Whether a new assertion can be made in a lawsuit seeking revocation of a disposition rejecting correction for reasons not alleged in the request for reduction correction (affirmative)

Article 45-2(1)1 and (3) of the former Framework Act on National Taxes (amended by Act No. 6303, Dec. 29, 2000)

[Plaintiff-Appellant] Plaintiff 2002Du9261 delivered on August 16, 2004 (Gong2004Ha, 1550)

Seoul High Court Decision 201Na14488 delivered on August 2, 2012

Head of Suwon Tax Office

Supreme Court Decision 2007Du19683 Decided December 10, 2009

Seoul High Court Decision 2009Nu39560 decided June 8, 2010

The appeal is dismissed. The costs of appeal are assessed against the defendant.

The grounds of appeal are examined.

1. As to the grounds of appeal Nos. 1 and 2

Where the total amount of losses that belongs or comes to belong to a business year exceeds the total amount of gains that falls under the business year, such excess amount constitutes losses under the Corporate Tax Act, and only the amount investigated as losses at the time of confirmation such as the final return of tax base, etc. of a corporation or the tax base, etc. according to an investigation or determination by the government, etc. (see Supreme Court Decision 2001Du2652, Nov. 26, 2002, etc.).

In addition, the tax authority, upon receiving a request for correction, has the duty to investigate and confirm whether the tax base and amount recorded in the tax base return exceed the objectively legitimate tax base and amount to be reported under the tax laws. As such, in a lawsuit seeking revocation of a tax disposition, the object of the trial is the objective existence or absence of the tax base and amount recorded in the tax base return, as in the ordinary lawsuit seeking revocation of a tax disposition. Therefore, inasmuch as the individual unlawful grounds for recognizing the tax base and amount of tax are merely the means of attack and defense claiming that the tax base and amount of tax are reasonable, the individual unlawful grounds for claiming the correction of a tax amount are merely the means of attack and defense claiming that the tax base and amount of tax are reasonable, and the matters that were not claimed at the time of the request for correction of a tax amount are not all asserted as to the individual unlawful grounds in filing the request for correction of a tax amount,

In light of the above legal principles and the facts acknowledged by the court below, although the exact causes or developments leading up to the loss carried forward of this case were not revealed, at least, the loss corresponding to the loss carried forward of this case occurred to the plaintiff before the actual inspection was carried out as of December 31, 1992. Since it is clear that the loss carried forward of this case was not deducted from the tax base after the business year 1993 or compensated for other profit exempted from other obligations, it is reasonable to view that the loss carried forward of this case remains as it was carried forward until the profit exempted from the above debt of January 11, 2001, even though the loss carried forward of this case was not entered in the balance sheet and the profit and loss statement after the business year 1994. Thus, the loss carried forward of this case constitutes the loss carried forward of Article 18 (1) 1 of the Enforcement Decree of the Corporate Tax Act, and even if the plaintiff did not claim the loss carried forward of this case at the time of filing a request for reduction of corporate tax for the business year 2001.

The judgment below to the same purport is just, and contrary to the allegations in the grounds of appeal, there were no errors in the misapprehension of the legal principle regarding the revocation lawsuit against the rejection of correction, or in violation of logical and empirical rules.

2. As to the third ground for appeal

The argument in this part of the grounds of appeal argues that the court below determined that the carried-over loss of this case constitutes a carried-over loss under Article 18 (1) 1 of the Enforcement Decree of the Corporate Tax Act, and that it constitutes a loss confirmed by the liquidation court under Article 18 (1) 2 of the Enforcement Decree of the Corporate Tax Act.

However, as seen earlier, insofar as the lower court’s determination that the instant carried-over loss constituted a carried-over loss under Article 18(1)1 of the Enforcement Decree of the Corporate Tax Act is justifiable, the propriety of such additional determination cannot affect the conclusion of the judgment, and thus, the allegation in the grounds of appeal on this issue cannot be accepted without further review.

3. Conclusion

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

Justices Park Poe-dae (Presiding Justice)