The AAT has ruled that it has jurisdiction to review a decision by the Tax Commissioner not to make a determination to disregard or reallocate excess superannuation contributions after finding that s 292-465(9)(a) of the ITAA 1997 was “manifestly absurd”.
The Tax Office issued the taxpayer with an excess non-concessional contributions tax assessment. The taxpayer applied for the Commissioner to exercise his discretion under s 292-465 to disregard the excess contributions but the Commissioner decided not to make such a determination. The taxpayer then applied to the AAT for review of the Commissioner’s decision to disallow his objection. The AAT was required to determine the preliminary issue of whether it had jurisdiction to review a decision not to make a determination under s 292-465.
As reported in Thomson Reuters Latest Tax News, the AAT found that the wording of s 292-465(9)(a), which provides that a person may object only “on the ground that you are dissatisfied with a determination that you applied for under this section”, was “manifestly absurd”. The AAT noted that a person would never be dissatisfied if the Commissioner made the determination that the person asked for. So, if the words were given their ordinary meaning, the only taxpayers entitled to object could not do so, the AAT said. In finding that the provisions were manifestly absurd, the AAT relied on the powers under the Acts Interpretation Act 1901 to use extrinsic material, namely the Superannuation Legislation Amendment Bill 2010, to give the words their intended meaning.
The AAT considered that this jurisdictional issue was similar to the situation that arose in FCT v Administrative Appeals Tribunal (2011) 82 ATR 663. In that decision, the Full Federal Court upheld the finding in Re McMennemin and FCT  AATA 573 that the AAT did not have jurisdiction to review the Commissioner’s refusal to make a determination. To overcome this problem, the Superannuation Legislation Amendment Act 2010 amended s 292-465 from 17 November 2010 to allow the Commissioner to make a determination to disregard or reallocate contributions without first issuing an assessment. However, this latest AAT decision suggests that the wording of s 292-465(9)(a) is still flawed in this respect.