Gakhal & Ors v Revenue and Customs (PROCEDURE : Other) [2016] UKFTT 356 (TC)
FTT-Tax
Gakhal & Ors v Revenue and Customs (PROCEDURE : Other)
[2016] UKFTT 356 (TC) · 2016-04-01
[13]It is the responsibility of the respondent to an application of this kind to place before the court, in the form of a witness statement, whatever evidence he thinks necessary to support his case. 59. In these circumstances we conclude that the Appellants’ proposed new ground does not have any real prospects of success. 60. That conclusion is determinative of this application. But, in case we are wrong on this point, we consider the other factors we have identified as being relevant. The reasons for the application and for any delay 61. The Appellants’ explanation for the delay in making their application was that throughout the appeal proceedings they had been hoping that they would be able to settle with the Respondents, and so had not wished to incur the additional costs of instructing legal advisors. Mr Grierson proffered the explanation that it was only some days before the hearing on 1 April 2016 that he had been instructed. 62. We do not consider that this is a good explanation for the Appellants’ delay in bringing forward the proposed new ground of appeal. The discovery assessments were raised in December 2009 and January 2010. The Appellants appealed to the Respondents in January and February 2010 and mentioned Subsection 29(2); more than six years passed before the Appellants again mentioned Subsection 29(2), this time in their Outline of Case served on 11 March 2016. It is not the case that the new ground proposed on 1 April 2016 arose out of external events or developments of which the Appellants could not have been aware prior to service of its Outline of Case. We agree with the Respondents that no good reason has been put forward as to why the Appellants could not have put forward their new ground at a much earlier date. It appears that the Appellants simply did not adequately engage with the litigation process until the impending hearing could no longer be ignored. 63. Furthermore, even at the stage when the new ground was re-identified, it seems that there was then little alacrity in making the application. The point was raised in the Appellants’ Outline of Case filed on 11 March 2016 (although at that stage it was put on the basis that there was no published guidance). At some point between 11 March and 1 April 2016 the Appellants took the time to instruct Mr Grierson but, despite prompting by the Respondents, they did not apply for permission to amend. Eventually the application was made during the course of the hearing on 1 April 2016. Having identified a potential new ground it was incumbent upon the Appellants to apply as soon as possible for permission to amend their grounds of appeal. There does not seem to be any explanation at all for this final three weeks of delay. The prejudice caused to each party 64. The Appellants submitted that they would suffer prejudice if they were unable to put their case as fully as they wished, whereas no prejudice would be caused to the Respondents if permission to amend was given as the Respondents had known of the points that they wished to make “for over a week”. As the application was not made until the course of the hearing on 1 April 2016, we do not agree that the Respondents were aware of the case to be made for over a week. When the Appellants’ skeleton argument was filed, on 23 March 2016, the Appellants case was that there was no published guidance. At best the Respondents had an inkling of the case to be made on 31 March 2016 when a copy of the particular Tax Bulletin mentioned in the proposed new ground was apparently emailed to the Respondents’ counsel. We also do not agree that giving a short period of notice to the Respondents results in them suffering no prejudice; in the absence of any specific application the Respondents have already been put to the trouble and expense of preparing to meet the full range of possible arguments which might be put by the Appellants. 65. We agree that the Appellants will not be able to present argument on the application of Subsection 29(2) TMA 1970 if we refuse permission to amend, and that being deprived of the opportunity to argue the point would result in the Appellants suffering some prejudice. The over-riding objective 66. We consider the over-riding objective to deal with matters fairly and justly when balancing our conclusions. As before we give particular consideration to the need to ensure, so far as practicable, that the parties are able to participate fully in the proceedings. The Appellants’ main submission in relation to the application for permission was that it should be granted in the interests of justice. 