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ΠΑΓΚΥΠΡΙΟΣ ΔΙΚΗΓΟΡΙΚΟΣ ΣΥΛΛΟΓΟΣ
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(1989) 3A CLR 455
1989 April 14
[DEMETRIADES, J.]
IN THE MATTER OF ARTICLE 146 OF THE CONSTITUTION
ANGELOS KALOGYROU,
Applicant,
v.
THE MINISTER OF FINANCE AND ANOTHER,
Respondents.
(Case No. 524/86)
Due inquiry - Taxation - Double taxation agreement between the Republic of Cyprus and the United Kingdom - Information thereunder received by respondent that applicant had an income from a bank account in England - Absence of explanation or contradiction of the information - The information could properly be taken into consideration and relied upon without further inquiry.
The facts and complaint of the applicant in this case can be deducted from the hereinabove Headnote.
Recourse dismissed with costs in favour
of the respondents.
Cases referred to:
Mangli v. Republic (1983) 3 C.L.R. 52,
Georghiades v. Republic (1982) 3 C.L.R. 659,
Pikis v. Republic (1965)3 C.L.R. 131.
Recourse.
Recourse against the income tax assessment raised on applicant for the year 1980.
A. Papacharalambous, for the Applicant.
Y. Lazarou, Counsel of the Republic B, for the Respondents.
Cur. adv. vult.
DEMETRIADES, J. read the following judgment. By his present recourse the applicant challenges the decision of the Commissioner of Income Tax to raise an assessment of the income of the applicant for the year 1980 and his decision that the applicant was liable to pay the sum of £2,770.70 income tax.
The facts of the case are the following:
On the 20th March, 1981, the applicant submitted returns of his income for the year of assessment 1980 and declared as his only income salaries from his employment with Max Trading Ltd. In May 1981, the Commissioner raised an assessment on the applicant for that year and assessed his income from employment as declared by him, plus £170.- other income but no tax was payable on such assessment as the applicant's chargeable income was below the taxable limit.
On the 4th August 1982, the Commissioner, having received information from the United Kingdom Inland Revenue that the applicant kept bank accounts with the branch of Barclays Bank Ltd at 19-2 1 Brooks Street London, W.1, and that interest amounting to Sterling £1,062.50p was paid or credited to his accounts for the year that ended 5th April, 1981, by registered letter requested the applicant to give him full particulars regarding his bank accounts which he kept abroad. The applicant did not reply to this letter and, as a result, the Commissioner sent him a second letter, dated the 5th April, 1983, requesting the same particulars. By letter dated the 10th May, 1983, the applicant informed the Commissioner that all his income, both within and outside Cyprus, had already been declared.
By letter dated the 15th December, 1983, the Commissioner informed the applicant that he had decided to raise an additional assessment for the year 1980 and that he based the tax payable on the following amounts:
£1,150.- income as declared,
Plus (a) £7,000.- capital which was remitted abroad and which was
Considered to be the result of undeclared income, and
(b) £1,000.- interest earned from (a) above.
TOTAL £9,150.-
According to the information supplied to the Commissioner by the United Kingdom Inland Revenue, the applicant was paid or credited with the following amounts of interest for the year that ended on the 5th April, 1981.
£320.07
£275.95
£466.48
TOTAL £1,062.50
On the 27th January, 1984, the applicant objected to the revised assessment.
On the 9th April, 1986, the applicant was interviewed by Officers of the Office of the Commissioner regarding his investments abroad. During the interview it was disclosed to him that they had information that he was keeping deposit accounts with the said branch of Barclays Bank but the applicant, stated that he was not in a position to confirm the existence of the bank accounts with the above Bank.
On the 10th April, 1986, the Commissioner wrote to the applicant and gave him one month's notice to submit to him copies of his bank deposit accounts abroad. In reply applicant's lawyers wrote and informed the Commissioner that their client had no other income other than that disclosed in his returns.
The respondent Commissioner, after considering the objection raised by the applicant, decided to determine, same for the year of assessment 1980, relying on the information received from the United Kingdom Inland Revenue and informed the applicant of his decision by letter dated the 16th June, 1986, enclosing in it notice of the tax payable. As a result, the applicant filed the present application.
