Beach v General Commissioners of Income Tax for Willesden
| Jurisdiction | England & Wales |
| Judgment Date | 23 October 1981 |
| Date | 23 October 1981 |
| Court | Chancery Division |
Chancery Division.
The taxpayer appeared in person.
The Commissioners did not appear and were not represented.
Mr. M. Hart (instructed by the Solicitor of Inland Revenue) for the Crown.
Before: Walton J.
Income tax - Penalty for failure to comply with notice to furnish particulars - Whether notice requiring documents valid - Whether taxpayer had effectively withdrawn his appeal against estimated assessment - Taxes Management Act 1970 section 8Taxes Management Act 1970 - sec. 8; Taxes Management Act 1970 section 50 subsec-or-para (6) section 50 subsec-or-para (7)50(6), (7); Taxes Management Act 1970 section 51 subsec-or-para (1)51(1); Taxes Management Act 1970 section 53 subsec-or-para (2)53(2); Taxes Management Act 1970 section 54 subsec-or-para (4)54(4).
This was an appeal by the taxpayer from the award of a penalty of £50 made by the General Commissioners for failure to comply with the requirements of a notice issued under Taxes Management Act 1970 section 51sec. 51 of the Taxes Management Act 1970.
The taxpayer had failed to furnish an income tax return for the 1977/78 year and appealed against the estimated assessment which subsequently issued. Shortly before the due date for the hearing the taxpayer wrote to the Commissioners and the Inspector withdrawing his appeal. He received a reply from the Inspector advising that the Inspector did not wish the appeal to be withdrawn and that the Commissioners would be asked to proceed with the hearing set down for 19 November 1980. On the taxpayer not appearing, the Commissioners issued to him a notice underTaxes Management Act 1970 section 51sec. 51 of the Taxes Management Act 1970 requiring him to deliver to them, within 30 days from the date of the notice, his accounts and a computation showing the profits assessable to tax for 1977/78 and any capital allowances claimed.
The requirements of that notice not having been complied with within the time limit, the taxpayer was summoned to appear before the General Commissioners. He failed to appear and accordingly a penalty of £50 - the subject of this appeal - was awarded against him.
The taxpayer contended that the Commissioners had no jurisdiction as he had withdrawn his appeal against the estimated assessment, while the Crown counter-argued that the Inspector had authority to require the appeal to proceed.
The taxpayer further complained against the order to produce particulars, claiming that the period mentioned therein should have been reckoned from the date of receipt rather than the date of its issue; that accounts should not have been required as individuals were not required by law to keep accounts; and that the Commissioners were not entitled to the other particulars required.
The taxpayer also contended that he could not be said to have been summoned to appear before the Commissioners on the day the penalty was imposed as he received only a letter.
Held, appeal dismissed.
1. The Inspector was not required to accept the taxpayer's withdrawal of the appeal against the estimated assessment. The Inspector could, in such an assessment, have undercharged rather than overcharged and, notice of appeal having been given, the Commissioners were entitled to determine the true position.
2. There is no rule requiring a period of notice to date from the delivery of that notice and the taxpayer was given sufficient time to comply with its terms.
3. The request for accounts was within the terms of Taxes Management Act 1970 section 51 subsec-or-para (1)sec. 51(1)(b)of the Taxes Management Act 1970, that section being applicable to individuals. Had the taxpayer not possessed accounts he could have resisted any demand for production, but in this instance the taxpayer was a partner in a firm and accounts of that firm would have been in existence.
4. The request for particulars of the taxpayer's income and capital allowance claims was not against the interests of the taxpayer and the Commissioners were entitled to those details.
5. A person can be summoned by a letter. It is not necessary for there to be a document which says that it is a summons.
Walton J.: This is an appeal by Mr. Beach from the award against him of a penalty of £50 made on the 7th January, 1981, by the Commissioners for the General Purposes of the Income Tax for the Division of Willesden in the County of Middlesex for failure to comply with the requirements of a notice issued under Taxes Management Act 1970 section 51sec. 51 of the Taxes Management Act, 1970, on the 19th day of November, 1980. As I understand it, the situation is that Mr. Beach did not put in an income tax return, as he was bound to do under Taxes Management Act 1970 section 8sec. 8 of the Taxes Management Act, 1970, in respect of the year 1977/78; and that being so, an estimated assessment in respect of that year was made apparently on the 24th November, 1977, by the Inspector of Taxes in the sum of £20,000. Against that assessment Mr. Beach appealed, and the appeal came before the Commissioners on several occasions. It was due for hearing on the 19th November, 1980. Mr. Beach says, incidentally, that the fact that the appeal took so long and was postponed from time to time was not his fault in any way at all; that all the adjournments were asked for by the respondent Inspector of Taxes.
However that may be, shortly before the 19th November, 1980, Mr. Beach wrote to the Clerk to the General Commissioners saying: "Dear Sir, I hereby enclose a copy notice of withdrawal of appeal against the assessment the hearing of which is again listed for hearing on the 19th November, 1980, at Willesden at 2.30 p.m.", and then he gave the reference so that they should be under no dubiety as to what appeal he was talking about. On the same day he also wrote to the Inspector of Taxes saying: "I hereby give you notice that I now hereby withdraw the notice of appeal given herein against the assessment". But on the very day following those letters the...
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