raised. 20 25 The determinationof the objection should not be confused with themaking of an assessment andthesending of noticesof assessment. Forthesethreeyears,thecombinedprovisionsof section
  1. relating to the time-limit within which payment of tax is to be made,andsection42{ 1).whichgoverns thepaymentof interest for non-payment oi tax in time, shouldhave been applied. The Respondentacted undermisconceptionof fact andlaw and in abuse andexcess of power. 30 GROUND4: With regard to special contribution, what Ihave said about income tax appliesconsequentially. 35 In the result, the pan of the sub judice decisions relating to payment of interestonthetax for theyears of assessment
  2. 1977 and 197S is declared null and void and of no legal effect whatsoever. 40 The recourse in all other respects fails and is hereby dismissed. 707 Stylianides, J. Hadjichristodoulou v.Republic
(1989)No order asto costs. Sub iudice decision partly annulled. No orderas tocosts. 70S

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