Supplementary summaries on behalf of the appellant regarding the additional evidence were submitted on March 12, 2025. Supplementary summaries on behalf of the respondent in connection with the additional evidence were submitted on March 27, 2025.
- As stated above, on April 1, 2025, committee member Mr. Kachon disqualified himself from continuing to sit in the appeals in question, and the continuation of the hearing of the appeals waited until the appointment of Mr. Ilan Tamam as a committee member, at which point, as stated, a supplementary hearing was held on September 7, 2025.
Summary of the appellant's arguments:
- The arguments regarding the amendment of the assessment:
- The respondent should be instructed to amend the self-assessment submitted by the appellant, due to a legal error that was discovered. The appellant did not receive tax advice regarding "buyer's price" transactions prior to reporting to the respondent and assumed, in light of the title of the lease contract, that it was the purchase of a "right in real estate" and therefore reported and paid the purchase tax accordingly.
- During 2019, the appellant was brought to the attention of external tax consultants that there was a fundamental legal error in the self-assessments it submitted, and that the rights that are the subject of the "Buyer's Price" tenders are not a "right in real estate", in the sense Real Estate Taxation Law. For this reason, the appellant filed motions to amend the assessment, within the time limits set by law, in accordance with the Section 85(a)(3) to the law.
- The case law held that Section 85(a)(3) The Real Estate Taxation Law refers to any type of mistake that occurred during the preparation of the assessment – factual or legal, whether it is for the benefit or detriment of the taxpayer.
An assessment amendment may be made at the Respondent's initiative or at the request of the taxpayer, to the extent that it is carried out within the framework of the 4-year period from the date of approval of the assessment, all for the purpose of fulfilling the public interest of paying real tax.
- The appellant's mistake is a clear legal error, due to the incorrect application of the law to the facts, which are not in dispute, on the question of whether it is at all a matter of granting a "right in real estate", which is subject to purchase tax. The appellant, like other contractors who participated in the "Buyer's Price" tenders, made the mistake of thinking that since she had signed a lease contract, in which a lease period of 98 years was indicated, it was the purchase of a "right in real estate" that is subject to the payment of tax. However, in accordance with the law, the rest of the documents signed by it – the appendix to the special conditions and the building contract, the provisions of which supersede the provisions of the lease contract – include conditions unique to the "Buyer's Price" tenders, which show that, contrary to the initial reasoning, no "right in land" within the meaning of the law was purchased.
- The respondent is wrong in his claim that the appellant did not mention the subsection of the Section 85(a) to the law, which refers to the cause of the amendment. The appellant explicitly marked in each of the application forms for amending the assessment in the appropriate square that she wishes to amend the assessment according to Section 85(a)(3) to the law. Even after she clarified this and confronted the respondent's witness, Mr. Roni Barak (hereinafter – Mr. Barak or Respondent's witness) with the documents – the latter entrenched himself in his erroneous position. In any event, it emerges from the detailed application to amend the assessment that the appellant claims a legal error as the cause of the amendment.
- The respondent's position stands in direct contradiction not only to the case law regarding the correction of an assessment on the grounds of an error discovered in it, but also to the consistent position of the respondent himself – in cases where he is the one who seeks to correct his assessment.
The respondent's argument that the application to amend the assessment should be rejected because all the facts and data were known to the appellant at the time of the submission of the self-assessment is erroneous, because the ground for the amendment is not the discovery of new facts; The law expressly allows the filing of a request to amend an assessment by the taxpayer himself – "a person who paid tax" – and not only at the initiative of the respondent; The motion to amend the assessment does not contradict documents signed by the appellant, as the respondent claims, but rather it is based on these documents with an explanation of the mistake that occurred in the application of the law to the facts that arise from the documents.
- The appellant did not correctly analyze the right granted to it in the contractual system signed by it after it won the "Buyer's Price" tenders, and therefore mistakenly reported the purchase of a "right in the land". According to the law, the reason for the mistake is irrelevant.
