[1] The purpose of Article 119(1) of the former Income Tax Act, which requires the tax authority to determine the tax base and the amount of tax in writing in cases where the final return of tax base is filed along with the adjusted account statement prepared by the tax accountant, etc., and the requirements for the tax

[2] In a case where a person subject to a written investigation decision under Article 119 of the former Income Tax Act filed a final return on the tax base with an adjusted account statement of a certified tax accountant, etc., but it is deemed clearly unreasonable to make the tax base and tax amount determined only by a written investigation because he/she could easily find out any deficiencies or errors in the tax return, etc. submitted by him/her in the course of a tax investigation, etc. on other taxpayers

[1] Article 119(1) of the former Income Tax Act (amended by Act No. 4803 of Dec. 22, 1994) provides that only certain persons liable for tax payment, such as those who trust the amount of income reported or who can be easily calculated, shall determine the tax base and the amount of tax in writing with an adjusted account statement prepared by a certified tax accountant, etc., if they submit the final tax base return along with the adjusted account statement prepared by him/her, reliance on those subject to written investigation and income statement to verify that the entries in the final tax base return are correct, thereby allowing the Government to conduct a field investigation on behalf of them by preparing and submitting an adjusted account statement that the entries in the final tax base report are correct. As such, it is significant that the tax base and the amount of tax were completely prepared and processed without any ground such as evidentiary documents, or that the amount of tax was completely omitted or that the details of the tax was objectively found to have been found to have been found to have been incomplete by the former tax base and the amount of tax on the spot investigation without any reason for such written investigation or correction.

[2] According to Article 119(2) and (3) of the former Income Tax Act (amended by Act No. 4803 of Dec. 22, 1994), unlike the previous one, Article 119(2) and (3) of the former Income Tax Act (amended by Act No. 4803 of Dec. 22, 1992) provides that not only a return submitted but also a return submitted by a person subject to a written investigation, etc. but also a certain case of deficiencies or errors in other documents may not be determined by a written examination. In full view of the provisions of Article 127 of the Income Tax Act and Article 182-2 of the Enforcement Decree of the same Act (amended by Presidential Decree No. 1467 of Dec. 31, 1994), even in cases where a person subject to a written examination and decision, accompanied by an adjusted account statement of a tax accountant, etc., if the person submitted a written investigation or other documents, and it can be easily determined or corrected through a written investigation or estimate.

[1] Article 119 of the former Income Tax Act (amended by Act No. 4803 of Dec. 22, 1994) (see current Article 80), Article 168-2 (3) of the former Income Tax Act (amended by Presidential Decree No. 14467 of Dec. 31, 1994), Article 168-2 (3) of the former Income Tax Act (amended by Presidential Decree No. 14467 of Dec. 31, 1994), Article 169 (see current Article 143 (1) of the Income Tax Act), Article 182-2 (see current Article 143 (3) of the former Income Tax Act) / [2] Article 119 of the former Income Tax Act (amended by Act No. 4803 of Dec. 22, 1994), Article 127 (2) of the former Income Tax Act (see current Article 80 (2) of the Income Tax Act), Article 1384(136-4) of the former Income Tax Act (amended by Presidential Decree No.

[1] [2] Supreme Court Decision 96Nu14227 delivered on July 10, 1998 (Gong1998Ha, 2148) / [1] Supreme Court Decision 86Nu348 delivered on March 24, 1987 (Gong1987, 745) Supreme Court Decision 94Nu11200 delivered on December 8, 1995 (Gong196Sang, 423), Supreme Court Decision 96Nu4701 delivered on March 28, 1997 (Gong197Sang, 1277) / [2] Supreme Court Decision 96Nu16568 delivered on November 28, 197 (Gong198, 1699)

Plaintiff (Attorney Kim Ba-young, Counsel for the plaintiff-appellant)

Head of North Busan District Tax Office

Busan High Court Decision 97Gu2535 delivered on November 19, 1997

The judgment below is reversed, and the case is remanded to Busan High Court.

The grounds of appeal are examined.

1. Article 119 (1) of the Income Tax Act (amended by Act No. 4520 of Dec. 8, 1992; hereinafter referred to as the "Act") provides that when a business operator who files a return or other documents submitted under paragraph (1) lack of documents or errors, the tax base and tax amount may be calculated on the basis of books and documentary evidence kept and recorded in the final tax base return, and where a business operator who files a return with an adjusted account statement confirmed by a certified tax accountant (including certified tax accountants registered under Article 6 of the Certified Tax Accountant Act) that the entries therein are reasonable and meets the standards prescribed by the Presidential Decree, the tax base and tax amount may be determined in writing, notwithstanding the provisions of Article 118, and Paragraph (2) of the same Article provides that where a business operator fails to submit the corrected documents or makes a determination of tax amount by revised documents, the tax base and tax amount may be determined in writing and tax amount may be determined in accordance with the Presidential Decree No. 1961, Dec. 16, 1997>

