Taxation Review Authority grants an extension of time for service of Points of Objection Notice
2012 case note - Points of Objection Notices, exceptional circumstances, extension of time.
This Taxation Review Authority ("TRA") decision was concerned with whether extensions of time for service should be granted for Points of Objection Notices issued by a tax agent on behalf of three taxpayers. The Points of Objection Notices were received by the Commissioner of Inland Revenue outside the statutory time period prescribed by regulation 21(1) of the Taxation Review Authorities Regulations 1998 ("TRA Regulations"). The TRA granted an extension of time for service to two of the taxpayers and declined the application of the third taxpayer.
The three taxpayers involved in this proceeding had sought cases stated to the TRA under the old objection procedure. In each of these cases the taxpayers failed to serve timely Points of Objection Notices upon the Director of Litigation Management. The taxpayers had also failed to seek an extension of time from the TRA to file their Points of Objection Notices. The Commissioner took this failure as a preliminary point and asked the TRA to dismiss the objections.
On 28 April 2011 an interim ruling Case 9/2011 (2011) 25 NZTC 1-009 (TRA) was delivered by the TRA, on the issue of whether the three objectors should be granted an extension of time to file Point of Objection Notices on the grounds that "exceptional circumstances" under the TRA Regulations, regulation 25(2) existed.
In the interim ruling, the TRA found:
- The Points of Objection Notices were not served in time, as the time for serving a Points of Objection Notice ran from the date the taxpayer gave notice that it wanted a case stated and not from receipt of Points of Objection Notices from the Commissioner.
- The Taxation Review Authorities Act 1994 and Taxation Review Authorities Regulations 1998 did not require the Points of Objection Notices to be supplied by the Commissioner to the taxpayer.
- While the Commissioner provided an incorrect date for service, this did not affect the outcome as the Points of Objection Notice was still supplied out of time.
In the interim ruling, Judge Barber reviewed the law addressing what constituted exceptional circumstances. While he accepted (at ) that it is regulation 23 of the TRA Regulations that must be complied with, he considered that the incorrect address on Inland Revenue's Points of Objection Notice form and advice as to the time period for filing the form may amount to exceptional circumstances.
The TRA directed that the hearing be reconvened as more evidence was required.
The TRA found as follows.
The last day for Inland Revenue to receive the Points of Objection Notice was on 23 July 2008. The Points of Objection Notice was posted to the address on Inland Revenue's form supplied to the tax agent on 11 July 2008, but it was put by counsel for Inland Revenue that it was only received on 28 July 2008. Judge Barber stated that he had no reason to disbelieve the tax agent's evidence, and found that in the ordinary course of mail the Points of Objection Notice for taxpayer 1 must have been received by Inland Revenue well within time.
The last day for Inland Revenue to receive the Points of Objection Notice seems to have been 16 July 2008. The tax agent stated that he posted the Points of Objection Notice on 15 July 2008, but it was only received by Inland Revenue on 18 July 2008. Judge Barber commented that in his experience of the ordinary course of New Zealand mail: "it is a little surprising that the Points of Objection Notice seems to have not been received by [Inland Revenue] on 16 July 2008". Judge Barber also considered that the arrangements for receipt of Points of Objection Notices by Inland Revenue were rather unsatisfactory and stated that he could not be sure that the Points of Objection Notice was not received until 18 July 2008.
Judge Barber found that the Points of Objection Notice was posted well after the due date and that there seemed to be no meritorious explanation for the tax agent having got into that position.
Judge Barber noted his concern that the Points of Objection Notice forms supplied by Inland Revenue did not comply with the physical street address requirements in regulation 23 of the TRA Regulations. Judge Barber considered that if the Points of Objection Form had the correct physical address, then the tax agent may have arranged for personal service or couriering to that address. Further, Judge Barber considered that the tax agent could not have anticipated the confusion in arrangements for receipt of service of the Points of Objection Notices at Inland Revenue and that the tax agent appears to have complied with accepted standards of business organisation and professional conduct regarding the Points of Objections Notices for taxpayers 1 and 2.
Judge Barber held:
- It may be stretching the point to find that there was an event or circumstance beyond the control of the particular disputant which reasonably justifies not filing the Points of Objection Notice in time; but that event of circumstances was to leave matters to the tax agent JGR and I have covered the reasons for his predicament. 
The TRA granted the necessary extensions sought by taxpayer 1 and 2, but declined the application for taxpayer 3.
Taxation Review Authorities Regulations 1998, regulations 21(1), 23(a) and 25(1)