67. We have stated above our conclusion that the Appellants’ proposed amendment does not have any real prospects of success and that is determinative of the application. But even if we are wrong on that point, we would conclude that the balance in this case weighs against granting permission. We accept that if the Appellants are refused permission to appeal then they will be unable to present argument on the application of Subsection 29(2) and that this may lead them to consider that they are unable to fully participate in the proceedings. However, the only reason provided for the many years of delay in making the application appeared to be the Appellants’ failure to engage with the litigation until very shortly before what would have been the substantive hearing. In relation to the Appellants’ delay we bear in mind the comment in BPP Holdings that there is no justification for a more relaxed approach to compliance in the tribunals than in the higher courts. 68. Therefore on the basis that the proposed amendment has no prospects of success and on the basis of balancing the relevant factors for consideration, we conclude that the Appellants should be refused permission to amend their Statement of Case to include their second ground (relating to Section 29(2) TMA 1970) as set out in the application dated 1 April 2016. Whether the condition in Subsection 29(5) TMA 1970 has been satisfied 69. As we give the Respondents permission to amend their Statement of Case, we go on to consider the validity of the discovery assessments and in particular whether the condition in Subsection 29(5) has been satisfied and whether the discovery has become “stale”. 70. We heard submissions on this point at the hearing on 1 April 2016. The Respondents’ case was supported by a witness statement given by Ms Whittam, the officer who handled the enquiry into the Trust and Estate tax returns. Ms Whittam attended the hearing and gave evidence before us. We considered Ms Whittam to be a reliable and honest witness and we accept her evidence. Respondents’ submissions 71. In order to make the Respondents’ positive case in relation to the discovery assessments, Ms Lemos took us through Section 29 TMA 1970. The Respondents’ case was that the condition in Subsection 29(5) applied and that there had been a discovery of an insufficiency which enabled a discovery assessment to be raised under Subsection 29(1). Ms Lemos took us through Langham v Veltema [2004] EWCA Civ 193 , Household Estate Agents and HMRC v Charlton [2012] UKUT 770 (TCC) and submitted that the relevant test in relation to the making of a discovery was what a hypothetical officer could reasonably expect to be aware of in all the circumstances of the case. 72. Ms Lemos then took us through the correspondence in relation to the enquiry opened into the Trust and Estate return submitted by each FURBS. Ms Lemos referred to the evidence of Ms Whittam to submit that there was nothing in the Appellants’ tax returns to suggest the insufficiency of tax. 73. The Respondents also submitted, by reference to Section 34 TMA 1970, that the assessments were raised within time. In relation to the Appellants point on staleness, the Respondents argued that the comments in Charlton were obiter and there was no clarity around the circumstances in which a discovery might become stale. Ms Lemos submitted that the only relevant time limit was that set out in Section 34 TMA 1970. Appellants’ submissions 74. For the Appellants, Mr Grierson submitted that the Trust and Estate tax returns had been “flagged for enquiry” by the Respondents, as accepted by Ms Whittam, and as the settlements legislation was the most obvious legislation to apply to a settlement, it followed that the Respondents could have opened an enquiry into each of the Appellants’ returns within the enquiry period. 75. The Appellants submitted that there had been no discovery as the Respondents should have known the position. It was submitted that the Trust and Estate returns filed by each FURBS constituted information submitted to an officer of the Board under Subparagraph 29(6)(d)(ii). Mr Grierson submitted that there was no obligation for the officer to whom information was submitted under Subparagraph 29(6)(d)(ii) to be the same officer who raised the assessment. 76. Alternatively, the Appellants submitted that if there had been a discovery then, as the Respondents took no action for a year, their discovery had become stale by the time the assessments were raised. Although at one point Mr Grierson invited us to read the equitable principle of laches into Subsection 29(1) TMA 1970, our understanding is that the Appellants eventually relied solely upon the comments of the Upper Tribunal in Charlton for their submissions that any discovery that was made by the Respondents had become stale by the time the assessments were raised. Facts found 77. We set out below the facts we find in respect of the First Appellant on the basis of the documents before us and the oral evidence we heard. In relation to the Section 29 TMA 1970 issue, there was no relevant difference between the facts of the First Appellant’s case and those of the case for the Second and Third Appellants. 78. We find: a) The First Appellant filed a personal tax return for 2003/04 on 14 October 2004. No enquiry was opened into this return. b) The Trustees of the FURBS for the First Appellant filed a Trust and Estate return for 2003/04. This was date stamped as received by the Respondents on 6 October 2004. By letter dated 19 January 2006, the Respondents opened an enquiry into the FURBS’ return. The officer dealing with the enquiry was Ms Whittam. c) On 11 April 2006 the First Appellant’s agent responded to the Respondents’ initial requests for further information. The agent provided a copy of the relevant trust deed, and the Respondents were informed that the source of the dividends was Aeroplas Holdings Limited and that the FURBS had received independent advice before purchasing the “A” Shares. d) On 24 November 2006 the Respondents requested further information relating to the shares and asked who had settled the trust. On 2 January 2007 the First Appellant’s agent provided the share information but did not state who had settled the trust. e) On 2 March 2007 the Respondents wrote again to the First Appellant’s agent. More information was sought in relation to the acquisition of the shares, the independent advice given at the time, how the dividend receipts had been dealt with subsequently and whether there were any loans from the FURBS. The Respondents also sought a copy of the Scheme Rules. On 29 May 2007 the agent responded to the Respondents’ requests. More information and documentation was provided in relation to the shares, and it was clarified that no independent advice had been provided. Details were provided of two loans made by the FURBS. f) On 23 October 2007 the Respondents wrote again to the First Appellant’s agent, referring for the first time to the possibility that the settlements legislation could apply in respect of the dividend income received by the trustees. This possibility was a new conclusion reached by the Respondents. In this letter, the Respondents sought confirmation that the First Appellant agreed with their analysis. On 18 February 2008 the First Appellant’s agent replied to the Respondents stating the First Appellant’s view that the arrangements had been wholly commercial and so Section 660A ICTA 1988 did not apply to the income of the trust. g) On 1 April 2008 the Respondents sought more information about the rights attaching to the “A” shares, how the value for the shares had been arrived at and the amended memorandum and articles of association of Aeroplas Holdings Limited. By letter dated 27 May 2008, the First Appellant’s agent provided the Respondents with the memorandum and articles of association. The letter also stated there had been no formal valuation of the “A” shares and provided an explanation of how the value of the shares had been arrived at. h) On 21 August 2008 the Respondents acknowledged the First Appellant’s response and stated that the matter was still under review. This position was repeated in letters dated 28 October 2008 and 29 July 2009. i) On 19 August 2009 the Respondents requested the minutes of the meeting where the directors of Aeroplas Holdings Limited had agreed to pay dividends on the “A” shares. Under cover of a letter dated 7 October 2009, the First Appellant’s agent provided the company minutes sought. j) On 29 October 2009 the Respondents wrote again, stating their view that the directors’ decision to vote dividends on the “A” shares was the indirect settling of income on the FURBS, and that this was taxable on the settlor as part of his personal income. The Respondents invited the First Appellant to agree this analysis. k) On 22 December 2009 the Respondents protectively raised discovery assessments on the First and Second Appellants. A discovery assessment was raised on the Third Appellant on 21 January 2010. Decision on validity of the discovery assessments raised 79. Our understanding of Burgess is that in the absence of a concession as to the validity of a discovery assessment, the Respondents must positively make the case that the assessment was validly raised. We discuss first whether the requirements in Section 29 are met, and then go on to consider together whether the requirements in Section 34 are met in and whether the discovery has become stale. Requirements in Section 29 80. As can be seen from the wording of Section 29 TMA 1970 (set out in the annex) there are a number of conditions which must be satisfied before an assessment can be raised. The first of these is that an officer of the Board discovers an insufficiency of tax. We will go on to consider what is mean by the discovery of an insufficiency of tax but it is relevant at this stage to set out the contents of the First Appellant’s tax return for 2003/04 and to consider the information which was available. 81. The majority of the First Appellant’s return is blank. The only entry relevant to this dispute is that in the employment pages the First Appellant states in the additional information box: FURB PAID OF £10000 NIL TAX What information was made available to the officer? 82. Subsection 29(6) sets out the information which is made available to an officer of the Board. We are concerned with the information which is available at the date when an officer ceased to be entitled to give notice of his intention to enquire into the Appellants’ personal tax returns. The evidence before us (in the form of notes on the bottom of the Respondents’ copy of the First Appellant’s tax return) indicates that the return was submitted to the Respondents on 14 October 2004. Section 9A TMA 1970 (as it applied in 2005/06) provides that the last date on which an enquiry into a return could be opened was up to one year after the deadline for filing that return. Therefore the relevant date, at which it was no longer possible to open an enquiry into the First Appellant’s return, was 1 February 2006. 