The question of whether he could have known about the correct legal situation, according to the approach of the applicant/the person making the amendment, means the introduction of a criterion of examination of whether or not there was negligence in reporting or issuing the assessment, from a legal point of view. This criterion requires, prima facie, an examination of the quality of the legal or professional advice given to the party requesting the repair.
- In my opinion, and as a matter of proper and correct judicial policy, there is no substantive basis, in the framework of a real estate tax appeal, to clarify the question of whether the legal advice given was correct or wrong at the time. Certainly when the appellant does not raise such a claim against the law firm that handled the reporting to the respondent and the submission of the self-assessment on her behalf. Moreover, I am of the opinion that there is a real difficulty in implementing such a test. What will be the "objective" criterion for examining the existence of a legal error? Should the manager be convinced that a reasonable professional lawyer would not have made the same mistake? Does the respondent have the tools or authority to assess such a matter? And if we are dealing with a matter of professionalism and reasonableness – shouldn't we demand from the respondent, who is held to have extensive expertise and experience in the field of taxation, a stricter standard with regard to the occurrence of legal errors?!
- In any event, and with regard to the case at hand, I am of the opinion that the appellant sufficiently presented to the committee the reason why her declaration in the framework of her self-assessment was that she acquired a right in the land, as well as the chain of events that led to the filing of the motions to amend the self-assessment, on the grounds that she did not acquire a "right in the land" in the sense Real Estate Taxation Law.
- The appellant submitted an affidavit of the principal witness of Mr. Arnon Friedman (Exhibit A/2), who has served as the appellant's CEO since 2008. Mr. Friedman declared facts known to him by virtue of his position as the appellant's CEO, from examinations he conducted at Ashdar and from documents presented to him (see paragraph 2 of Mr. Friedman's affidavit).
Mr. Friedman stated that in transactions of the purchase of lease rights from the ILA, the appellant generally does not consult with tax experts or receive specific tax advice on the nature of the transaction and whether it is a matter of purchasing a right in real estate within the meaning of the law. It was further stated by Mr. Friedman that the appellant acted as she does in cases of the acquisition of lease rights in ILA tenders, which bear the title "lease contract", and reported to the respondent shortly after winning the tenders for the buyer's price, the subject of the appeals, for the purchase of a right in the land and paid a purchase tax of 6% in respect of the land component. Mr. Friedman noted that the entity that reported on behalf of the appellant about its winnings in the Mehir LaMishtaken tenders did not refer to the provisions of the building contract and the appendix to the special conditions, nor did he relate to the unique characteristics and the real legal and economic nature of these documents.
- Mr. Friedman stated on behalf of the appellant that during 2019 she received legal advice from external tax experts, from whom she learned that there was a fundamental error in her self-assessments and that the rights, which she received in the framework of the "Buyer's Price" tenders that she won, do not amount to a "right in real estate" within the meaning of the Real Estate Taxation Law, and that in accordance with the aforesaid legal advice, requests were submitted by the appellant to amend the assessment and cancel the purchase tax assessments. With regard to the land on which the appellant built apartments as part of the "Buyer's Price" project.
- In his cross-examination of November 2, 2022, Mr. Friedman noted that when the appellant executes a real estate transaction, she is usually accompanied by the Firon Law Office, and that in transactions involving the purchase of land from the state and ILA tenders, the appellant is usually not provided with additional advice (page 25 of the transcript, lines 20-23, page 26, lines 1-4). Mr. Friedman further testified that he did not know who was the entity in the Firon law firm that was involved in reporting to the respondent, and that sometimes even interns from the Firon law firm are the ones who accompany the appellant's CFO, who is the reporting entity for the appellant, who is assisted by the Firon law firm for this purpose (page 26, lines 10-17).
Mr. Friedman reiterated his testimony and emphasized that the appellant, as well as the Firon law firm that accompanied her in the reports to the respondent, did not believe that this was an exceptional tender from a taxation point of view: