Taxation — objection — whether, by raising objection, taxpayer entitled to also object to earlier assessments and assessor obliged to correct error or omission in earlier assessments — proper construction of s. 70A(1) — Inland Revenue Ordinance (Cap. 112), ss. 64(1), s. 64(1)(c), 70A(1)
T filed a profits tax return for the 2003/2004 year of assessment resulting in: (a) an assessment in September 2004; (b) an additional assessment in January 2005; and (c) a further assessment in March 2010 which was a “reassessment” within the meaning of s. 64(1) of the Inland Revenue Ordinance (Cap. 112). Under s. 64(1), a taxpayer had one month from the date of assessment to make a written objection. Under proviso (c) to s. 64(1), where the assessment was a reassessment, any right of objection was limited to any “fresh [tax] liability” brought about by the reassessment. T objected to only the March 2010 assessment by a letter in April 2010 (the “2010 Objection”) and a determination was made in October 2012 confirming the March 2010 assessment. T sought a judicial review of various decisions of the assessor, arguing that by reason of the March 2010 assessment and the 2010 Objection, it was entitled to object to the September 2004 and January 2005 assessments, despite the expiry of the prescribed time period. T submitted that the 2010 Objection was an application within six months of the March 2010 assessment under s. 70A(1) and this provision required the assessor to correct inter alia any “arithmetical error or omission in the calculation of the amount of net assessable value ... assessable income or profits assessed or in the amount of the tax charged for any excessive tax charged” not only in the March 2010 assessment, but also in the September 2004 and January 2005 assessments.
Held, dismissing the application, that:
- Section 70A(1) of the Ordinance was not intended to confer on the taxpayer a right to seek a general correction of assessment(s) for the same year of assessment. Such a construction would effectively render proviso (c) to s. 64(1) otiose. Section 64(1) was intended to restrict a taxpayer’s right to object only to a fresh liability resulting from the reassessment of tax due.
- Section 70A(1) was intended to have a narrow coverage; and the word “omission” in the phrase “arithmetical error or omission” did not refer to any omission, but only an “arithmetical omission”.