83. As at 1 February 2006, an officer of the Board had available to him all the information contained in the First Appellant’s tax return. There were no documents accompanying the return. There was no claim for 2003/04 by the First Appellant acting in his personal capacity and, as there was no enquiry, there were no documents provided to an officer for the purpose of an enquiry. 84. The Appellants submitted that the contents of the Trust and Estate return for each FURBS should be considered as being information which is notified in writing by the taxpayer to an officer of the Board, within the meaning of Subparagraph 29(6)(d)(ii). The Trust and Estate return for the First Appellant’s FURBS is date stamped as received by the Respondents on 6 October 2004 so was available to an officer before 1 February 2006. However, information is only within 29(6)(d)(ii) if the existence of the information and the relevance of the information to the First Appellant’s insufficiency of tax are notified in writing. Therefore we need to consider the contents of the Trust and Estate return in order to consider what was available. 85. The only relevant entry in the Trust and Estate return relates to dividends and other qualifying distributions from UK companies, in respect of which the FURBS declares dividends of £525,000. There was no written notification that the information in the Trust and Estate return was relevant to an insufficiency of tax of the First Appellant. On that basis we conclude that the information in the Trust and Estate Return of the First Appellant’s FURBS was not information made available within the meaning of Subparagraph 29(6)(d)(ii). 86. Therefore we conclude that the only information made available at the time an officer ceased to be entitled to open an enquiry was the information contained in the First Appellant’s return. Could the officer have been reasonably expected to be aware of the insufficiency? 87. If the officer could not have reasonably been expected to be aware, on the basis of the information contained in the First Appellant’s return, of the insufficiency of tax then the condition in Subsection 29(5) is satisfied. The test in Subsection 29(5) is an objective test and so we consider the awareness of a hypothetical officer. 88. Ms Whittam gave evidence that she considered there was nothing in the tax returns of any of the Appellants which would have alerted an officer to conclude that there was an insufficiency. We accept that this evidence was given with the aim of assisting the Tribunal but we bear in mind that Ms Whittam is not an expert witness and that the awareness of officers actually involved in the case is not relevant here. 89. The hypothetical officer should have the level of knowledge and skill which would reasonably be expected of an officer in the circumstances of the case. Here all the information available was contained within the First Appellant’s return. There were no indicators, such as a DOTAS number, to suggest that the return was in any way out of the ordinary. Therefore we consider that the hypothetical officer should not be imbued with any particular specialist knowledge or expertise. 90. On the basis of the information contained in the First Appellant’s tax return, we conclude that the hypothetical officer could not reasonably have been expected to be aware of the insufficiency of tax. 91. Mr Grierson suggested that it would have been possible for an enquiry to have been opened into the Appellants’ returns. This submission appeared to be based upon Ms Whittam’s acceptance, under cross examination, that the large dividend shown in the Trust and Estate return for 2003/04 had identified that return as one into which an enquiry should be opened. Ms Whittam’s evidence was that the large amount had alerted HMRC to the possibility that a particular avoidance scheme might be being used, and it was on this basis that an enquiry into the Trust and Estate return was in due course opened. 92. We have already concluded that the information in the Trust and Estate return was not information made available to the officer. But, even if we were wrong to reach that conclusion, the test is of what the hypothetical officer could reasonably be aware, and not what the hypothetical officer could reasonably do. That is clear from paragraph 33 of the judgment of Lord Justice Auld in Langham v Veltema : More particularly, it is plain from the wording of the statutory test in section 29(5) that it is concerned, not with what an Inspector could reasonably have been expected to do, but with what he could have been reasonably expected to be aware of. It speaks of an Inspector’s objective awareness, from the information made available to him by the taxpayer, of “the situation” mentioned in section 29(1), namely an actual insufficiency in the assessment, not an objective awareness that he should do something to check whether there is such an insufficiency, as suggested by Park J. 93. Therefore, even if the hypothetical officer had available to him the information in the Trust and Estate return and the information in the First Appellant’s return, we do not consider that the hypothetical officer could reasonably have been expected to have been aware of the First Appellant’s insufficiency of tax. 94. We conclude that the condition in Subsection 29(5) is satisfied. Was there a discovery? 