DEFAULT ASSESSMENTS AND THEIR CONTEST BEFORE BOARDS OF REVIEW

Abstract

Section 167 Income Tax Assessment Act 1936 provides that where no return has been furnished, or the Commissioner is dissatisfied with the information disclosed in the return received, he may make a default assessment upon such amount upon which, in his judgment, income tax ought to be levied. This section merely complements s. 166, which vests upon the Commissioner the obligation to issue assessments either from the returns and/or from any other information. This is a mandatory obligation from which the Commissioner cannot be restrained by, say, an injunction unless a taxpayer is able to show bad faith — Lucas v. O'Reilly For the present purposes, I do not propose to make a distinction between cases where assessments have been lodged but the Commissioner has formed the opinion that the taxpayer has under-declared his assessable income, and those cases where no returns have been lodged at all. In either event, a taxpayer has set in train the kind of entertainment which is half ballet and half comic opera — ballet in the sense that all the steps are neatly predetermined and choregraphed; comic opera in the sense that the cases are invariably highly amusing and often stretch credulity to the limit.