The Honorable Justice Jubran also referred in his aforementioned judgment in the Marom case to the Income Tax Authority's file and to the interpretation given by the Income Tax Commission itself to the scope of the exercise of the authority under section 147 of the Ordinance by the Director of the Tax Authority (paragraph 38 of the Marom judgment):
"The internal guidelines of the tax assessor also stipulate that the authority to open the assessment according to Article 147 It will not be done as a matter of routine and that it will be done only in exceptional cases:
"It should be emphasized that, as a rule, section 147 will be used only in exceptional cases, and after thorough and exhaustive consideration of the issue in all its aspects, both aspects relating to the specific case in respect of which the question of opening the assessment is being examined, as well as general aspects relating to the rules of proper administration and the considerations of proper public policy.
Thus, for example, the process of opening an assessment should not be taken where such a procedure will not lead to an increase in tax of substantial amounts, and thus the proceeding should be avoided if the assessment that is requested to be opened is an assessment in the agreement (unless the agreement is based on erroneous or missing information). In addition, a procedure for opening an assessment should not be taken where after the assessment was issued, a different position was determined in case law or in the Department's guidelines than that taken in that assessment, but that position was discussed on its merits in the framework of the assessment proceedings and a positive decision was made in connection with it." (Commentary to the Income Tax Ordinance (The Embrace), Ronen Publications, pp. 9-19.4).
See also the reference of the Honorable Justice Y. Alon in Tax Appeal 504/09 Itamar Mahlab v. Beer Sheva Assessor (July 26, 2010) in paragraphs 7-10 of the judgment.
- Thus, it can be seen that when the Tax Authority is of the opinion that there is room for an interpretation that imposes limitations or limitations on the exercise of the power to amend an assessment, it expresses this position within the framework of the provisions of its interpretation of the provision of the law establishing the power to amend the assessment. This is how the Tax Authority acted in all matters related to the authority of the Director of the Tax Authority to operate the Article 147 to the Ordinance and determined that the exercise of the authority would be done sparingly and in exceptional cases.
However, as stated above, none of the provisions of the interpretation in real estate taxation, which relates to the authority of the amendment under Article 85 The Real Estate Taxation Law does not prescribe such restrictions or limitations for the exercise of the authority – both when it comes to an amendment initiated by the Real Estate Taxation Administration and when it comes to an amendment at the request of a taxpayer.
- I will note at the outset that the Appeals Committee is not, of course, bound by the Tax Authority's Execution Instructions or the Tax Authority's Interpretation Provisions, and the work of interpretation is entrusted by law to the Appeals Committee, but it is certainly possible to relate to these execution instructions and interpretation in order to indicate the Respondent's own professional and interpretive position and its implications for the argument raised by him in the framework of the appeals in this case.
See in this regard: Judgment Marom In Saifat paragraph 38; Civil Appeal Authority 3527/96 Axbalard v. Property Tax Administrator, P.D. 52(5), 385, 407-408 (1998)).
- In any event, it is not for nothing that there is no interpretive provision that establishes limitations and limitations for amending the assessment according to Article 85 to the law, such as those that exist in relation to the Article 147 to the command. The reason for this is that there is no room for comparison, according to the comparison made by the respondent in the appeals in this case, between the amendment of the assessment according to Article 85 of the Real Estate Taxation Law and the opening of the assessment under Article 147 to the Income Tax Ordinance, neither procedurally nor substantively.
- Thus, the authority to amend according to Article 147 The Ordinance is entrusted to the "Manager" as he defines it. In Section 1 and section 229 For the Ordinance – that is: the Director of the Tax Authority (or anyone who has his authority – when usually officials from the Professional Department of the Tax Authority are authorized) and not by the Tax Assessor himself. As can be seen from the case law dealing with the power to amend the Article 147 According to the Ordinance, it is the authority of the Director to audit the Tax Assessor.
In contrast, the power to amend under section 85 The Real Estate Taxation Law is vested in the "Administrator" as defined in section 1 to the Real Estate Taxation Law, which relates to the director of a real estate taxation office in each area, or to a person authorized by that director. In other words, an entity within the Real Estate Taxation Office – the director of the ministry (or officials from the ministry itself, supervisors or coordinators, or the deputy director, who have been authorized by the director) – has been authorized to amend assessments according to the section 85 to the law, which was issued by the same real estate taxation office.
- The differences between the entities authorized to carry out an assessment correction in the Income Tax as opposed to Real Estate Taxation lie in the substantial difference between the report to the tax assessor and the report to the Real Estate Taxation Administration.
A report and self-assessment submitted to the tax assessor actually include a summary of business conduct Yearly A taxpayer's comprehension, as expressed in the registration made in the taxpayer's ledgers and bookkeeping books, in his balance sheet and profit and loss statement, and while the approval of an accountant is required for the financial statements submitted. Moreover, income tax returns are submitted by taxpayers every year, and they embody and reflect not only the business conduct of the reporting year, but also show, in general, the continuity of business conduct in relation to previous years, so that the reports can also be audited from a broad perspective of the previous tax years and of the taxpayer's business in general.