95. In her submissions Ms Lemos took us through the correspondence which arose out of the enquiry into the Trust and Estate return. The enquiry was opened on 19 January 2006 and correspondence continued until the discovery assessments were raised in December 2009/January 2010. It is clear that considerably more information came into the Respondents possession at various stages as a result of that correspondence. The Respondents submitted that the new information and their new conclusions as to the taxable position led them to discover an insufficiency of tax. Ms Lemos relied upon, in particular, the letter of 23 October 2007 which she described as “the first discovery”. 96. It is clear that no new information is required for there to be a discovery. In paragraph 37 of Charlton the Upper Tribunal held as follows in relation to what constituted a discovery: In our judgment, no new information, of fact or law, is required for there to be a discovery. All that is required is that it has newly appeared to an officer, acting honestly and reasonably, that there is an insufficiency in an assessment. That can be for any reason, including a change of view, change of opinion, or correction of an oversight. The requirement for newness does not relate to the reason for the conclusion reached by the officer, but to the conclusion itself. 97. Here we are satisfied that there was both new information and at least one new conclusion that there was income of the Appellants which should have been assessed to tax. We consider that the Respondents’ freshly arrived at conclusion (set out in their letter of 23 October 2007) that the settlements legislation was applicable would constitute a discovery of an insufficiency for the purposes of Subsection 29(1). We consider the Respondents’ better understanding of the facts as a result of receiving relevant company minutes (sent under cover of the agent’s letter of 7 October 2009) would also constitute a discovery for Subsection 29(1). We conclude that the condition in Subsection 29(1) is met. 98. We should note that Mr Grierson had sought to persuade us that there could be no discovery as, once the Respondents had received the Trust and Estate returns, they should have had in mind the settlements legislation. So, he submitted, although the Trust and Estate return did not specify the settlor, the Respondents should have been put on enquiry as to the settlor’s identity in order that (once they had identified the settlor) they could have opened an enquiry into the Appellants’ returns. Mr Grierson submitted that any other interpretation made it too easy for the Respondents to state that they did not know the position. We reject this construction in its entirety. There is no statutory basis for the suggestion that, because an officer did not seek information when an enquiry into the Appellants’ returns could have been opened, there can be no discovery of an insufficiency of tax at a later date. Such a construction would require the reading in of an additional restriction and/or time limit which are simply not present in the wording of Section 29. The time issue 99. The time limit for raising an assessment is set out in Section 34 TMA 1970, the text of which for the year in which the assessment was raised is set out in the annex to this decision. 100. The year of assessment to which the discovery assessments relate is 2003/04. We have found that two of the discovery assessments were raised on 22 December 2009 and the third was raised on 21 January 2010. Therefore we are satisfied that each of the discovery assessments was raised at a time not later than five years after the 31st January following the end of the year of assessment. Therefore we conclude that the assessments were raised upon the Appellants within time. Staleness 101. The Appellants argue that as there was a period of over a year with no requests for further information by the Respondents then any discovery the officer may have made has become stale, and so cannot be relied upon as the basis for raising a discovery assessment. The passage upon which the Appellants rely in making their submission that the discovery was stale is set out in the latter half of paragraph 37 of the Upper Tribunal’s decision in Charlton : If an officer has concluded that a discovery assessment should be issued, but for some reason the assessment is not made within a reasonable period after that conclusion is reached, it might, depending on the circumstances, be the case that the conclusion would lose its essential newness by the time of the actual assessment. But that would not, in our view, include a case, such as this, where the delay was merely to accommodate the final determination of another appeal which was material to the liability question. Such a delay did not deprive Mr Cree’s conclusions of their essential newness for s 29(1) purposes. 