The legislative intent of Article 26-2(1) of the former Framework Act on National Taxes / In addition to the meaning of “Fraud or other unlawful act” under Article 26-2(1)1 of the former Framework Act on National Taxes, and the circumstances showing the intention of active concealment, such as non-declaration or underreporting of taxable objects and intentional omission of import or sale, etc. in books, whether the imposition and collection of taxes may be deemed impossible or considerably difficult (affirmative)

The legislative intent of Article 26-2(1) of the former Framework Act on National Taxes (amended by Act No. 10405, Dec. 27, 2010) is to extend the exclusion period for national tax imposition to 10 years, since it is difficult to expect the tax authority to exercise the right of imposition because it is difficult to find out that there is any unlawful act, such as making it difficult for him/her to detect the taxation requirement of national tax or making it difficult for him/her to find out any false fact, even though the exclusion period of national tax imposition is five years in principle for prompt determination of tax relations, it is difficult for him/her to expect the exercise of the right of imposition. Therefore, the term “Fraud and other unlawful act” in Article 26-2(1)1 of the former Framework Act refers to a deceptive scheme or other active act that makes it impossible or considerably difficult to impose national tax, without accompanying any other act, and it does not constitute simply failure to file a tax return under the tax law or making a false report, but it is considerably difficult to impose tax or other unlawful.

Article 26-2(1) of the former Framework Act on National Taxes (Amended by Act No. 10405, Dec. 27, 2010)

Supreme Court Decision 2013Du7667 Decided December 12, 2013 (Gong2014Sang, 196) Supreme Court Decision 2013Do13829 Decided February 21, 2014 (Gong2014Sang, 787)

Plaintiff (Attorney Lee Dong-soo et al., Counsel for the plaintiff-appellant)

Head of Jeju Tax Office

Gwangju High Court ( Jeju) Decision 2013Nu125 decided January 8, 2014

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

The grounds of appeal are examined.

1. Regarding ground of appeal No. 1

The legislative intent of Article 26-2(1) of the former Framework Act on National Taxes (amended by Act No. 10405, Dec. 27, 2010; hereinafter the same) is to extend the exclusion period of the imposition of national taxes to 10 years because it is difficult for the tax authority to find out that there is any unlawful act, such as making it difficult for him/her to detect the taxation requirements on the national taxes or forging any false fact, and thereby, it is difficult to expect the exercise of the imposition right. Therefore, the term “Fraud and other unlawful act” under Article 26-2(1)1 of the former Framework Act on National Taxes refers to a deceptive scheme or other unlawful act that makes it impossible or considerably difficult to impose and collect taxes, and it does not constitute merely failure to file a return under the tax law or filing a false report without accompanying any other act, but it is considerably difficult to impose taxes and 314, 201, 201.

The court below asserted that the plaintiff did not prepare separate books during the period of running a credit business from 2001 to 2008. However, the business operator engaged in the credit business has a duty to keep and record books in good faith pursuant to the Income Tax Act. The fact that the plaintiff did not prepare books in its own account even though he engaged in a long-term credit business is very exceptional in itself; ② the plaintiff was subject to tax investigation on the business income of the credit business from July 28, 2001 to September 2, 2000, but the tax official's request to submit books was consistent with the attitude that he did not prepare books at all at all; ③ the plaintiff did not submit all documents by asserting that he did not prepare books at the time of the tax investigation of this case, etc.; ③ the plaintiff did not have any duty to keep and record books at the time of the tax investigation of this case; and ④ the plaintiff's act of collecting and collecting receipts from the non-party's account holder or the non-party's act of submitting receipts and other related documents clearly unfavorable to the plaintiff's account holder.

Examining the reasoning of the judgment below in light of the aforementioned legal principles and records, the judgment of the court below is just and acceptable. Contrary to the allegations in the grounds of appeal, there were no errors by misapprehending the legal principles as to fraud and other unlawful acts under Article 26-2 (1) 1 of the former Framework Act

2. Regarding ground of appeal No. 2

In full view of the adopted evidence, the lower court recognized the Plaintiff’s interest income accrued from the obligor for each taxable year as stated in its reasoning, and calculated the income tax to be paid by the Plaintiff based on this.

Examining the reasoning of the judgment below in light of the records, the judgment below is just and acceptable. Contrary to the allegations in the grounds of appeal, the judgment below did not err by exceeding the bounds of the principle of free evaluation of evidence.

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 Ko Young-han (Presiding Justice)