Appropriateness of a decision made by the method of field investigation on a person subject to a written review under the Income Tax Act

With respect to a person liable to pay income tax who is subject to a written examination under Article 119 (1) of the Income Tax Act, the tax base and tax amount without special circumstances shall not be determined by a field investigation method other than a method of written examination, and the Commissioner of the National Tax Service may not establish strict standards other than those prescribed by Acts and subordinate statutes concerning the income tax base

Article 119 of the Income Tax Act, Articles 167(1)2, 164(1)2, and 168(1) of the former Enforcement Decree of the Income Tax Act

Plaintiff’s Attorney Han-chul et al.

Head of Eastern Tax Office

Daegu High Court Decision 77Gu121 delivered on January 19, 1978

The appeal is dismissed.

The costs of appeal shall be borne by the defendant.

The grounds of appeal Nos. 1 and 2 are examined together.

Article 119(1) of the Income Tax Act at the time of taxation of this case provides that a person who has business income and whose gross income exceeds the amount under Articles 168(1)2, 168(1) and 164(1)2 of the Enforcement Decree of the Income Tax Act at the time of taxation of this case shall automatically impose business income for the current year from among those who have filed an adjusted statement prepared by a certified tax accountant under Article 168(1) of the Enforcement Decree of the Income Tax Act at the time of taxation of this case (hereinafter referred to as “the former Enforcement Decree”), the tax base and tax amount of income tax shall be determined by written deliberation (hereinafter referred to as “written examination”) with respect to a person subject to written examination as a taxpayer of income tax shall not be determined by a method other than a written examination, but not by the method of a written examination, and who is against the standards for taxation without the law of the State to limit the imposition of taxation of income under Article 167(1)2 of the former Enforcement Decree, and who is not subject to written examination.

In this case, as duly admitted by the court below, the plaintiff is a person subject to the standard of written review determination under Article 167 (1) 2 of the former Enforcement Decree, and the plaintiff legally submitted a final return of income tax base for 75 years more than the automatic imposition rate within the statutory due date along with the adjusted account statement of a tax accountant pursuant to the law. Accordingly, as long as the defendant decided the tax base and tax amount on the plaintiff as there is no ground for disqualification by conducting a written review by the above return and imposed tax accordingly on the plaintiff, and the plaintiff paid it accordingly, it is unlawful that the Commissioner of the National Tax Service arbitrarily determined the standard of 60% or more than the income subject to the income subject to the standard of written review determination in the current year other than the standard prescribed in Article 167 (1) 2 of the former Enforcement Decree of the former Enforcement Decree of the Income Tax Act, which is disadvantageous to the taxpayer without the legal basis and thus, even if the amount returned by the Commissioner of the National Tax Service falls short of the above standard of written review determination.

Although the original judgment is somewhat lacking in the statement on the grounds for correcting the tax base and amount of tax, it is justifiable to determine that the corrective disposition of this case became unlawful on the ground that the corrective disposition of this case was without legitimate grounds for correction.

As seen earlier, in view of the view that the Commissioner of the National Tax Service set more strict standards than those stipulated in the laws and regulations on objects subject to the determination of the income tax base and tax amount and measures on the spot investigation are legitimate, he/she cannot be employed as it criticizes the judgment based on the legitimate original judgment.

Therefore, the appeal is dismissed and the costs of the appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Kim Young-chul (Presiding Justice)