102. While there was an apparent period of inactivity on the part of the Respondents between 27 May 2008 and 19 August 2009, we have found that the Respondents made a further request for material on 19 August 2009. Relevant company minutes were provided by the Appellants’ agent on 7 October 2009. The discovery assessments were raised on 22 December 2009 and 21 January 2010, i.e. two and a half months, and three and half months, following the provision of those company minutes. We do not regard such relatively short periods as being sufficient to rob the resulting conclusion of its essential newness. Therefore we conclude that the point raised by the Appellant is hypothetical. 103. However, if we are wrong to reach that conclusion so that no discovery was made by an officer after 27 May 2008, we would agree with the Respondents that the passage in Charlton is obiter and so not binding upon us. We have carefully considered Section 29 TMA 1970 but we can find no justification in the wording of that section for holding that the assessment must be raised within a certain period of making the discovery as well as meeting the requirements of Section 34 TMA 1970. In our opinion the only statutory constraint relating to time is that the assessment must be raised within the time prescribed by Section 34. We conclude that the concept of a discovery becoming stale has no relevance insofar as lack of staleness is proposed as an additional condition which must be met in order to raise a discovery assessment. Summary of conclusions in relation to the discovery assessments 104. We are satisfied that all the conditions required for the Respondents to raise the discovery assessments have been met and that the discovery assessments were validly raised. Case management 105. We now consider the appropriate case management for the hearing of the substantive dispute between the parties. As noted above, the Directions of 24 March 2016 did not anticipate that the Appellants would seek permission to raise three new grounds of appeal in relation to the substantive issues. We now deal with that aspect of the Appellants’ application as part of the case management. 106. The proposed new grounds are as follows: 3. The dividends were capital dividends which cannot be taxed as income of a settlor under sections 660A and 660G(3) of ICTA 1988 4. The Appellants were not settlors within section 660G(1), (2) of ICTA 1988 and HMRC is making an invalid attempt to lift the corporate veil in alleging that the Appellants were settlors 5. The dividends were not sums “paid by an employer” within section 386(1) of ITEPA 2003 because they were declared by the parent company Aeroplas Holdings Ltd rather than by the employer company Aeroplas (U.K.) Ltd. 107. This application was also unsupported by evidence. Ground 3 108. The Respondents’ submission in relation to Ground 3 was that as the application was unsupported it was not possible for the Respondents to state whether or not they objected. Ms Lemos submitted that it would be appropriate for the Appellants to seek permission to adduce evidence in support so that the Respondents could consider their position. That would result in Directions for the Appellants to file evidence in support and for the Respondents to be given the opportunity to file evidence in response if so advised and in any event to make submissions on the application. The Appellants were willing to proceed along the lines suggested by the Respondents. 109. We have considered whether we should decide the potentially opposed application in relation to Ground 3 now, in the interests of unnecessarily prolonging this appeal and with a view to the appropriate allocation of scant Tribunal resources. As the new hearing date for the substantive hearing has not yet been fixed, we eventually decided that we will accede to what ultimately became in essence a joint application for Directions. However, if the Respondents do oppose the Appellants’ application in respect of Ground 3 (once it is supported with evidence), we direct that both parties’ submissions on the application be referred back to Judge Bailey (given her familiarity with the papers) and will be decided on paper. Grounds 4 and 5 110. The Respondents did not object to permission to amend being granted in respect of Grounds 4 and 5. 111. Although the application is unsupported and we cannot consider its prospects of success, and it is made late with no apparent reason for the delay, as the substantive hearing date has yet to be re-listed and as the Respondents do not object, we grant the Appellants permission to amend their grounds of appeal to include Grounds 4 and 5. Conclusion 112. In summary, we conclude: a) The Respondents are granted permission to amend their Statement of Case for each Appellant as set out in their application dated 15 March 2016; b) We are satisfied that each of the discovery assessments raised upon the Appellants was validly raised in accordance with the requirements set out in Sections 29 and 34 TMA 1970; c) The Appellants are refused permission to amend their Grounds of Appeal to include submissions on the application of Subsection 29(2) TMA 1970; and d) The Appellants are granted permission to amend their Grounds of Appeal to include Grounds 4 and 5 as set out in their application dated 1 April 2016. 