Mark Robertson KC appeared for the appellant (the taxpayer), instructed by Small Myers Hughes.
This was an appeal from Sunna v Commissioner of Taxation [2025] FCA 1499, in which the primary judge determined the taxpayer’s challenge to objection decisions made by the respondent (the Commissioner). Mr Sunna (the taxpayer) had entered into a contract of sale for a Sydney property in June 2019, with settlement in August 2022. Under s 104-10(3) of the Income Tax Assessment Act 1997 (Cth), the CGT event occurred in the 2019 income year. Instead, the taxpayer reported a smaller capital gain in his 2020 return and was assessed accordingly. Outside the usual amendment period, the Commissioner relied on s 170(10AA) of the Income Tax Assessment Act 1936 (Cth) to amend both years, adding the gain to 2019 and removing it from 2020. The primary judge upheld the 2019 amendment but set aside the 2020 one. Both parties appealed.
The Full Court rejected the taxpayer’s arguments that the uncorrected 2020 assessment barred a correct 2019 assessment, on the basis that nothing in the legislation, s 6-25 of the Income Tax Assessment Act 1997 (Cth), the conclusive evidence rule or Richardson’s case supported the contentions advanced, and that the taxpayer’s constitutional arguments were misconceived. On the cross-appeal, the Court reasoned that s 170(10AA) only permits amendments that give effect to the backdating in s 104-10(3), not corrections of errors. The CGT event never occurred in 2020, so the 2020 amendment fell outside that power.
Both the appeal and cross-appeal were dismissed, with the taxpayer ordered to pay 90% of the Commissioner’s costs.
The judgment can be read by clicking here