In all cases in which the court allowed an assessment to be amended, it did not examine the reason for the error, i.e., whether the state or the taxpayer was negligent and could not have made a mistake if they had taken reasonable measures. The respondent's argument that the reclassification of the transaction does not fall within the scope of a legal error also contradicts case law and his own positions in the past. The fact that the appellant was represented at the time of the submission of the self-assessment has nothing to do with it, since the appellant did not receive tax advice, and in any case this argument is invalid, since the respondent himself, who is an expert in real estate taxation, was given the option according to the case law to amend an assessment due to a legal error, when the balance of interests that is being carried out is between the interest of collecting real tax and the interest of reliance of the taxpayer or the respondent.
- Alternatively, even if it were necessary to examine the reason for which the appellant made a legal error, there is still room to amend the assessment. Although the appellant wins standard tenders for the purchase of land and enters into standard lease agreements with the ILA, in the case at hand this is a precedential issue, which has not yet been decided in connection with the nature of the right acquired by the contractor in the "Buyer's Price" tenders.
It is not possible to complain to the appellant for failing to first identify, in the framework of the self-assessment, the fact that the aforementioned unique contractual system excludes the acquired right from the scope of the Real Estate Taxation Law. There is evidence that all the other contractors who won the "Buyer's Price" tenders also made a mistake in this matter, and therefore this is a reasonable mistake.
- The appellant forwarded the tender documents to its legal advisors, who accompany it on an ongoing basis in standard real estate transactions, which are not tax experts. In complex tax issues, the appellant turns to external consultants who specialize in complex tax situations. In the case at hand, of the "Buyer's Price" tenders, the appellant (as well as other contractors) did not notice in real time the significance of the different taxation that arises from the tender documents, and only after receiving legal advice from external tax experts did she notice the legal error that occurred in the self-assessment and applied for its correction. Failure to refund the purchase tax paid by the appellant is contrary to the law and constitutes unlawful enrichment of the respondent.
- The appellant's CEO is the most appropriate party to testify regarding the issue of the legal error, and his testimony is personal knowledge of the legal error that the appellant has encountered. Therefore, the testimony of the appellant's CFO or of the transfer of a hearing venue from the Firon firm that reported the transaction to the respondent was not required, since they do not have information that could have assisted in the decision.
- The arguments on the merits:
- There is no basis for the respondent's argument that the appeals should be dismissed due to judicial estoppel. The appellant's arguments in this appeal do not contradict the contractual system that she signed after winning the "Buyer's Price" tender, and she does not seek to change the said agreements, but rather the opposite. The Appellant relies on the provisions of the agreements signed with the State following the winning of the "Buyer's Price" tender in order to clearly show that it did not purchase from the State a "right in the land" in the sense Real Estate Taxation Law. It is precisely the respondent's position that contradicts the language of the agreements, since it ignores the provisions in which it was determined that the appellant must sell the land to those entitled to lotteries in accordance with the rules of the state and the many and unique limitations set out in the agreements regarding the ability to hold and the limited use of the land, over a short period.
- Acceptance of the appellant's position in the present appeals will not bring about any change in the situation of third parties, such as apartment buyers. The appellant's position stems from drawing legal conclusions from the provisions of the contractual system, regarding the purchase tax liability. Accepting this position will not harm or cause a change in the rights purchased by the eligible people who won the lottery and purchased apartments in the "Buyer's Price" projects. There is no dispute that the tenants received a lease right as defined in the law.
There is also no difficulty in the fact that the appellant transferred to the tenants a lease right as defined in the law, even though it itself did not hold a lease right as defined in the law. The appellant received from the state a limited and "thin" lease right, which does not amount to a "lease" in the sense of the Real Estate Taxation Law, but the state transferred to the appellant the ability to transfer the lease right or the ability to undertake that the tenants would receive the full lease right from the state, without the restrictions imposed on the appellant personally. The appellant served as a "conduit" for the state for this purpose.