113. We have issued Directions for the future case management of this appeal, including the management of the outstanding part of the Appellants’ supported application to amend, the production of witness evidence and for the relisting of this appeal with a revised time estimate. If the parties are dissatisfied with those Directions they may apply at any time for those Directions to be amended, revised or superseded. 114. This document contains full findings of fact and reasons for the preliminary decision. Any party dissatisfied with this preliminary decision has a right to apply for permission to appeal against it pursuant to Rule 39 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009. The application must be received by this Tribunal not later than 56 days after this decision is sent to that party. The parties are referred to “Guidance to accompany a Decision from the First-tier Tribunal (Tax Chamber)” which accompanies and forms part of this decision notice. JANE BAILEY TRIBUNAL JUDGE RELEASE DATE: 19 APRIL 2016 Annex setting out relevant legislation as it applied in 2009/10 29 Assessment where loss of tax discovered(1) If an officer of the Board or the Board discover, as regards any person (the taxpayer) and a year of assessment- (a) that any income which ought to have been assessed to income tax, or chargeable gains which ought to have been assessed to capital gains tax, have not been assessed, or (b) that an assessment to tax is or has become insufficient, or (c) that any relief which has been given is or has become excessive, the officer or, as the case may be, the Board may, subject to subsections (2) and (3) below, make an assessment in the amount, or the further amount, which ought in his or their opinion to be charged in order to make good to the Crown the loss of tax.(2) Where- (a) the taxpayer has made and delivered a return under section 8 or 8A of this Act in respect of the relevant year of assessment, and (b) the situation mentioned in subsection (1) above is attributable to an error or mistake in the return as to the basis on which his liability ought to have been computed, the taxpayer shall not be assessed under that subsection in respect of the year of assessment there mentioned if the return was in fact made on the basis or in accordance with the practice generally prevailing at the time when it was made.(3) Where the taxpayer has made and delivered a return under section 8 or 8A of this Act in respect of the relevant year of assessment, he shall not be assessed under subsection (1) above- (a) in respect of the year of assessment mentioned in that subsection; and (b) in the same capacity as that in which he made and delivered the return, unless one of the two conditions mentioned below is fulfilled.(4) …(5) The second condition is that at the time when an officer of the Board- (a) ceased to be entitled to give notice of his intention to enquire into the taxpayer’s return under section 8 or 8A of this Act in respect of the relevant year of assessment; or (b) informed the taxpayer that he had completed his enquiries into that return, the officer could not have been reasonably expected, on the basis of the information made available to him before that time, to be aware of the situation mentioned in subsection (1) above.(6) For the purposes of subsection (5) above, information is made available to an officer of the Board if- (a) it is contained in the taxpayer’s return under section 8 or 8A of this Act in respect of the relevant year of assessment (the return), or in any accounts, statements or documents accompanying the return; (b) it is contained in any claim made as regards the relevant year of assessment by the taxpayer acting in the same capacity as that in which he made the return, or in any accounts, statements or documents accompanying any such claim; (c) it is contained in any documents, accounts or particulars which, for the purposes of any enquiries into the return or any such claim by an officer of the Board, are produced or furnished by the taxpayer to the officer; or (d) it is information the existence of which, and the relevance of which as regards the situation mentioned in subsection (1) above- (i) could reasonably be expected to be inferred by an officer of the Board from information falling within paragraphs (a) to (c) above; or (ii) are notified in writing by the taxpayer to an officer of the Board. 34 Ordinary time limit of six years (1) Subject to the following provisions of this Act, and to any other provisions of the Taxes Acts allowing a longer period in any particular class of case, an assessment to income tax or capital gains tax may be made at any time not later than five years after the 31st January next following the year of assessment to which it relates. (2) An objection to the making of any assessment on the ground that the time limit for making it has expired shall only be made an appeal against the assessment.