[1] In a case where the Constitutional Court's decision of unconstitutionality on Article 32 (5) of the former Corporate Tax Act is made, whether the constructive income recognized by the disposition of income under Article 94-2 of the Enforcement Decree of the same Act can be included in the tax base of income

[2] The elements under which the tax authority may determine the tax base and tax amount by the method of a field investigation where a final return on the income tax was filed by attaching an adjusted account statement prepared

[3] In a case where a written confirmation submitted by a person liable for duty payment does not contain a specific content of a processed transaction, whether it constitutes a documentary evidence that can serve as a basis for a field investigation (negative)

[1] Article 32 (5) of the former Corporate Tax Act (amended by Act No. 4804 of Dec. 22, 1994) (amended by Act No. 4804 of Dec. 22, 1994) (amended by Act No. 4804 of Dec. 22, 1994), which is a decision of unconstitutionality, is wholly delegated to the Presidential Decree, which is a subordinate law, without presenting any criteria for determining the taxation requirements related to the disposition of income corresponding to the basic matters pertaining to the rights and obligations of the citizens. The Constitutional Court rendered a decision of unconstitutionality as it violates the constitutional provisions on the principle of no taxation without law and the limitation of delegated legislation. The Constitutional Court's decision of unconstitutionality as a result of Article 32 (5) of the Corporate Tax Act and Article 94-2 of the Enforcement Decree of the same Act (amended by Presidential Decree No. 1446 of Dec. 31, 194) established by delegation of the above provisions.

[2] In filing the final return on the tax base of income tax pursuant to Article 119 of the former Income Tax Act (amended by Act No. 4803 of Dec. 22, 1994) and Article 168 of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 14467 of Dec. 31, 1994), if a certified tax accountant or a certified public accountant files a return on the tax base return along with an adjusted account statement confirmed that the contents of the statement are legitimate, it may be corrected pursuant to Article 127 of the Act, if it is objectively evident that the tax office committed omission or error by the contents of the return itself even after the tax office determines the tax base and tax amount

[3] Generally, in correcting the contents of a taxpayer's duty return due to an error or omission, it is deemed that there is an error or omission in the contents of a tax return by other data whose authenticity and rationality are recognized, and if it is possible to conduct an on-site investigation, it may also be corrected by other data. Thus, if the confirmation document submitted by the taxpayer is a processing transaction and it does not contain the specific contents of a processing transaction, so it is not recognized that the value of evidence can not be easily denied, even if it is a taxpayer's certificate, it does not constitute other data substituting the books or documentary evidence that can be the basis of a on-site investigation.

[1] Article 32 (5) of the former Corporate Tax Act (amended by Act No. 4804 of Dec. 22, 1994); Article 94-2 of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 1446 of Dec. 31, 1994) / [2] Article 118 (see current Article 80 (3) of the former Income Tax Act (amended by Act No. 4803 of Dec. 22, 1994); Articles 119, 127 (see current Article 80 (4) of the former Income Tax Act); Article 168 (see current Article 131 of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 1467 of Dec. 31, 1994) / [3] Article 16 (1) of the Framework Act on National Taxes; Article 168 (1) of the former Income Tax Act (amended by Act No. 14830 of Dec. 28, 1948)

[1] Constitutional Court Order 93Hun-Ba32 delivered on November 30, 1995 (Hun-Ba196, 54), Constitutional Court Order 94Hun-Ba14 delivered on November 30, 1995 (Gong13193, 40) Supreme Court Decision 96Nu1627 delivered on April 26, 1996 (Gong196Sang, 1767), Supreme Court Decision 96Nu8796 delivered on May 16, 1997 (Gong1997Sang, 1997; 97Nu24989 delivered on October 24, 1997 (Gong1997; 196Nu97989 delivered on May 16, 197) 96Nu24979 delivered on September 26, 197 (Gong1997Ha, 3683)

Plaintiff

Head of Daegu Tax Office

Daegu High Court Decision 95Gu307 delivered on August 22, 1996

The judgment below is reversed. The case is remanded to the Daegu High Court.

The grounds of appeal are examined.

1. According to the reasoning of the judgment below, the findings of fact and the summary of the judgment of the court below are as follows.