The applicant gave evidence, and denied that he kept an account with the Barclays Bank in London and in support of his allegation he referred the Court to a letter received by his counsel from the said Bank in response to a letter of his and which stated that:
"After checking our records on several occasions I can find no trace of an account in the name of A. Kalogyrou during the period of 1980-1986".
I shall here set out the letter of applicant's counsel to the Barclays Bank in London, because I find that it is very material for the present case:
"Dear Sirs,
I have been instructed by my client Mr. Angelos Kalogirou of Euridikis 14, Aglandjia, Nicosia, Cyprus to inform you the following:
The Commissioner of Income Tax of the REPUBLIC OF CYPRUS taxed my client alleging that he was having an account with your Bank for the years 1980-1986.
It is the allegation of my client that he on no occasion had any account with your Bank.
Consequently you are asked to acknowledge receipt of this letter confirming my client's allegations."
It is to be noted that the information given by the United Kingdom Inland Revenue, which is exhibit No. 1 to the written address of counsel for the respondents, gives the name and address of the person to whom the information related as Kalogeros (Mr) Angelos Dimitriou, P.O. Box 2154, Nicosia, Cyprus, whilst, as it appears from his lawyers' letter, which is set out above, the name and address given to the bank is Mr. Angelos Kalogirou, of Euridikis 14, Aglandjia, Nicosia, Cyprus. From only this fact, it is obvious that the Bank, in its search, was looking for an account or accounts kept by a different person than the one which was in their books.
In any event, and despite the original allegation of the applicant that his address in 1980 was not P.O. Box 2154, he did admit that until 1974 this P.O. Box was the address of a company ran by him and his brother and that the same P.O. Box was used by Anax Trading Ltd., his employers at the material time.
The question that poses for decision in the present recourse is whether it was open to the Commissioner to reach the sub judice decision. Counsel for the applicant submitted that the sub judice decision must be declared, null and void as the Commissioner based his decision on wrong facts, in that he ought not to rely on mere information supplied to him, which the applicant could not have the means to trace or check.
It is well settled that an administrative decision is null and void if the administrative organ fails to carry out a sufficient inquiry into all the relevant factors surrounding the case. It is, also, a cardinal principle of administrative law that this Court will never substitute the decision of an administrative organ with its own if such decision was reached after it had made a correct assessment of the factual background of the case and acted in accordance with the notions of sound administration. Further, this Court will never interfere with a decision of an administrative organ if the decision was reasonably open to it.
In reaching my above view I have useful guidance from, amongst others, the following cases of the Supreme Court of Cyprus: Mangli v. The Republic (1983) 3 C.L.R. 52, 56, Georghiades v. The Republic (1982) 3 C.L.R. 659, 669 and Pikis v. The Republic (1965) 3 C.L.R. 131,149.
In the present case the Commissioner received information from the Inland Revenue in the United Kingdom that a person bearing the name of the applicant, and whose address was the same as that used by him at a certain time, had, in 1980, received income from capital deposited with the said Bank in England which the applicant had failed to declare in his returns for that year. The information on which the Commissioner relied upon was received by virtue of a Convention signed between the Republic of Cyprus and the Government of the United Kingdom of Great Britain and Northern Ireland, for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income. This Convention was published in Greek in the Gazette of the Republic No. 1107 of the 5th July, 1974, under Notification No. 1152 and in English in Gazette No. 1148 of the 1st November, 1974, under Notification No. 1608.
By the provisions of Article 26 of this Convention, the competent authorities of the contracting states "shall exchange information for the prevention of fiscal evasion
Once the Commissioner had received the information regarding the income the applicant received in the United Kingdom and which information he passed over to the applicant, and as the applicant, who had all the means to contradict the information of the Commissioner, had failed to do so, I find that it was reasonably open to the Commissioner to reach his decision and that he was not under a duty to carry out a further inquiry into the United Kingdom income of the applicant.
In the result, the recourse is dismissed with costs in favour of the respondents.
Recourse dismissed with costs.