On the other hand, Article 127 of the Act provides that if a business operator who has received a written investigation decision pursuant to Article 119(1) of the Act confirms any omission or error after he/she is unable to determine the tax base and amount of tax pursuant to Articles 117 through 120 of the Act, or finds such omission or error, the Government shall, without delay, investigate the tax base and amount of tax and make a correction thereof, and Article 182-2 of the Enforcement Decree provides that if it is confirmed that the business operator falls under any of the following subparagraphs, he/she may correct the tax base and amount of tax pursuant to Article 127 of the Act, and Article 169(1) of the Act provides that cases falling under any of subparagraphs 1 and 1

2. In cases where only a person liable to pay income tax, such as a person who is able to trust the amount of revenue reported under Article 119(1) of the Act, or whose total amount of revenue is easily calculated, files a final return of tax base and the amount of tax in writing with an adjusted account statement prepared by a tax accountant, etc., the determination of the tax base and the amount of tax should be made through a written examination. The Government conducts on-site investigation by having a tax accountant, etc. prepare and submit an adjusted account statement verifying that the entries in the final return of tax base are correct in accordance with the tax base investigation and the income statement by trust of the person subject to written investigation, tax accountants, etc., and thus, the government has significance in raising the efficiency of tax administration and promoting the convenience of taxpayers. Therefore, it is evident that the adjusted account statement was prepared at all false and processed without any ground such as evidential documents, or that the amount of tax was returned at all, but it is objectively evident that the details of the tax base and the amount of tax were reported, but it is unreasonable to determine only the tax base and the amount of tax base and the tax amount of tax amount by a written investigation.

In addition, Article 119(3) of the Act and Article 168-2(3) of the Enforcement Decree of the Act stipulate the reasons why the decision is not made in writing, and Article 182-2 of the Enforcement Decree of the Act stipulates the reasons why the decision of correction is made to the person who made a written investigation. However, as seen above, it is based on the premise that there is any ground that it is unreasonable to determine the tax base and tax amount solely on the basis of the tax base and tax amount, such as where it is evident that the adjusted account was completely or falsely prepared without the basis of documentary evidence, or where it is evident that the revenue was entirely omitted or omitted from the beginning without the content of the report, or where it is objectively evident that the details of the

However, as amended on December 8, 1992, Article 119(2) and (3) of the Act provides that, in making a written review decision different from the previous one, not only the report submitted but also any deficiencies or errors exist in other documents, the decision may not be made in writing in certain cases. In full view of the provisions of Article 127 of the Act and Article 182-2 of the Enforcement Decree above, even in cases where a person subject to a written review decision under Article 119 of the Act files a final return with an adjusted account statement of a tax accountant, etc., even if the person subject to a written review decision under Article 119 of the Act denies the content of the person subject to a written review decision and arbitrarily submitted the final return along with the adjusted account statement of a tax accountant, etc., the report or other documents submitted by the relevant person subject to a written investigation decision may be determined or corrected by the on-site investigation or the estimated investigation, if it is clearly deemed that the decision solely based on a written investigation is inappropriate even if

3. According to the facts established by the court below in this case, when the plaintiff operating the machinery parts manufacturing and sales business files the final return on global income tax base in 1993, business income amount is KRW 92,70,260 after deducting KRW 1,579,269,70 from the total income amount of KRW 1,671,971,961,961, and the total income amount is KRW 90,941,960 from the total income amount of KRW 90,941,960 from the total income amount was added to the adjusted invoice prepared by the tax accountant upon filing a return on global income tax base at KRW 7,176,136. The defendant determined the tax base and tax amount based on a written review by the plaintiff that the plaintiff fell under the criteria for the determination on the written investigation, but the Busan District Tax Office received the final return on global income tax base in March 1995 from the plaintiff's raw material purchaser, and the plaintiff's actual tax amount was not stated in the final return on the tax base of KRW 1950.

Nevertheless, even if the Plaintiff reported excessive appropriation of necessary expenses, the lower court determined that the Defendant’s rectification of the tax base and tax amount by on-site investigation is illegal on the ground that there is no objective clear evidence that the Plaintiff committed omission or error in the content itself, or there is no other evidence to deem that there was any formal defect or error in the content of the report, even though it was included in the content of the report. Therefore, the lower court erred by misapprehending the legal doctrine on the written investigation decision and decision of correction, thereby adversely affecting the conclusion of the judgment. The grounds of appeal assigning this error are with merit

4. Therefore, the lower judgment is reversed, and the case is remanded to the lower court. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Shin Sung-sung (Presiding Justice)