A. The plaintiff operates the business of leasing apartment units or selling the leased apartment units in its trade name. The plaintiff is a person who serves as an executive of the non-party △△△△ corporation, the non-party ○○ Construction corporation, and is a person who can be determined by the written investigation method under Article 119(1) of the former Income Tax Act (amended by Presidential Decree No. 13802 of December 31, 1992, hereinafter referred to as the "Enforcement Decree") for the global income belonging to the year 191 and the year 192.

Accordingly, in order to receive the determination of the tax base and the amount of tax by written investigation, the Plaintiff filed a return on the final return on tax base along with the adjusted account statement, financial statements, etc. confirmed that the details of the entries are justifiable.

In the case of global income tax attributed to the plaintiff in 191, the defendant imposed the tax base and the amount of tax on the plaintiff by means of a written investigation by determining the tax base and the amount of tax according to the report. In the case of 1992, the defendant did not impose the tax yet.

On November 1, 1993, when the Plaintiff reported global income tax on November 1, 1991 and 1992, the Defendant omitted earned income and appropriated the necessary expenses to be deducted from the total income amount on other business income in excess of the necessary expenses to be deducted from the total income amount, and added the necessary expenses so excessive to the business income amount, and determined the tax base and tax amount after adding the omitted earned income to the earned income amount, and then imposed each taxation of this case.

B. After recognizing the above facts, the lower court determined that the rent reduction of apartment units based on the balance sheet and the balance sheet 191 for 197, 3,459,916,182 won (Evidence 7-3, 8-5, 200, 24,4081 won as of December 31, 1990, and the remaining amount of the rent-sale account is 24,710,40,4081 as of December 31, 1991, and the remaining amount of the rent-sale amount is 21,26,53,079 won as of December 31, 1991, and the difference is 3,444,87,02 won as of 197, and the rent-sale amount is 3,45,459,916,000 won as of 197,57,000 won as of 195,57,000 won as of the rent-sale amount is 195,525.

2. On the first ground for appeal

In light of the records, the above fact-finding by the court below is just and acceptable, and there is no violation of the rules of evidence as otherwise alleged in the ground of appeal.

However, Article 32 (5) of the former Corporate Tax Act (amended by Act No. 4804, Dec. 22, 1994; hereinafter the same) (amended by Act No. 4804, Dec. 22, 1994; hereinafter the same) (amended by Act No. 32) (amended by Act No. 4804, Dec. 31, 1995; hereinafter the same) declared that the Constitutional Court is unconstitutional because it comprehensively delegated the provisions of the Constitution on the principle of no taxation without law and the limitation of delegated legislation, and comprehensively delegated the provisions to the Presidential Decree, which are subordinate laws, without presenting any criteria. The Constitutional Court's above decision of unconstitutionality is based on Article 32 (5) of the Corporate Tax Act and Article 94-2 of the Enforcement Decree of the same Act (amended by Presidential Decree No. 14466, Dec. 31, 194; hereinafter the same). Thus, a disposition of income tax imposed on the amount treated as bonus under the above provisions becomes unlawful as it was based on the law (see Supreme Court Decision 97Nu. 196.

However, according to the records, since the Plaintiff’s omission in the global income tax return of 191 and the amount of 211,379,096 of earned income belonging to the year 192 and earned income belonging to the year 192 can be known to the Plaintiff, who had worked as an officer of the above non-party company, as the corporate tax investigation conducted around September 1993, the amount of 24,760,000 earned income and earned income belonging to the non-party company of 192, was recognized as having been disposed of in accordance with Article 94-2 of the Enforcement Decree of the Corporate Tax Act, the above decision of unconstitutionality cannot be included in the income tax base

Nevertheless, the judgment of the court below that the above amount was lawful by adding the tax base and tax amount to the Plaintiff’s business income, and the judgment of the court below was erroneous by misapprehending the Constitutional Court’s decision of unconstitutionality. Therefore, the portion of the ground of appeal that the portion of the labor income was not omitted

3. On the second ground for appeal

In filing the final return on the tax base of income tax, when a certified tax accountant or a certified public accountant files a return with an adjusted account statement confirmed as justifiable in accordance with Article 119 of the Act and Article 168 of the Enforcement Decree, if it is objectively evident that the details of the tax base and tax are committed by the details of the return themselves, even after the tax authority determines the tax base and tax amount by means of a written investigation and determination, it is established in the Supreme Court’s view that it may be corrected under Article 127 of the Act (see, e.g., Supreme Court Decisions 86Nu348, Mar. 24, 1987; 94Nu1200, Dec. 8, 199

However, as determined by the reasoning of the lower judgment, the income statement and the income statement of the apartment unit at the time of the instant final return on the tax base are as follows: KRW 5,857,206,307 in 191; KRW 6,303,474,75 in 192; and KRW 6,303,75 in 192; however, in the balance sheet and the balance sheet, the amount of rent apartment units at the cost of sale in lots can be counted as KRW 3,459,916,182 in 1991; KRW 4,58,13,65 in 192; KRW 99 in 196 in 198; KRW 98 in 196 in 19,00 in 196,00 in 196, the remainder of the apartment unit and the remaining amount of the decreased apartment unit are not included in the final return on the tax base for 1991.

In the same purport, the court below's decision that the defendant denied the initial written investigation decision or rejected the written investigation decision and lawful on-site investigation measures, and there is no error in the misapprehension of legal principles as to the permissible scope of the on-site investigation as otherwise alleged in the ground of appeal. The ground of appeal pointing this out is not acceptable.

4. On the third ground for appeal

Article 16(1) of the Framework Act on National Taxes provides that "where a person liable for tax payment keeps and enters a book under tax-related Acts, the investigation and determination of a tax base of the national tax concerned shall be based on the books kept and recorded and related documentary evidence." Article 118(1) of the Act provides that where a resident who keeps and enters the book can calculate his amount of income based on the books kept and recorded and evidential documents, the tax base and tax amount of the relevant year shall be investigated and determined based on the books kept and recorded. Thus, in general, in revising the details of a taxpayer's return due to an error or omission, it shall be based on the books or documentary evidence. However, if it is recognized that there is an error or omission in the details of the return due to other materials whose authenticity is recognized and reasonable, it may be corrected based on other materials (see Supreme Court Decision 94Nu149, Jun. 30, 1995).

In addition, if a tax authority has received a written confirmation from a taxpayer that a certain portion of a transaction is the processing transaction in the course of a tax investigation, it is difficult to readily deny the evidence of the written confirmation, barring any special circumstance, such as where the written confirmation was drafted compulsorily against the author's will or it is difficult to take it as supporting material for the specific fact due to lack of the content thereof, etc., and such evidence constitutes a substitute material for documentary evidence as provided in Article 118 (1) of the Act (see, e.g., Supreme Court Decisions 92Nu1438, Nov. 13, 1992; 98Du2928, May 22, 1998). However, if the written confirmation prepared by the taxpayer does not contain any specific content of the processed transaction and its credibility is acknowledged, it does not constitute another material substituting the books or documentary evidence that can be based on the on-site investigation even if it is a written confirmation of the taxpayer.

According to the reasoning of the judgment below and the records, the account books and documentary evidence for the sale price of this case were destroyed, and the plaintiff submitted a confirmation document (No. 3) indicating that the total amount of KRW 1,745,341,100 in the year 1991 is the necessary expense for processing, but the above confirmation document is merely a conclusion document that the difference is the necessary expense for processing, and there is no content as to the specific transaction in which the documentary evidence or processing expense is appropriated. Rather, some of the amounts indicated as the processing expense in the above confirmation document are included in the sale price of this case, which is contrary to the objective truth, so it is difficult to view that there is any lack of material to prove the contents of the above confirmation as being contrary to the objective truth.

Therefore, in this case, even if the tax authority denies a written investigation decision and can investigate the tax base and the amount thereof, it constitutes "where there is no necessary account books and documentary evidence in calculating the tax base or the total amount of revenue, or where the important part is incomplete or false in calculating the tax base or the total amount of revenue" under Article 120 of the Act and Article 169 (1) 1 of the Enforcement Decree, and thus, it is necessary to conduct an estimated

Nevertheless, the court below erred by misapprehending the legal principles as to the investigation method of necessary expenses, which held that the difference that the plaintiff is the person who is the plaintiff according to the confirmation was lawful as the necessary expenses for processing. The grounds for appeal pointing this out are with merit.

5. Therefore, the judgment of the court below shall be reversed, and the case shall be remanded to the court below for a new trial and determination. It is so decided as per Disposition with the assent of all participating Justices.

Justices Park Jong-chul (Presiding Justice)